Global Stocks Drop as Iraqi Bombing Resumes

As Obama gives the military the go ahead to resume bombing in Northern Iraq global stock markets are tumbling–at this point it is just a modest rout with Asian shares off just less than 1% while U.S. futures are off by .6%. We don’t believe this will cause a massive drop in markets as it is likely the bombing will be very limited (but if you are looking for a reason to sell, because of the collapsing European economy this would give you an excuse).  It seems to us that the never ending vasillating and waffling of the Obama administration is causing a steady stream of challanges throughout the middle east and eastern Europe.  When the ‘bad guys’ know that your balls are the size of pinheads there is no fear.

As always in one of these instances you can do nothing to protect yourself investment wise–markets are moving now and any move you make early tomorrow will likely backfire as markets reverse course over the remainder of the day.  Additionally we are likely to see a safehaven play come in the form of a lower 10 year treasury yield (trading down at an incredible 2.38% tonight) potentially propping up prices of yield sensitive issues.