Bin Laden and the Stock Market?

Seen in a recent cnnfn article: “chatter that we may soon nab Bin Laden helped stocks recoup their losses”.

I know hope springs eternal for an end to the mostly down movements of our stock market over the past three years, but bin Laden’s various terrorist movements have done little to impact our economic policy (Bush still won’t admit that the war’s going to cost anything, hence no policy change) and have impacted very few companies. Airlines could complain, as of 2001 and into 2002, but if they’re still complaining about bin Laden and the 9/11 attack, then they’re looking now into fairly ancient history, as far as business impacts go. So, how capturing bin Laden should cause the future business potential of any company to go up (and thus its stock price), I don’t know. You could say that markets react to the threat of war, because war increases uncertainty, which makes predictions for future economic prospects less dependable. Using that logic, capturing bin Laden reduces the threat of war, and so reduces uncertainty, and thus there’s more confidence in economic predictions. But our major threats of war right now have nothing to do with bin Laden (OK, little to do, since one of the claims against Iraq is that they support terrorist organizations like that of bin Laden). Iraq’s weapons of mass destruction have no connection to bin Laden, unless they sell them to him and North Korea’s brinksmanship has not been linked in any way to our fanatical foe.

Maybe what the stock market is really reacting to is the idea that, as American investors, we’re not really scared of Iraq impacting us personally, or North Korea making an impact to our daily lives. Yes, our military will end up in harms’ way, but not us personally. Whereas bin Laden was very effective at least once. Maybe the stock market’s not breathing a sigh of relief that companies are going to do better or that the country won’t go to war, but maybe that we won’t personally be killed before we can spend our money. Or, looking at it even more perversely, since we don’t think we’ll be killed by the Taliban madman, we need to stop living for today by buying the bigger hotuse or that SUV with the great deal, and instead invest our money, since Social Security sure isn’t going to support us in our newly rediscovered future old age.

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