CNBC spoke with Citi’s chief economist Willem Buiter yesterday on the state of global crises.
- 0:40 For the market’s reaction to be justified, Japan and Libya would need to experience their worst case scenarios.
- 1:10 “Markets move straight from euphoria to fear and this is clearly a fear induced reaction.”
- 1:40 Bahrain doesn’t produce any oil; it is only interesting geo-politically. Unless Saudi, Kuwait, or Iran is impacted by Bahrain, it is insignificant.
- 2:15 “Legitimacy is being tested everywhere in the Middle East and North Africa. There’s no way to foresee how this plays out. But no matter how this plays out, whoever rules will want to pump and sell oil.” The only worry is long conflict and supply interruptions.
- 2:50 The current oil prices can be lived with. We would have gotten there even with demand growth. Well laid plans have been discombobulated by this. It is not a serious supply side threat to the global economy.
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