February 17, 2003
A Better Saddameter?
Some fun (e.g., VodkaPundit) has been had around the Blogosphere at the expense of Slate's Saddameter ("Chance of Invasion Today [February 14]: 94" percent). Introducing the feature, William Saletan writes:
Four years ago, Slate published a Clintometer that tracked President Clinton's chances of being removed from office during the Monica Lewinsky scandal. This year, Slate presents the Saddameter, which monitors the chances of a U.S. invasion of Iraq.
The Saddameter probability of invasion has increased from an initial 58 percent (on November 18, 2002) to a high of 97 percent (on February 10, 2003) and stood at 94 percent as of Friday.
In search of some objective data, via Chicago Boyz, I found this Bloomberg News article on traded "Saddam Hussein Futures." As of February 10, this market was placing odds of 43 percent that Hussein would be out of power by March, 74 percent by April, 82 percent by May and 84 percent by June (updated data available here), so Slate's forecast seems a bit more optimistic to those of us who support this war than that of people willing to put their own money on the line (assuming, correctly I think, that an invasion of Iraq is equivalent to Hussein being removed from power).
(The current implied probabilities are 35 percent, 63 percent, 73 percent and 77 percent, respectively. There appears to have been a small decline in the shortest-term contract over the weekend, perhaps in reaction to this weekend's anti-Democracy-in-Iraq protests. The June contract actually increased slightly since Friday.)
Here's a chart showing the prices of the June no-Saddam contract:
Some more objective evidence:
Weekly Review & Analysis
Jordan Investment Trust Pllc.
Issue No. 40, Dec 15, 2002
The threat of war had a negative impact as well on the performance of Arab stock markets, with Palestine, Morocco, Tunisia and Egypt suffering most. The stock markets of Jordan, Saudi Arabia and Bahrain, which enjoyed good performance in the first half of the year, retreated in the third quarter but stayed in positive territories in the fourth quarter. Kuwait and Qatar have so far this year surged by more than 30% and UAE by 22%. We expect Jordan and most GCC stock markets to do well next year as Iraq-related political/military tension subsides. However, the uncertainty associated with future US-Saudi relations is likely to have an adverse impact on the performance of the Saudi market. Kuwait will benefit from the absence of Iraqi risk on its northern border. The UAE and Oman will also do well, while Qatar may witness a correction after two years of successive stellar performance in which the market index rose by more 30% annually. We remain bearish on Palestine, Morocco and Tunisia next year and opportunistic on Lebanon and Egypt. (emphasis added)
Source: Bloomberg.
By any measure, then, things appear to be looking positive of late for Democracy in Iraq.
Posted by oscarjr at February 17, 2003 02:31 PM | TrackBack
