Friday, July 20, 2007

What A Pullout Might Mean to the Market

Dan Dorfman wrote an excellent piece in today's New York Sun on the bearish market implications a quick U.S. pullout in Iraq might engender. ("Iraq Pullout Could Give Markets an Anxiety Attack.")

We'll weigh in on this very important subject on tonight's Kudlow & Company.

As I recently wrote, U.S. and world stock markets are standing with President Bush. They have confidence in his wartime policies. The remarkable global stock market surge since 2003 is testimony to this and represents a stern rebuke to al Qaeda.

Incidentally, here are a few notable quotes from various investment strategists Mr. Dorfman interviewed:

"If we're seen going home with our tail between our legs, why would that encourage anyone to buy American stocks?" - Bill Rhodes of Rhodes Analytics, former strategist at Merrill Lynch

"We're looking at increased turmoil throughout the Middle East and a possible disruption in the supply of oil. And who's to say Iraq's problems wouldn't spread to Saudi Arabia? For the stock market, it's bound to make things more uncertain and more volatile." Michael Metz, chief investment strategist at Oppenheimer & Co.

"As a market event, I think it's a nonevent, although it might temporarily boost energy stocks through a rapid and sharp increase in the price of oil. A withdrawal, plain and simple, is an admitted defeat. You have extremists in this world who want to change the name of this country from ‘the United States of America' to ‘the United States of Islam,' and the departure of American troops from Iraq would only tend to convince them that such a goal over time is not only not unrealistic, but quite achievable." -West Coast money manager/trader Arnold Silver

It's a great article, definitely worth the read.