I'm often baffled by the correlations that business writers point to between daily events and barometers like oil prices and the stock market. As Nassin Nicholas Taleb points out in The Black Swan, we really don't know what causes these hour-to-hour or day-to-day gyrations. No controlled experiment is possible to test any theory.

For example, the New York Times' lede this morning is: "The major stock exchanges in New York followed Europe and Asia higher Monday, inspired by government efforts to reassure investors."

So, with that in mind, let me craft my own unfalsifiable take on today's financial news:

Markets rallied Monday morning on the news that Princeton economist and New York Times columnist Paul Krugman won the Swedish National Bank's economics prize in memory of Alfred Nobel.  The selection of Krugman, who has been harshly critical of the Bush Administration's illegal activities and unwise economic policies, is seen by the markets as pressure on the US government to fully respect citizens' Constitutional rights and provide universal health care, policies Krugman has advocated.

Alas, though Krugman was selected for the economics prize for his work in international trade, I don't recall anything in his columns that shows much interest in the advantages or disadvantages of relocalization.

I have, however, appreciated his willingness to actually apply economic theory (instead of the more common hand waving) to understand the role of supply and demand vs. speculation in the most recent phase of the ten-year rise in oil prices. Some of his blog posts helped guide my thinking in a column I wrote on the subject.