It certainly seems that the market is strongly discounting any large disruption in the Saudi oil supply, but I doubt the top 40 stocks in the Saudi Arabian market dropped 11.2% for no reason.
So why exactly do we freak out when Greece, the 31st economy of the world by GDP, could potentially miss a few debt payments whereas we seem almost numb to the idea that the citizens could overthrow the government of the 23rd largest country and producer of 10% of the world’s oil?
Do you remember when we had our little Eurozone “crisis”? The VIX shot up to 45 in a heart beat.
This crisis might take a little while to come to a complete boil, but I actually am much more fearful of the potential outcomes today than I was when the Euro was tanking. You can always print more Euro’s, but I do not know how you settle down millions of rioting middle eastern citizens who effectively control the global economy’s life blood.