Wow, what a disaster in the markets today! After a few days of lower oil prices — causing many “experts” to run around claiming that oil is in a bubble and is going to crash to $75 — oil is up over $16 in 2 days, including around $11 today alone. It was also up in after-hours trading, so we’ll see what happens when the markets open again on Monday. The turbulence and volatility in the stock market is just gut wrenching, and I’m sure glad I don’t have a lot of money in the markets. The U.S. unemployment rate jumped more than it has in over 22 years, and the Dow Jones dropped almost 400 points – more than 3% – in a single day. As I’ve said before, the worst is NOT over. This is just a sign of the times, and I think we’re going to continue to see this kind of crazy volatility for some time to come. What’s scary is that even though the economy in the U.S. is in a terrible state, rising commodity prices are causing serious inflation concerns. So to quell those, the Federal Reserve has to increase interest rates, but if it does that, it causes even more slowdown. They’re truly in a no-win situation right now. My take on it is that they’re going to take the side of the economy, and risk higher inflation by holding rates steady, or possibly dropping them once or twice more this year. That’s going to extend the downturn in the U.S., but during an election year, the government doesn’t want to start cranking interest rates up when people are already have a tough time. Canada will continue to be one of the main beneficiaries of the driving commodity prices. Natural gas is now over $12, when it was in the low $7s only 6 months ago. Drilling activity has skyrocketed, and with the recent surges in oil prices (which I think will continue, through a lot of volatiiity), I expect Alberta is going to see some surging economic activity next year. I don’t think we’re going to see turnaround and a bottom to the mess until early in 2009, including most of the U.S. housing market. And as that time comes, we’ll be continuing to position ourselves to take maximum advantage of the bottom coming and going. Viva Las Vegas! (in 2009!)]]>