Back in 1973 during the Yom Kippur war, which started just 1 day before this one, the price of oil quadrupled after Middle East state cut supplies and embargoed export. Tonight the price is +4% based off fears that Iran can be on the table for war — as the connections between the Hamas attack into Israel point to that direction.
It’s worth noting, $XOM traded up 1% in October of 1972, while stocks like $DIS and $F dropped more than 10%. The overall market was barely down when the war broke out — but it absolutely fucking plunged in the following month, with the $SPY dunking by more than 10%.
In November of 1973, shares of $DIS Mcplunged by 37%, $IBM -5.4%, $DD -14%, and $F -19%.
Given the already tenuous state of markets, I’m afraid this could be the catalyst to cause a fucking rout.
NASDAQ futures are -90, which is child’s play compared to what could be coming. I expect this war to be different from previous Israeli wars, such as 2006. You could expect to see it get ugly, as support for total war increases thanks to the malevolent nature of this conflict and seething hatred between Israel and the Palestinians. Will Hezbollah and Iran get involved — potentially drawing in US forces into the fray?
One thing is clear, the Ukrainian war is a catalyst for this action, since the US is bogged down supplying Ukraine with munitions. It would be incredibly difficult for the US to supply a protracted war against both Iran and Russia without first initiating war powers for production to mobilize military procurement 10-20x current levels. In no way is the west prepared for a long term conflict and I am not so sure Israel is ready for it either, even though I have no doubt their morale is very high and passions running extremely hot. If we learned anything from the Ukraine war — it is that modern warfare neutralizes many aspects of traditional post ww1 warfare, with drones and anti-tank / anti-aircraft missiles proving highly cost effective deterrents that bogs down elements of all armies on the field.
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I seem to recall it was a different time back then ( I was 20 years old and my Dad kept topping off the Chevy Impala – block long waits for gas). King Faisel of Saudi Arabia led the boycott but today the Saudis and Iran are not friends (Saudis also would not be sad if Hamas was destroyed). Plus today demand destruction has started ( even though all of the “experts” said we are going well over $100/barrel). Any runup in price will lead to further demand destruction. The Saudis may turn up the taps. The wildcard is of course Biden. He emptied our oil reserves and hates the drilling in the USA (at least the people who are writing his scripts do).
The idiots in the Brandon administration have literally ruined the PLANET at astonishing speed. From banning drilling at home, to leaving 93 BILLION dollars in weapons for the Taliban in Afghanistan, to inciting a war against Russia and encouraging Iran’s terrorist proxies from Hamas & Islamic Jihad who run Gaza, to Hezbullah and Fatah to torture, rape & murder Jewish kids in the streets of Israel. This administration then has the GAUL to go on the TEE VEE and claim there is “no proven connection yet between the 6 BILLION dollars given to Iran last month” and the horror unfolding in front of our eyes. China has gotten stronger and there is even evidence of Brandon’s son (and perhaps the ‘big guy’ getting his cut as well) getting money from a CCP company.
Weren’t we better off with the silly Orange man and his mean tweets? Waiting for the antisemitic, anti-Israel conspiracy comments in 3, 2, …