Meltdown in 2006? Or The Great Doom and Gloom Letdown of 200

MarketWatch columnist Paul Farrell has a post entitled "Meltdown in 2006? Cast your vote! The 'survivability of mankind' is at stake: are you ready?", which lists a host of possible "triggers" for a "meltdown" in 2006. Here is my response that I emailed to him:

I read your list of "triggers" carefully, and honestly, *none* of them is likely to trigger a full recession in 2006 or 2007 (my condolences to George Soros for his misguided forecast).

Although I don't think a recession or meltdown is likely, here's one trigger that *could* cause at least a hiccup: the neocon administration puts enough pressure on Iran over their alleged "nuclear ambitions" that Iran retaliates by instituting a "pause" in their oil exports, say for three months or six months or nine months for the nominal purpose of revamping oil production equipment or pipeline and port facilities, causing significant turmoil in the speculative crude oil futures market (remember the Goldman Sachs $105 "superspike"?) and enough of a disruption in world oil flows, AND the tone-deaf neocons lecture the markets that pursuing freedom and suppressing Iran's efforts to obtain nuclear weapons and their support of terrorists are far more important to "the cause of freedom" than some
short-term economic disruption, causing a major economic distraction, that may or may not lead to a market crash or recession.

Note: although any military hostilities might initially have a negative impact, as soon as the U.S. is actually "kicking butt" (or actually, as soon as the U.S. *signals* that it will be "kicking butt"), the market will rally strongly.

Other than that, there is simply no threat on the horizon (2006, 2007) that would give you your much-desired meltdown. Come 2007, you'll have to apologize to your readers for "The Great Doom and Gloom Letdown of 2006".

-- Jack Krupansky

So, that's my forecast for 2006 and 2007: The Doom and Gloom crowd willl not get a Meltdown, but instead get a massive Letdown.

-- Jack Krupansky