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In recent years, on Fridays often viewed as a good moment to work from home by financiers. Not now.
As spread about the news Israeli airstrikes About Iran, Wall Street and Traders in London – not to celebrate Asia – returned to their offices to prepare for an inevitable storm.
Froze quickly appeared: Oil prices (initially 13 percent), stock prices (first 1 percent in the United States) and returned the last low slide. Although these actions are later partially deleted, the variability is likely to be high; Especially since US President Donald Trump He warned without an agreement The next “planned attacks” will be “even more cruel” Israel.
So what do investors think? There is good (work) and bad news. Rotates around the issue of old oil. At first glance, it seems reasonable to assume that higher oil prices will be a nasty blow to global growth.
Iran’s “only” produces about 1.7 mn barrels – globally only 2 percent – is a real threat If the additional conflict is tying in the Strait of Hormuz Will be Shipping blow. Indeed, Ing barings are waiting This is an extreme, bad scenario – that is, a long clogging of the throat – oil prices can record a record of $ 150 at the end of this year.
The history of the twentieth century showed how much oil prices would be. And with the World Bank just cut the outlook For global growth, almost half a percentage is the lowest for 2.3 percent – a bad moment for another shock since 2008.
Trump claimed that the strikes would eventually be “The biggest thing for the market“Sliding is a short-term stress. High oil prices will shake the Trump’s team’s commander-in-inflation plan.
But here is the least little depressed issue here or at least one of the most remembered, but not the so-called “oil intensity” of the global economy, ie the need for fuel for fuel with each unit of each growth.
In 1975, for example, Counts the World Bank This was necessary to produce 0.12 tons of oil equivalent “(foot) $ 1,000. Until 2022, it is only 0.05, only 0.05, like the sun, sun and growing industrial efficiency.
So we do not face your grandfather – or your father – your economy to ask the label line. Shocks like Israeli attack should not be destructive as before; or if the main transmission of this shock is the channel fat.
But the bad news is that oil is oil no Currently single transmission channel; Instead, I suspect that the most important channel is the investor’s psychology.
Because Israel blows, only geopolitical instability is the strengthening of the perception we will not only raise geopolitical instability Zeitgeist Shift too. He looks like a bad race for hegemon strength displacement Even the figs of international cooperation and the laws of the law.
Or re-trump events are managed by the World’s Feelings of Law, but because of whose question “Cards” of power (or no); Israel feels free to bomb Iran, regardless of any UN norms.
That is, if this is not terrible – the investors have grown to predict the future with neat economic models. After all, in the neoliberal era, these models were usually excluded in a mixed policy and assumed that the legal rule is consistent in the internal and international area. “Traditional World Order – Economic Policy – became the head like Pimco” reported to customers This week: “Politics (economic economy).”
So what do investors do? An important step, although old economic models are often useful, now they are dangerous incomplete.
It is a second more financial history, sociology and psychology. Personally, I can find the articles of today’s events in the articulists of the articles of today’s events in today’s events Albert Hirschman and Carl Schmidt or Charles Kindleberger. Anthropologists also help David Graeber, Arjun Appadurai and James Scott.
Third, we must accept the importance of trade and security unions to re-delete the source of a strong volatility, “to diversify the portfolios, and the events are important to breathe a long appearance and deep breath.
The bottom line, then if you work in finance, do not plan many Friday this summer. This is not only due to the increase in the middle eastern tense; Cheap debt, currency dislocation, trade and US president decided to restrict global order – all present risks. Variability is not a mistake now, not a mistake.
