<<wars do usually have a positive effect on the economy and the markets, but only as long as one is a) sure to win and b) doesn't become the target of devastating counter-attacks at home>>
...and of course, neither of these is likely to be the case here. I support a "war" of sorts, but it's gonna have to be the sort of counterterrorist, counterinsurgency type of conflict requiring excellent intelligence capabilities that the US has not particularly excelled at in the past (to wit, Saddam still lives). This is not to say we can't develop the necessary skills, but they aren't available "off-the-shelf". It will certainly be a prolonged struggle with a poorly-defined enemy, about as far from an "easy" Desert Storm-like victory as any military action could be. Unfortunately, the finer points of the situation are lost on many stock analysts, strategists, politicians and talking heads meaning that somewhere down the road our political resolve to continue this path will be tested. Tragically, 5000+ dead gives us a major leg-up in the backbone department, but I hope the effort can be sustained for as long as it will be necessary (5-10 years or more, IMO). It will be expensive, unpopular at times internationally and possibly bloody. Not the sort of environment conducive to launching a major bull market (though definitely the environment for launching massive inflation, if the residual debt-trapping from the bubbles can be overcome). |
