I’ve mentioned elsewhere that I am opposed to the U.S. starting a war in Iraq, and I’ve stated my reasons. Nevertheless, we’re in it. “In for a penny, in for a pound”, so we may as well make the best of the situation. Anyway…
When the war started, Wall Street soared. After the “bad day” yesterday, stock prices have fallen. CNN reports that investors have had a “reality check” and now realize that this will not be a hundred-hour excursion like the last one. What they hell did they think? (A rhetoric question; they thought it would be a cake walk like before.) We’re fighting an enemy on his own ground. We are trying to topple a leader who will fight to the last to stay in power. Of course there will be casualties, and a lot more than the hundred or so that people hypothesized in polls. Are Americans really so naive as to think that we can just stroll into Baghdad, knock on Saddam’s bunker door, and say “One-two-three on Saddam!”?
Wars kill people. They kill your sons and daughters and your friends and neighbours. Sometimes they are fought too soon, and sometimes they are fought too late. Sometimes they are necessary and sometimes they are not. But whenever they come and for whatever reasons, people are going to get killed. Is that so hard to understand? Why are people shocked that we’re taking casualties? It’s the nature of the business.
I don’t know what worries me more; that people don’t realize their side will have people killed in wars, or that people are buying or selling stocks based on the tides of war. (Now I’m the one who sounds naive.)
News outlets want a sound bite to try and explain rationale behind large moves in the stock market. Don’t pay them too much mind. If there wasn’t a war, the news would have sited profit-taking following the largest one-week gain in two decades (actually, I saw one quote regarding profit-taking due to uncertain times (extended war) as a reason).
Wall Street wants up markets, which lead to increased profits, so small positive news tends to have outsized effects on the financial markets. However, given the scope and breadth of bad market news and data, it takes little to bring traders back in line.
Yeah, but what I don’t get is that with the threat of war, stocks drop, once the war actually comes, up goes the market. War is great for business, I guess?
I lost a big chunk of $$$ today, and I hate to think what’s coming tomorrow - the evening news is reporting that GWB has finally put
a number on the war and it’s big - $75 billion, not including the rebuilding of Iraq.
Almost 4% of the market’s value down the tube today. As the guy
on the news said, “this is a headline-driven war”. We’ll have to wait and see what effect today’s headline will have on Wall Street
tomorrow.
No. Uncertainty is bad for business, and a threat of war represents a greater uncertainty than the war actually occuring. To put it another way, if you think war is good for business, just watch the stock market rocket up once the war stops.
