Wall Street Ponders Nuclear War

The Wall Street Journal reports:

Here’s a question that’s probably not on the CFA exam: What happens to financial markets if two nuclear-armed nations go to war? After a week of escalating tensions between the U.S. and North Korea, some financial analysts are now taking a stab at it.

Strategists at Nordea Markets estimate that in the unlikely event of “a potentially uncontained military conflict” in which global superpowers like China and Russia get involved, the European Central Bank would have to implement “highly dovish forward guidance” and the yield curve would likely flatten due to weaker risk appetite.

Here’s the forecast from Shane Oliver, head of investment strategy and chief economist at AMP Capital: Should there ultimately be a significant military conflict, with North Korea likely launching missile attacks against South Korea and Japan, “this would entail a more significant impact on share markets with, say, 20% or so falls before it became clear that the U.S. would prevail.”

The WSJ’s headline for this piece: “How Do You Price A Problem Like Korea?”

  • AmeriCanadian

    So it’s up to the rich and powerful to keep us out of war? I thought they profited from it.

    • Mark McGovern

      Not nuclear war. Contamination and extent of devastation cannot necessarily be contained. So, if they prefer a bunker to Caribbean waterfront villas, then I guess they won’t care.

      • Acronym Jim

        Exactly, conventional warfare allows military exploiters to sell to both sides. In a nuclear war, at least one side is no longer in a purchasing position.

        • Mark McGovern

          And in fact they may be in a “disintegrated” personal position, with assets largely vaporized.

  • Todd20036

    Here you go. Any survivors aren’t going to care about profit, gold, long term investments.

    They will care about food, water, sewage, and medical issues, and oh yeah, NOT DYING

    • Tulle Christensen

      Good thing I finished my Fallout 4 play through

      Anyone know where I can find power armor?

  • Skeptical_Inquirer

    This shows why WSJ and its target audience has no fucking sense of reality. I flip to the editorials because my office gets the newspaper and it’s always cloud cuckoo-land about Randian principles and complete disavowal of how much pain/death/terror their greedy, rapacious and short-sighted behavior causes.

    • AmeriCanadian

      My office receives both the WSJ and Kiplinger Letter. It’s dog-awful right-wing porn.

      • Skeptical_Inquirer

        It really is porn. It basically gives rich people a butt smooch about how they’re masters of the universe and nothing they do is wrong. They would still pick Dump over Hillary even now.

        • popebuck1

          Well, c’mon. I mean, her e-mails!

    • Raising_Rlyeh

      My dorm had free issues of the WSJ and I’d read the editorials with morbid fascination.

    • JCF

      Points for “cloud cuckoo-land”! Aristophanes’ zinger should get more play…

  • Acronym Jim

    Right. The decimation of the economic and manufacturing powerhouses of Japan and the Republic of Korea would only cause a 20% fall in the markets before the US bombed the shit out of NK. Sure.

    SMFH

    • Stephen Elliot Phillips

      Russia AND china have defense treaties with N Korea. There wont be a nuclear war with north korea unless the trump crime family wants to completely destroy our country over a tweet storm.

      • Mark McGovern

        And based upon what we’ve seen so far, they would never do that. Right?

      • Which is exactly what I’ve been screaming since the day after the “election.” Just call me Cassandra.

      • Uncle Mark

        It is unlikely that China or Russia would sacrifice Beijing or Moscow over a provocative Pyongyang. Furthermore, China’s economy is tied with the US economy with their close trading relationship and their remaining investment in the US Dollar. Retaliation from Russia & China would not be nuclear.

        Russia, on the other hand, would love nothing more than to see the US embroiled in a conflict with China, as well as seeing S Korea and Japan smoldering from N Korean attacks.

        • boatboy_srq

          “I am authorized to say the action we are now reporting may well bring the war within measurable distance of its end.”

  • BobSF_94117

    the European Central Bank would have to implement “highly dovish forward
    guidance” and the yield curve would likely flatten due to weaker risk
    appetite.

    “Flatten”. I think the operative word is “flatten”.

    • Mark McGovern

      As in: Hiroshima and Nagasaki were “flattened”…

  • Hanwi

    Good thing I keep some hard currency in my mattress 😉

    • Tomcat

      In event of nuclear war,,, you can eat it with dressing.
      If you already have the dressing.

      • Kevin Perez

        The dressing would go bad pretty quickly without electricity for the refrigerator.

        • Tulle Christensen

          A vinegar based dressing would last for a while

        • Silver Badger

          Don’t need electricity for oil and vinegar. Currency is not nutritionally sound though.

  • geoffalnutt

    Annihilation measured in dollars? We deserve to be wiped out.

  • Mark Née Fuzz

    Wasn’t Trump supposed to be the candidate who’d be good for business? How’s that working out, Trumpanzees?

  • Gustav2

    The price of flat screens we use in almost everything would skyrocket if South Korea was in a ground war, plus some parts for autos.

  • Craig Howell

    The Trump Bubble in the stock market may be about to evolve into the Trump Mushroom Cloud.

  • That_Looks_Delicious

    But maybe if the world blows up Shkreli will get out of having to do time in jail.

    • Librarykid

      to what end? He might be an asshat, but he will die, too.

      • Bluto

        Cockroaches will survive, he’ll be fine.

  • Skeptical_Inquirer

    Do they mention or take into account that the US might be considered a fucking pariah state after turning another country into glass when it really didn’t have to?

    I make no excuses for NK’s leader but fuck, you can tell Don WANTS to use nukes.

    • worstcultever

      At this point I honestly think Kim is saner, smarter, and more trustworthy than Trump. That’s how fucked I think we are.

      • AmeriCanadian

        Smarter, yes. He definitely knows how to push Drumpf’s buttons.

        • worstcultever

          Well, that’s where I think he’s *not* smart. Toying with a demented imbecile is juvenile and unwise too. A few other statements have been more mature. Gah, what a fucking mess.

          • AmeriCanadian

            Provocation is Kimmy’s goal. He’s hoping that the U.S. will preemptively strike. What else explains his recent statements? If it’s true that China and Russia will come to NK’s aid, then Kimmy gets what he wants…destruction in one form or another of the U.S. I think he’s so demented that he doesn’t care that his country will cease to exist. His eye is on bringing down the U.S.

          • Librarykid

            Mutually assured destruction Do not think the US is not going to fire off bombs if we are attacked. We are all fried.

          • Snarkaholic

            Depending on which religion (if any) he follows, he may believe that he’ll just be reincarnated…and into better circumstances.

    • Librarykid

      Like toys a child wants to play with, so it is with the nuclear weapons of the United States to 45. It is his ultimate statement of being a man.

  • Joe in PA

    Ugh, I’m going back to bed. And by bed I mean bunker. 🙁

  • Ninja0980

    Another recession, oh goody!

  • Ragnar Lothbrok

    Dead consumers slow down on their spending.

    • Tomcat

      Damn deadbeats.

      • Cindylswisher

        Station128s

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    • GayOldLady

      No consumers, nothing left to consume.

  • Tawreos

    Wall street can go fuck itself. There would be fewer problems in the world if we didn’t base so many things on how the stock market is doing.

    • Tomcat

      True, hungry people all over the world check their stocks everyday./s

      • Tulle Christensen

        If they would just eat instead of checking their stocks it would solve the worlds hunger problems /s

    • Uncle Mark

      These fuckers will be kicking out articles concerning where to place your investments, if Southeast Asia and part of Japan are smoldering. The markets hate chaos and the reactions to chaos can be impossible to predict…however they want to assure their readers (and advertisers) that life will go on, despite this “inconvenience.”

  • Natty Enquirer

    Do death wish and greed always walk hand-in-hand?

    • The_Wretched

      Return = risk.

  • IAMBOWLINGGREEN

    Looks like North Korean’s have the world’s deepest underground metro system, to hide in the even of nuclear war :

    http://www.express.co.uk/news/world/839866/North-Korea-news-nuclear-war-deepest-subway-Trump-USA-Guam

  • Dutchlander

    From Europe: can we stay out of this please?

    • Tomcat

      I guess Germany was right to say WE ARE ON OUR OWN NOW.

    • Ross

      From Kansas: can we stay out of this please?

      • Tomcat

        NO middle America,, you brought us to the dance, now dance dammit.

        • Silver Badger

          How about us in Colorado? We were with her.

          • Tomcat

            Stay high Colorado, stay high.

        • The_Wretched

          This is brought to you by the people who have power and set up the system. Many of those same oligarchs are in charge of the finance sector. If I can draw the lines, I can pick who wins

          https://en.wikipedia.org/wiki/Gerrymandering

          And there was more election screwing than just gerrymandering.

          • boatboy_srq

            A nuked population will be too busy trying to survive to figure out where to go vote.

            /s

      • darren lyle

        No, Especially not Kansas. You are directly responsible for this.

        • JCF

          …but Blue voters there deserve their own personal bunkers.

      • JCF

        From California: F’REALZ, can WE stay out of this please? [As NK—and China’s!—closest mainland target. With the largest Hillary vote!]

  • Butch

    I wish people would keep in mind that the Trump administration is the direct and deliberate cause of this “crisis” by releasing a very thinly backed intelligence conclusion that was reached by only one agency.
    And meanwhile, India and China are at the brink of war over a border dispute, but I guess that isn’t important, because we don’t hear a thing about it.

    • boatboy_srq

      It’s a dispute between Those Other People® in Those Other Countries®, so of course the US knows nothing about it.

  • Mark McGovern

    It strikes me that we have become so desensitized by the Trump debacle that we are now so casually discussing the implications of the potential upcoming nuclear war. Should we not be marching on the streets or something?

    • Silver Badger

      Would it do any good?

      • Mark McGovern

        Perhaps, if there was a massive movement. We are talking about the potential destruction of the planet, should China and Russia get involved.

        • Silver Badger

          You may be right. Unfortunately, we are so divided that there is a real chance that the right wing would open fire on the left.

    • Stephen Elliot Phillips

      we only march in the streets when the new Iphone is introduced for sale…

    • Tomcat

      March back and forth inside your bunkers.

    • Tomcat

      I blame it on video games and movies. People think they will survive anything because it is so in video games and movies.

      • Amanda B. Rekendwith

        Damn RESET button.

      • Tulle Christensen

        you mean i can’t just load my last save if I die?

        • Scott Fitler

          We’ll just set the difficulty to easy until we beat this next boss and then it’s back to insane.

        • Tomcat

          Yeah, don’t worry you will still be able to just do that.
          Keep playing.

    • BobSF_94117

      I was wondering about this on my dog walk yesterday. If we truly expect the worst, why aren’t we stocking up on food and supplies? I assume some people are. I mean besides those who are perpetually stocked up or those who still have a storehouse of canned beans to stave off Obama’s apocalypse that never materialized.

      Anyway, in a worst-case scenario, I think most would rather die. But in a medium case, what to do? Stock up on duct tape, canned foods, water, and fuel? Just so some less prudent 2nd-amendment types can show up and take it all? I don’t know. I’m thinking maybe I can muster the, uh, enthusiasm for a stop at the vet to pick up a boat load of horse tranquilizer for me and the fur kids. I hope she’s not out of them.

      • Niblet58

        Why bother? Who would WANT to live in the wasteland?

      • I am not stocking up because I DO NOT WANT to “survive” a nuclear war.

        • we’re walking towards the blast zone, hand in hand, if it comes to that. partner and i agree it’s the only choice.

          that said, meh. i think a lot of us realize that the adult nations in the room, and a goodly portion of the US military, will not allow the traitor to start a nuclear war. this is more distraction, working well to keep people from focusing on the serious and long lasting damage all the rethug grifters are doing while everyone is freaking out about NK and nukes. the Chinese alone can and will put a stop to any attempts to bomb NK with nukes. remember: they own all our debt. they have no interest in being downwind from fallout radiation, either.

          • Karl Dubhe

            My knuckles are bleeding from the knocking on wood they’ve been doing. 🙂

        • Tomcat

          I am with you Mark. Me and my dogs will be taking the easy way out with carbon monoxide in our sleep.
          But not until time for that.

          • Snarkaholic

            I have No Interest in offing myself but, if we do get nuked, does carbon monoxide make you choke? Would pills be a good way to go? I’ve heard that bleeding out is pleasant, but I don’t know if I’d have the guts to open my veins.

      • TuuxKabin

        To stocking up on supplies: to what end?

        To a stash of horse tranquilizers for us and our furries, what to wash it down with . . . ?

    • Buford

      Remember the ‘problem’ of Obama wearing that tan suit and mom jeans…?

  • Skeptical_Inquirer

    A huge part of the problem is that even now, AMERICANS still seem to enjoy blowing up other countries and going to war. Why the fuck do polls get a bump UP instead of down? And if the alt-right bitched about bombing a Syrian airstrip, why aren’t they raising cane about this?

    • BobSF_94117

      Something about having to rally around our moron.

  • Xiao Ai: The Social Gadfly

    Dear Jina, Soviets, etc,…

    Please aim for Wall Street in a first strike.

    ‘Kay, thanks

    • billbear1961

      WELL SAID!!

  • Droz

    Did anyone else read that headline to the tune of, “How do you solve a problem like Maria?”

    • boatboy_srq

      Apparently WSJ are fans of R&H. Now, if they could just come to grips with precisely WHY the von Trapps fled Austria….

      • JCF

        Points!

  • BobSF_94117

    Won’t someone think of the money?

  • bambinoitaliano

    Isn’t that a conundrum for those billionaires who invested in that shit gibbon to accumulate their wealth. Gain a billion here and lose a billion there. Must be losing their sleeps which side of the scale they gonna tip.

  • Jonathan Smith
  • liondon#iamnotatraitor

    Clean water is the currency in Barter Town.

  • Buford

    What this tells me is that Trump is incompetent on effectively EVERY level. Jesus Christ… being incompetent as a diplomat and a leader is one thing, but he was supposed to be a legitimate businessman, at least. Instead, we’re seeing his insecurities push his ego to spout nonsensical threats and insults that have a direct impact on the world economy.

    Trump is literally insane. He has to go.

    • boatboy_srq

      There’s a not-insignificant portion of the electorate that actually wanted incompetence. That’s really the only explanation for Carson and Fiorina as well as for Lord Dampnut.

  • The_Wretched

    I wonder if this will wake the financial sector. They really don’t like uncertainty and playing footsie with nuclear war is not a risk they are used to worrying about.

  • Harveyrabbit

    In the event of a nuclear holocaust Wall Street’s computers will take over the stock market.

    https://uploads.disquscdn.com/images/14a640e0694c2389d8e5f2db718123eb5f326cbd7277a0f39d0ccd8775ed5750.png

  • BobSF_94117

    Hmmm… snow shovel futures up?

  • “How can we monetize the destruction of civilization?”

  • Gerry Fisher

    I have such intensely mixed feelings when I look at my IRA statements. On the one hand, my bear and I need our retirement money. On the other hand, the stock market has seemed *thrilled* about our last election. Yippy?!! You guys really think he’s good for business?!

    • Tomcat

      Only until he isn’t!!!!!

    • Treant

      According to my investment dude, the market is actually reacting to the fact that they knew he’d be boondoggled by Congress from the get-go, and continues to be locked down.

  • Bluto
    • Tomcat

      Only he can stop peace. And keep it at bay.

  • Tomcat

    Election 2016 Trump says only I can fix things.
    He told the truth.

    • Uncle Mark

      Yep, we’re all in quite a fix. Thanks Shitgibbon

  • billbear1961

    LISTEN to these people–what PLANET are they living on?!

    Prevail? No one will if a nuclear war is unleashed!!

    A 20% falloff?!

    Millions would die, and all they can do is count MONEY!!

    You’ll be counting the minutes you have left to LIVE, you SOCIOPATHS!!

    • Uncle Mark

      These sociopaths expect to live somehow, because they believe they’re smarter than the rest of us, who are burdened and constrained by decency, empathy, and morality. While we are shocked & horrified at the sight of a holocaust, they’re investing in the coffin manufacturing sector.

      • billbear1961

        “Now I am become death, the destroyer of worlds.”

        God ROT them, Uncle M!

  • JWC

    oh my profit from death thats even a novel concept for Trump

  • Treant

    It seems a bit…optimistic in the extreme…to be worrying about your finances in the case of wholesale nuclear bombing.

    It’s along the lines of, “Do you think the nuking of Rochester, NY will impact the quality of next year’s rhubarb crop there?” Yes, of course it’s going to fucking impact the “quality” because there probably won’t be a crop, nor people to plant it.

  • GayOldLady

    Like anyone gives a big goddamned what happens on Wall Street if the U.S. launches a nuclear war!!!

  • boatboy_srq

    Sounds to me like the pencil-pushers are actually pretty sanguine about the potential global conflagration because they think the Dot-Bomb and the Great Recession were each worse events for investors. A 20% correction is about what those two economic events triggered when they hit.

    Think about that. A ten year sale of vaporware which took investors all that time to wise up to, and a massive speclation run on questionable investment products based on shaky consumer mortgages enabled by huge regulation repeals, are perceived by these idiots as equivalent to global thermonuclear war.

  • Chris Gardner

    To look at silver lining, the funeral industry would see a huge surge in business! Trump coffins for everyone! /s

  • leastyebejudged

    Just hope it never proves to be profitable.

  • Danieruw