Commentary > Wastler's Wanderings
Iraq ate my homework
Seems like Saddam is responsible for everything wrong with our economy. Must be messing with me too.
February 13, 2003: 4:50 PM EST

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Dear boss:

I'm sorry I'm late with my column this week. It's Saddam's fault.

Oh, and the trouble with tardiness lately? That's his fault too. Advertising off? Him again. Oh yeah, and when we misspelled "desperately" in a headline this week? Yep, Mr. Mustache-and-Saber himself.

How is he doing this? Well, it's a chain reaction, domino sort of thing. We've seen it taking place all week.

Just look at the market. Every time the Dow dips, the experts peg it onto Iraq. And who can argue with that? Death and destruction, particularly in an oil source area, does tend to overwhelm other, less dramatic news. The thought of war, to quote Edwin Starr's song, just blows your mind.

"The market continues and will continue to focus on the war," Peter Cardillo of Global Security Partners, pointed out Monday on CNN Money Morning.

See? Smart guys who follow the market agree with me.

Of course, there are some other negatives out there too. By some measures stocks are still overvalued. The S&P 500 is trading at about 15.7 times estimated 2003 earnings. Not as bad as it has been, but with so many companies pushing flat-to-minimal growth estimates, isn't 15.7 a tad pricey?

More monstrosity? Click me

And the dollar is slumping. Usually this could help things because it makes American goods cheaper overseas. Yet with Japan and Germany on the ropes, who's buying?

Now it may not seem like it, but Iraq was probably responsible for the investment bubble that led to today's persistent overvaluations (I'm just not sure how). And Japan and Germany stagnation ... I suspect Crazy Whiskers there too.

Anyway, you get my point. Iraq lies behind everything that's going badly today.

Alan Greenspan is on board too. This week he laid it out to Congress. The economy is all set to go ... productivity high, interest rates low ... a veritable revving engine, if it weren't for this "geopolitical risk" thing. Businesses just don't want to invest in widget makers if they don't know the outcome of a fight between a superpower and, well, a small but vocal country 6,000 miles away. (Or do we already have enough widget makers? ... Nah.)

And every company that is coming out with flat expectations for the current quarter -- from techs to airlines to retailers -- has been harping on this theme. Business is going to be flat because customers don't want to spend with this Iraq uncertainty out there. (Of course, some companies in these sectors -- Dell, Jetblue, and Brookstone, for example -- have been going gangbusters. But exceptions prove the rule, right?)

Anyway, if it is good enough for the market, Greenspan, and Corporate America, it's good enough for me.

I haven't done my column. It's Iraq's fault.

Sorry.  Top of page

Allen Wastler is Managing Editor of CNN/Money and a commentator on CNNfn. He can be e-mailed here.

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