Thursday, October 18, 2007

Markets can be incredibly accurate, and often, in discounting the future. The New Yorker's terrific financial writer, James Surowiecki, wrote a book about this phenomena.

With that in mind, the trading of Iraqi bonds does not offer good news about the surge. The bond prices have declined and Michael Greenstone of MIT says this decline signals a “40% increase in the market’s expectation that Iraq will default...This finding suggests that, to date, the Surge is failing to pave the way toward a stable Iraq and may in fact be undermining it.”

But then this market is probably being driven by the Democrats, right?

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