I'm exercised about Iran's nuclear threat, all of a sudden, and the possibility of the US and, more particularly, Israel taking military steps to thwart the Iranians' ambitions. Maybe on an emotional level my ideas are coloured by watching the last episode of Dr Who but until today I was inclined to see the recent headlines about Iran and Israel as no more than attention grabbing talk. What I read today suggests that it's only insufficient intelligence about the whereabouts of all of Iran's nuclear facilities that's holding the Israelis back.

Even more worrying in a sensem is talk of Israeli - Syrian negotiations over the Golan Heights. So far this looks like talks about talks with Turkey acting as broker but it could turn into a serious clearing of the decks on the part of the Israelis. Although the scale is far smaller and I'm not suggesting that the protagonists compare with Hitler and Stalin Israeli - Syrian talks, after so many years of bad blood - seem akin to the Nazi - Soviet pact of 1939.

If Israel did attack Iran, presumably the role of the United States would be to keep the oil flowing from the Persian Gulf by stopping the Iranians from closing the Straits of Hormuz. Would the Iranians themselves stop exporting oil? Can they afford to do that? Is this the real fear that stands behind the rise in oil prices this year?

My hunch is that, as much as anyone can have at this late stage, Gordon Brown has mastered the energy security brief. Hopefully, he's been preparing for the eventuality of an even more dire energy security situation. He needs to have done that because such an Israeli attack would probably lead to petrol rationing within days.

I'd expect the Israelis to be condemned for an attack like that but the logic of their need to remove Iran's nuclear threat is undeniable (if it exists). Also, it's easy to see that they would very much like President Ahmedinajed to fall from power. However, history seems to teach that short, sharp military actions with neat objectives rarely work out as expected. That's not to say that either the Americans or the Israelis are considering some kind of occupation. The US would rather see Iran undergoing strategic restraint (like Saddam Hussain after the first Gulf War). Nevertheless, there are plenty of tinder-box situations ready to go up in that part of the world.

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The stock markets has done worse in the last week than I expected but I still think it may have reached the bottom. Not that I'm expecting a very rapid improvement from here on. And I'm beginning to think that finance ministers, central bankers and financial commentators haven't really got a clue about the world economy picking up towards the end of 2009; they're just hoping that happens.

There was an interesting article in yesterday's Telegraph, saying that 'shorting' of some shares has reached such proportions that the hedgers are having to pay more to borrow the stock to short with AND that some institutions are refusing to lend the shares of some companies (because it's against the institutions' interests).

Depressing finance news items included a report on M&S carrying on with buying back its shares just days before the price tumbled after last week's trading statement. There have been reports that Texas Pacific was able to pull out of its B&B investment because the bankers left a material adverse change clause in the agreement by mistake. Part of the rationale of private equity is supposed to be speed with which it can react to situations; Texas Pacific certainly proved that point. But it looks as if it may be more a case of the speed with which private equity HAS to react to situations because their using other people's money. the economic outlook doesn't look good unless investors can become more robust and patient.

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I've read two good lightweight books recently; 'The Spanish Game' by Charles Cumming and 'Dance of Death' by Barbara Nadel, one of her series of police detective novels set in Istanbul (except this one takes place mainly in Cappadocia).

I went for one walk last week but it's one I've done a couple of times before. This week is going to be a particularly busy week so I don't expect to get another walk in.