Global Political Investing Musings

Two fairly gruesome real world scenarios occurred recently to me as situations where the financial markets may be misaligned.

It seems to me that the investing world has, from the start, been consistently underestimating the negative impact of the European sovereign issues on the global markets. Things flare up into crisis mode and then are relatively peaceful for weeks and months, while the same risk issues continue to loom silently, churning right below the placid surface. Norway is a prosperous Euro Zone country with a huge current account surplus, a stable political scene and a separate currency. Given my anticipation that we're just another series of months away from the next European "crisis", it seems to me that being prepared with a strategy that is long Norwegian Krone and short Eurozone would be a positive one.

Along the same lines, the political world has consistently underestimated Iran's capacity to develop its nuclear ambitions. The one thing I took from the Wikileaks file was how much of the alleged "sensitive" information was already in the public domain and reported on. And its been a consistent pattern in the media that the US is perpetually "caught off guard" by how fast Iran has been able to advance from a nuclear perspective. While this is not comforting from political perspective, it would seem to possibly present a second investing opportunity. Given the historical animosity between Israel and Iran, it would seem that a black swam political event concerning Iran's nuclear program would have a material negative impact on the Israeli market and I'm curious as to whether the market, compared to how the political world seemingly has not, presently has adequately priced for this possibility.