David A. Andelman: A New Year, A Fresh Start?

Davis Andelman, EditorThe first Monday of the new year began in Baghdad with a unique debut: the ribbon-cutting for the world’s largest and most opulent American Embassy, and at the very moment the administration that made it most necessary (and least affordable) is headed for the exits.

We are indeed, as the Chinese proverb so aptly notes, living in interesting times. Some of Wall Street’s wisest prognosticators (if that is not an oxymoron in itself) are predicting a market surge this year that could rival that of 2000 when the Internet bubble was in full flight and companies with nothing but bottled air for products commanded stratospheric prices on the wings of inflated expectations.

Over the past year, our expectations have fallen to a new low, or at least our confidence. So does this signal a rock bottom of despair? Perhaps. How indeed could things get much worse than today?

There is always something worse. War in Gaza could expand to include southern Lebanon and Hezbollah, drawing Iran into the equation. Markets could resume their slide even in the face of mega-wealth pouring in from every leading central bank around the globe. The diplomatic packet on Monday from India to Pakistan detailing Islamabad’s role in last year’s Mumbai terror attacks could simply be a prelude to armed conflict along that always tense frontier. China could decide to stop funding the excesses of the American consumer, sending the dollar into a fatal tailspin. Oh, and then there’s oil: as desperate a case at $40 a barrel as $140.