Re: stocks
Tom R said:
Simple. War is good for business. The ultimate in consumption and a bottomless government contract.
The threat of war makes people wary, hence they hesitate to purchase stocks. There are also other concerns, such as the move to more stable investments (gold, etc.) and rising oil prices with concerns over supply, that divert funds from stocks.
At the start of a war people assume a quick victory and the usual results (a surge in confidence, lower oil costs, increased spending, etc.). As a result, they want to get in quickly, when prices are low.
I think that is a dangerous strategy this time around. There are underlying problems with the economy that will not go away with a war and/or victory in Iraq. I think the uptick we see will be short-lived. The market will only begin to rise once there is a prolonged economic expansion.