Woopie the stock market stayed flat!
We were all distracted by Google mania today and hardly noticed it but oil rose to record levels, the dollar dropped to record levels and gold broke $760, tested $774 and settled at $768.
We are now officially partying like it’s early January, 2000 (the market collapsed on Jan 18th) or, in the very least, December 1999 when we were all riding a wave of rising PC sales and tech services based on the terror alert of the day – that the clocks would roll the date to 2000 and destroy the modern civilization! There was a lot of business and a lot of jobs created by that nonsense (my wife was a full-time "Y2K consultant" for American Express) and, as with the current bogus oil crisis, people were paying record prices for things (new PC’s, programmers, consultants, backups, contingency planners, extra staff to handle potential "trouble") they didn’t really need based on fear and panic and, once it all amounted to nothing, the tech bubble deflated at a very rapid rate.
Back in 1999 it was a programming shortage that drove the market. That runaway commodity drove the price of progammers (like oil producers) up 300% and the ancillary support services like consulting (OIH) also went through the roof and there was so much money being thrown around that the equipment makers (DELL, CSCO, HP) were cashing in, even though these were all the same people who caused the "crisis" in the first place by failing to realize the century was going to roll over until just before it was going to end – very much like the oil guys who haven’t built a refinery in the past decade and have put all of their money into stock buybacks rather than exploration or (heaven forbid) alternative energy research.
So, like oil, while there were some legitimate issues to be addressed, the mania that surrounded the event, the shameless profiteering by Anderson Consulting et al who would do "studies" that often led to bigger studies and often required time and effort that would suck a company dry as bosses were forced to pay up to maintain a vital resource (their network systems) that they didn’t fully understand was VERY overdone.
Today’s oil issue was the attempted assassination of Benazir Bhutto the former and possibly next Prime Minister of Pakistan, who returned to the country after 8 years of exile. It used to be if you tried to assassinate a political leader and you missed, perhaps you hit a single secret service agent or a bystander but times have changed and now the weapon of choice is an exploding car. This one missed Ms. Bhutto but did manage to kill 126 bystanders, injuring 248 others.
Oil flew up over $90 in overnight trading and this will be a game changer tomorrow as earnings are revealing we are past the breaking point where we can pretend the price of oil isn’t going to matter. It’s almost a full decade after 1999 and I’m still paying $100 an hour for a programmer – that does not bode well for the price of oil as, once you get used to paying up for a commodity, it’s very hard to get the price back down!
So a declining dollar, renewed terror fears, instability in the Middle East – it’s the same old thing as yesterday but maybe tomorrow it will start to matter.
