Not knowing the details of these earlier battles, I hesitate to give an opinion. But it seems to me that this is not another battle of Kursk, as you have described it. There are two possible scenarios:
The Iraqi defenders are now totally disorganized, allowing coalition forces to move into Baghdad with only token resistance.
The Iraqi defenders are putting up only sporadic resistance and withdrawing into the streets of Baghdad, away from the open fields that are somewhat similar, from a military point of view, to those at Kursk. In this latter scenario, resistance from sniper attacks could continue for months, even after the government had capitulated.
How do these scenarios translate into stock prices? The first scenario seems to be what traders are believing, and it results in a 200+ point gain in the Dow, with drops in oil and gold prices. The second scenario creates more uncertainty, a GREAT DEAL MORE COST, resulting pressure on the U.S. budget, balance of payments, value of the dollar against foreign currencies, higher taxes (mainly for state and local jurisdictions that are getting less federal money), and a slew of other factors that aren't entirely predictable. Under this scenario, the long term trend for equities is probably down, owing to higher interest rates and weak consumer demand. Oil prices drop, mainly because of lower worldwide demand, but gold prices remain strong--probably above $330--because of the weakness of the dollar.
Frankly, it looks like a lousy market over the next six months to a year, and I'm having a lot of trouble finding anything worthwhile investing in.
Art |
