It’s no front-page news that Iraq is a dangerous place. But a capital magnet? The presses have stopped for less. According to the not-quite-closed record book for 2007, Iraqi sovereign bonds, the Iraqi currency, and the Iraqi stock market have each logged astounding, not to mention politically provocative, gains.
Not many would have predicted that Iraq’s long-dated, dollar-denominated debt would have proven a safe haven during a worldwide credit crisis. But the 5.8s of 2038 did just that. Since the subprime mortgage meltdown began in August, these evidences of indebtedness of the government in Baghdad have gained no less than 18.3%.
Interesting. I seem to recall someone arguing last summer that the surge wasn’t working, based on the performance of Iraqi financial instruments. I wonder if they’ll revisit that argument now.