Today's Sell-off and UNSCR Jude Wanniski November 7, 2002

The market sell off today is directly tied to the last-minute negotiations over the United Nations Security Council Resolution, which goes to an up or down vote tomorrow. President Bush`s press conference did not help, as he was more bellicose than I had ever seen him on the subject of Iraq and Saddam Hussein. The DJIA was off 125 when his press conference began, I believe because the market saw the problems at the UN in coming to terms with the U.S. draft resolution, but it collapsed after the President indicated he will take no prisoners!

The President still has several strands of logic running around in his head, coming from those he sees on a daily basis. The Iraqis were thrilled when he said Monday that he would respect Iraq`s sovereignty, a strand coming from State, but there was none of that today. Saddam was a rapist and murderer who gassed his own people!! A few inspectors are NOT GOING TO SOLVE THE PROBLEM!! But then, he wants the problem solved without war. A plate of spaghetti. Still, at bottom, the election victory clearly has him thinking he is King of the Mountain.

My best estimate, though, is that there will be enough nibbling away at the resolution before it comes to a vote so that it will work, and let the inspectors back in. The louder the President barks now, the more he will be able to take credit for Baghdad compliance in treating the Blix team with kid gloves. Here is an internet comment from Denis Halliday, the British diplomat who ran the food-for-oil program for the UN and who is now more or less in the Scott Ritter view of the situation. This appeared on an antiwar website:

DENIS HALLIDAY
Halliday is a former UN Assistant Secretary General and headed the UN`s food-for-oil program in Iraq. Available for limited interviews, Halliday said today: "Even if the Iraqis wanted to comply -- and it`s not clear to me that they do -- I doubt that they could comply with this resolution. It has components that are simply geared toward Mr. Bush`s war. If the Iraqis close the door on an inspector in a bike shop at 3 in the morning, that could be used as a pretext, as being in `material breach,` for war. It`s likely that at some point [the U.S.`s UN ambassador John] Negroponte will use confused wording to argue that Iraq is in material breach and the U.S. will say one thing and the rest of the world another. Many paragraphs of this new resolution are simply dripping with double standards -- much in this resolution should apply to all states in the region violating Security Council resolutions and possessing weapons of mass destruction. Whether or not Iraq complies, it is a country under threat and has a right to defend itself."