On the Paris Terror Attacks

Friday's attacks in Paris demonstrate that ISIS or other terrorists can reach into the developed world without grand gestures like 9/11. Unless the attacks prove to be a wavefront of widespread similar events, the animal spirits of unity and pride unleashed can offset any "terror tax" of surveillance and restriction of movements. If, as a consequence of the attacks, regional instabilities in the Middle East lead to higher oil prices, that (all else equal, and to a point) would be a positive. In the meantime, we are still slipping into the first - ever recession caused by too - low oil prices. China and Japan are already there -- soon it will be obvious elsewhere, and hopefully the Fed will see it in time.