Obama Punts Syria to Congress, will Congress Vote to Stimulate the Stock Market?

As we stated before, what is currently occurring in Syria has serious implications for all of humanity, and with the weight of the world on his shoulders. Obama has chosen to do what any self-respecting statesman, circa 2013, would do.  Mr. Obama has punted the question as to whether or not the United States should intervene via military action to the US Congress, who, it would appear, have been pulled away from their leisurely summer pursuits in an effort to inform themselves on the situation before they cast a vote on the matter.

What will they decide?  The world is holding its breath in anticipation of the outcome of this latest political charade.  For most thinking people, the answer is clear, the US should avoid a conflict that will not only trigger a series of inevitable side shows which are sure to include standoffs with China, Russia, and Iran, complete with Israeli sabre rattling in the background, but will most surely further bankrupt a government which has operated in the red without a budget, let alone a clear foreign policy, for five years running.

Fortunately for investors and unfortunately for the Syrian public and the world at large, the US Congress is not renowned for its thoughtfulness in such matters.  While the British MPs took the high road and have prohibited their fearless leader from committing to military intervention, we would expect the US Congress to reluctantly authorize the use of force holding up an ambiguous “moral obligation” as the ultimate reason they have chosen to reluctantly order a military intervention.

Moral arguments aside, war, like zero bound interest rates and quantitative easing, is good for stocks and moneylenders and bad for everybody else involved.  Should the US Congress authorize military intervention in Syria in their upcoming vote on the matter, we anticipate a short-term dip in equities, perhaps only a few days, which will present a tremendous buying opportunity.

The situation in Syria is lamentable and a blight on the basic humanity of us all.  It is also a powder keg that threatens to further destabilize, were it possible, the fragile Middle East.  Should the powder keg go off, equity values are likely to rise dramatically in the medium term against the backdrop of a widespread military conflict.

Unfortunately, price levels for everyday goods will rise even faster.  While we hope for a no vote, it would be wise to anticipate a yes vote and plan accordingly.

Key Indicators for September 2, 2013