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Tuesday, January 25, 2005

the stock market speaks

i wrote up a post in prose, but as i went to save the draft, blogger fucked it up and i lost it. i don't have time or energy to do it again (i'm lying in bed on tuesday morning) , so i'll write it up in point form.

- israel has been assassinating palestinian political and military leaders
- this is criminal activity - it clearly violates the 4th geneva convention, but this post is about the pragmatics of it
- israel: these assassinations are justified on the grounds that they increase security
- sensible people: they undermine israeli security by inviting retaliation
- israeli stock market (new study): they undermine israeli security.
- the facts: the israeli stock market dips immediately after israel assassinates palestinians political leaders, suggesting that the ruling class anticipates a worsened security situation.
- confirming this explanation for the drop is the differential between different sorts of companies. while retail companies are reduced in value, companies producing perimeter defense products soar. in fact, their response to assassination of palestinian political leaders is twice as strong as their response to palestinian attacks - a 5.6% rise as opposed to a 2.7% rise. unfortunately the article doesn't go into details on these differences
- the palestinian stock market dips after attacks on israeli civilians, suggesting the same conclusions.
- the israeli market - and perimeter defense products - improve after assassinations of military, as opposed to political figures, suggesting that the israeli rulers believe that these actually improve the security situation.



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