Opening Position
May 2010
Spring is the season typically associated with renewal, a time to refresh and reenergize. Alas, the spring of 2011 hasn’t felt that way. We have had political unrest in Middle Eastern countries including Tunisia, Bahrain, Egypt, Yemen, escalating to the crisis in Libya, which has given rise to international involvement. There was the 9.0 magnitude earthquake and tsunami in Japan that devastated the northeastern portion of the island of Honshu and triggered a nuclear crisis.
We have been faced with a year of crises. If you think about it, in addition to the recent crises in the Middle East and Japan, about a year after the BP oil spill in the US Gulf Coast, we have seen quite a number of global events such as floods in Australia, earthquakes in New Zealand, and currently, coups in North Africa. With all these events taking place within the past year, the arrival of spring has been rather bleak.
What happened in Japan shows us the power of nature and the weakness of mankind, no matter how powerful we believe we are. Earthquakes in Japan, and California, for that matter, are common, given their proximity to fault lines. Japan has prepared itself for earthquakes, but no matter how prepared you are, nature has the power of throwing something at you so powerful it is beyond expectation. It’s that unexpected variable that will knock us akilter. We live in a world of unknowns, and from time to time we are reminded in a most jarring way that these unknowns exist. Yet we never expect them.
When the world is confronted with such crisis, I prefer not to be actively involved in the markets. I would rather not be in a position where I would be taking advantage of the rising price of oil and gold, or wide currency fluctuations. But I didn’t see any major moves that indicated that the markets were going to take any major hits. There were the usual expected short-term reactions, but the markets seemed to return to normal quickly. Could it be that there are others who, like me, also would rather not be involved in the markets during such times? That’s a comforting thought, and I will stick with that for now.
I am confident that the people of Japan will recover from the tragedy and rebuild and regain their strength. Although the beginning of spring may not appear to be a time of renewal right now, there may be something unexpected that will give rise to a brighter future.
Jayanthi Gopalakrishnan, Editor