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Politics : Stop the War! -- Ignore unavailable to you. Want to Upgrade?

To: Just_Observing who wrote (2063)	3/23/2003 9:25:50 PM
From: Just_Observing	Respond to of 21614

Study: War Costs Stock Market $1.1 Trillion By Michael Kahn Saturday March 22, 4:41 PM SAN FRANCISCO (Reuters) - Even before the United States went to war against Iraq, the threat of conflict had drained $1.1 trillion from the value of the U.S. stock market, according to a study released on Friday. The research, which was released as the market posted its biggest single-week gain since the jump that followed the Sept. 11 hijacking attacks, tracked the performance of a novel financial instrument called the "Saddam Security," essentially a bet that the Iraqi leader will be deposed. The researchers at Stanford University and Harvard University looked at how much value the U.S. stock market lost as online bets increased that the United States would go to war to oust Saddam Hussein. While the S&P 500 index rallied 7.5 percent this week in anticipation of a swift conclusion to the war, the rising probability of a conflict had already knocked 15 percent off where the stock market would have been if the United States had not taken on Iraq, the study said. Most of those losses came in shares of consumer goods companies, airlines and technology companies and those relying on discretionary spending, researchers said. "All the news this week has been about timing," said Eric Zitzewitz, an assistant professor of economics at Stanford's School of Business who co-authored the study. "The cost of war was priced in a while ago." To assess the impact of war jitters on the market, the researchers tracked an online bet offered by a Tradesports, an Internet-based "betting exchange" based in Ireland. Since September of last year, Tradesports (www.tradesports.com) had been offering a financial instrument that pays $10 per share if the Iraqi leader is ousted by a certain date. 'SADDAM SECURITIES' The trading in those "Saddam Securities" provides a proxy for how the market saw the probability of concluding a war ending in Hussein's ouster, the researchers said. For instance, the March "Saddam Security" last traded at $7.80 on Friday, implying a 78 percent chance Hussein will be ousted by end-month. That was up from a previous close of 65 percent and up sharply from 17 percent earlier this month. The researchers then correlated that record of market-based probability to changes in oil and stock prices and related futures and options to see how markets have reacted to the war risk, the researchers said. "A lot of experts have looked at the budgetary costs of the war," Zitzewitz said. "We thought that was only looking at the tip of the iceberg. We wanted to look at the effect on financial assets." Other experts have estimated that the direct cost of a U.S. war to the government would be between $22 billion and $140 billion, depending on how long the conflict runs and how willing the United States is to fund Iraq's reconstruction. Meanwhile, the stock market has priced in a 70 percent probability that the eventual impact of the war on the market will lead to a decline of zero to 15 percent and a 20 percent chance of a 15 to 30 percent dip, the study said. The worst-case scenario was what the researchers said was a small but significant 10 percent probability of a steep plunge of more than 30 percent. "What this means is that by mid-March, about 95 percent of the war's effect on the U.S. stock market has already been priced in and $1.1 trillion of the nation's wealth has disappeared," said Justin Wolfers, an assistant professor of political economy at Stanford Business School. sg.biz.yahoo.com

To: Just_Observing who wrote (2063)	3/23/2003 9:29:50 PM
From: Sojourner Smith	Read Replies (1) \| Respond to of 21614

Oh yeah Since tonight is awards night: And the winner #6 tonight is for the Saddam Hussain Human Shield award. Given to those have choose believe Saddam over Bush.

To: Just_Observing who wrote (2063)	3/23/2003 11:20:15 PM
From: Raymond Duray	Read Replies (2) \| Respond to of 21614

IT'S MONEY THAT MATTERS IN THE OL' U.S.A. The Oscars come and go, Michael Moore rants, and our new leading man Adrian Brody calls out for peace and justice. But the contractors of war call out for profit! Here's the "coulda be a contenda" short list of bribe paying Republicans who are about to see a huge windfall from George Bush's dirty little war. Let's be proud of these Americans. They know how to play the game: nytimes.com <SNIP> March 23, 2003 Which Companies Will Put Iraq Back Together? By DIANA B. HENRIQUES WAR began last week. Reconstruction starts this week. That, at least, is how it looks to government contract officers, who in the coming days plan to give American companies the first contracts to rebuild Iraq, a task that experts say could eventually cost $25 billion to $100 billion. It would be the largest postwar rebuilding since the Marshall Plan in Europe after World War II. That comparison is being made at every opportunity by Bush administration officials, who emphasize American generosity and farsightedness. But the government's decision to invite only American corporations to bid on these contracts has added to the profound international divisions that already surround the war. The United States plans to retain control over the occupation and reconstruction of Iraq, allowing the administration to decide how it will spend the money needed to repair the country. These contracts will be financed by the taxpayer, although senior administration officials have hinted broadly that Iraqi oil revenue will also be used to rebuild the country. "We're going to use the assets of the people of Iraq, especially their oil assets, to benefit their people," said Secretary of State Colin L. Powell on Friday. At the top of the to-do list, according to confidential bidding documents, is rebuilding Iraq's only deep-water port, the harbor at Umm Qasr, where cargo is loaded on ships that travel down a waterway in southern Iraq to the Persian Gulf. Dredging work is expected to begin immediately after the port, which was seized by a British-led invasion force on Friday, is secure enough. The bid terms give contractors no more than eight weeks to prepare the port to handle the unloading of pallets and containers from large ships. A separate bidding process is being conducted by the Defense Threat Reduction Agency, a unit of the Defense Department. That agency is seeking bids and résumés from companies that are skilled in dismantling and neutralizing chemical and nuclear weapons. Other immediate priorities will be overseen by the United States Agency for International Development. These include rebuilding two international and three domestic airports, ensuring that potable water is available and reconstructing electric power plants, roads, railroads, schools, hospitals and irrigation systems. Bids sought by the Army Corps of Engineers call for more "expedient" repairs throughout the region that would be controlled by the United States Central Command. <Continues..........>