Tehran Traders Cross Fingers For Diplomacy

Flag of Iran and united Nations, Radioactiviy sign
AP / CBS
Traders at the Tehran stock exchange are hoping that U.S. and Iranian officials do go ahead with direct meetings in Egypt. That, they say, might send prices soaring.

"We're hoping that this Sharm el Sheikh will be an opening for better times for us," one trader told CBS News correspondent Elizabeth Palmer.

Every day, anxious investors crowd into the exchange. For two years, they've watched the market plummet due to American and U.N. sanctions, imposed on Iran for its refusal to stop enriching uranium.

A big chill has settled over the business community. Investors have been scared off and it's almost impossible to move money through major Iranian banks on the sanctions blacklist – like Bank Sepah, with its strong links to Iran's revolutionary guard.

Hardball sanctions enforcement — led by the U.S. treasury — means that Bank Sepah is no longer doing business with anyone outside Iran. In fact, it's been so effectively cut that, even though it's got plenty of cash, it can't pay its overseas debts.

But the business elite aren't the only ones hurting. Middle class shoppers, many unemployed, struggle to cope with 22 percent inflation.

People can barely afford to buy fruit. One woman says even onions and potatoes are expensive.

President Mahmoud Ahmedinejad's popularity has already plunged as people blame him.

Broker Khosrow Pourmemah knows that side talks at a summit won't solve Iran's economic problems.

But he does think it would be a step in the right direction, especially if they led to better relations with the United States.

"I think discussions, talking, is good," he said.

If Iran's politicians do move from confrontation to negotiation, it's because they, like their counterparts everywhere, know that in the end, they can't ignore the market.