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Joe Barbieri has Bachelors' degrees in both Civil Engineering and Commerce from the University of Toronto. He has worked in the Financial Services field for over 13 years, with over 10 years on the institutional side of the business. He has covered positions from Fund Accounting to Investment... More
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  • The War In Syria Is Being Fought On Multiple Fronts 0 comments
    Sep 11, 2013 9:37 AM

    There has been a remarkable shift in the whole situation regarding Syria. If you go back to when this issue was first announced in the media, most of the stances were hardline and antagonistic. Assad was portrayed as a bully with chemical weapons that had to be invaded at all costs. (4)(2) Now there is a somewhat different tone of dialogue and co-operation with an apparent deal between Syria and Russia calling for Assad to destroy the chemical weapons. (6)

    What does this have to do with finance? Economics and politics are very closely related, and politics tends to drive much of the decision and sentiment that feeds into the apparent "trends" that seem to surface at random. Trends, like everything else are not random, but are nurtured and influenced by the interests with the best ability to persuade. In the past, when war was announced, the economies had a certain pattern of responses: market corrections where there was invasion, scarcity amplified in areas like oil and commodities, booms for defense and weapons companies, and contracts for financing of these events. There is also the aftermath of reconstruction, which also affects commodities, finance and companies dealing with professional expertise.

    What is happening now is that the influence behind these trends is beginning to shift. Unilateral invasions are not seen as a given. President Obama went to congress for approval on whether to go to war or not. (3)(5) That is the first time in many years that this has happened. In the UK, parliament voted against the Prime Minister on the same issue, which is quite rare.(1) There is much skepticism about what is paraded as fact, and much more contemplation about the after effects of a decision by the general public. The battle in Syria is not just about governments negotiating whether weapons should be used or not. This battle is also for the hearts and minds of the general public and what kind of support they are willing to offer. It is this kind of support or lack of it that will determine the outcome.

    Sources:

    1) http://www.bbc.co.uk/news/uk-politics-23892783

    2) http://www.cnn.com/2013/08/29/world/europe/syria-civil-war/index.html

    3) http://usnews.nbcnews.com/_news/2013/09/09/20407499-obama-on-the-fence-about-syria-strike-without-congress-approval?lite

    4) http://www.theguardian.com/world/2013/sep/09/us-syria-chemical-weapons-attack-john-kerry

    5) http://www.theguardian.com/world/2013/aug/31/syrian-air-strikes-obama-congress

    6) http://www.reuters.com/article/2013/09/09/us-syria-crisis-idUSBRE9880HY20130909

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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