Yesterday I mentioned that my wife speculated that the market downturn may be related to foreign investors taking their money to greener pastures. Turns out that she was may have been right, at least according to Paul Krugman:
The story has played itself out time and time again over the past 30 years. Global investors, disappointed with the returns they’re getting, search for alternatives. They think they’ve found what they’re looking for in some country or other, and money rushes in.
But eventually it becomes clear that the investment opportunity wasn’t all it seemed to be, and the money rushes out again, with nasty consequences for the former financial favorite. That’s the story of multiple financial crises in Latin America and Asia. And it’s also the story of the U.S. combined housing and credit bubble. These days, we’re playing the role usually assigned to third-world economies.
Meanwhile, George Bush nipped a Wall Street rally in the bud today. After he announced his “economic plan” the market went down nearly 300 points.
Post a Comment