Sunday’s Open Will Be Interesting

We began the allied attack on Libya today. This wasn’t a surprise, and the market digested the news of the impending attack before the close on Friday.

The knee jerk reaction is to sell stock index futures on Sunday night when they open. I am not so sure about that. I wouldn’t be short US Treasuries, but the stock market is unclear. We have a lot of potential news to digest on four fronts; Europe Debt, The Middle East situation (Bahrain, Saudi Arabia and Yemen), the Japanese clean up and nuclear situation, and now war in Libya.

I am not a battle expert, but it seems to me the only way to end this thing is have the head of Gaddhafi. If he remains in power, why would he stop attacking rebels? Not removing him from power risks an extremely long protracted operation that will end in a war anyway. We did no fly zones in Iraq, remember?

Quadaffi isn’t going to step down, and I think he has the impression that no one will want to end it for him. We will have to see what UN resolve is. It will be interesting to see what comes out from Hillary Clinton, since she seems to be directing the show here. Obama has assumed the role of mouthpiece.

I get the sense that Obama is out of the loop on this. The more strife there is in the world, the more he seems like he is in over his head. Nate Silver disagrees with me. He tweeted today that Obama will likely get a bump in popularity over this whole issue. I disagree, because I think Americans see Secretary of State Hillary Clinton out in front meeting with Sarkozy and Merkel. It’s her show, not his.

The quicker Gaddhafi falls, the better it is for the market. What type of government fills the void is anyone’s guess. News out of Japan so far shows the situation stabilizing. That’s positive for the market. The world is certainly in flux.

The Congress held some hearings on a no fly zone, and it seemed like Defense Secretary Gates was against enforcing one. Senator McCain was in favor of action. As the US administration dallied, Quadaffi made his move. Here is what Senator Obama said about Pres. Bush’s war in Iraq.  Colin Powell’s statement of, “You break it you fix it.” rings in my ears.

The Libyan situation is different from the Iraq situation because the allies are supporting it. If this results in them tossing some dirt on Gaddhafi’s body and we don’t hear from him anymore, then it should be okay in the end.  But if it ends up being a lengthy engagement, this was the wrong chess move at a very precarious time.

Is Code Pink mobilizing against Obama?

(who knows how to spell the Libyan terrorists’ name-that’s why I used both spellings)

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