WHEN WAR SMOKE DISIPATES THE ECONOMY'S PROBLEMS WILL BE EASIER TO SEE

militarily, this has been a remarkable couple of weeks. first the bombs started raining down on baghdad, some 13,000 precision guided ordinance were dropped throughout the country. then 100,000 ground troops stormed into iraq, took control of every city, reached saddams palace in 10 days, and secured all oil wells, bridges, dams and airstrips. today we have found the 'smoking barrels' of chemicals. and finally american flags can be seen waving in the streets. and one more thing, we've killed saddam and his sons twice...so far! all thats left is putting in place some type of interim government and we can start bringing our troops home. are we good or what?!

economically, it has also been a remarkable couple of weeks. not one economic data point showed anything but weakness in the economy and yet the stock market rallied nicely in the face of all the lousy fundamentals. a victory of sorts if you dont care about whats really going on with businesses and the economy. but why bother worrying about fundamentals when every company is blaming the war, which is almost over, for their problems. the logic goes something like this. business is bad because of the war, so when the war is over, which should be any day now, business will be much better. so ignore our dismal earnings and lack of guidance going forward because everything will change soon.

why all the focus on the war? plain and simple, its a great excuse for a terrible business environment and it gives managements another few months to address the problems that have nothing to do with the war. i'll bet most ceo's hope the war wont end too quickly because then their excuse will be gone.

and when the war smoke screen is lifted, business and the economy will look much worse then it does now.

have a grateful day!

larry