Amy, RE: If US engages war with Iraq, what's the estimated percent drop that could occur? (Someone had previously said Desert Storm resulted in a 10% to 15% drop.)
Oh, on the contrary, the market rallied strongly when we attacked in Desert Storm. It had dropped 10-15% in the 6 months prior to Desert Storm, after Iraq invaded Kuwait, but after we attacked, the market rallied strongly. We haven't seen pre-Desert Storm prices since.
More importantly, I have no real idea where the market might go if/when we attack Iraq, but given that most people already expect that such a move is inevitable, I suspect that the reaction will probably be smaller than most think. (The best indicator to me that everyone already expects an attack is the recent price action of crude. The economy appears to weaken, natural gas prices are dropping, and yet crude prices have stayed strong.)
Now if we come out and say that we're not going to attack Iraq, that we've been able to remove Saddam H through peaceful means, now that could get a real rally going. |
