Politics trumps stats
British Prime Minister Tony Blair did his best a few weeks ago to show that he had learned from his mistakes in Iraq. So he gave Iran the “all clear” sign on their nuclear program. A stupid idea, for sure, and not one that can fix whatever mistakes were/were not made leading up to the Iraqi war.
Today, traders came in to work to find out that Iran had taken 15 British sailors hostage off the coast of Iraq. Price of oil futures will rise (just in time for the weekend pump) and the markets will have a hard time getting excited about the pending housing data. So much for Mr. lair’s strategy of making friends with (bribing) the Iran government.
For all the time and effort put into analyzing the business section of the newspaper, this is another reminder that its actually the “front” section, the news section, that truly impacts the mood of the markets. Too many i-bankers and folks on the desk pull out the business (and maybe sports) section each day and ditch the rest of their dead tree media product into the blue box near their desk.
As Roger Ehrenberg would command, look to the big picture.