Many commentators, notably Jim Cramer, have made an analogy between our current situation and that obtaining prior to the Gulf war. In their view, we will win the war in a cakewalk and the outbreak of hostilities will be bullish because it will signal the end of the uncertainty. Today's rally on the back of Colin Powell's speech to the UN seems to substantiate this view. I have serious doubts about all this. First, as noted by Bill Fleckenstein and others, war will not change the current dismal state of corporate profits and visibility. Spending billions of dollars on bombs and jet fuel seems unlikely to help the overall economy, and the resultant budget deficits give big government pol's an excuse to keep taxes high. Second and more serious, it seems to me that the current situation and the pre-Gulf war situation are vastly different. In '91, Iraq had seized Kuwait, giving it control over a massive amount of oil, plus it was poised to take the Saudi oil fields in the Eastern Province of Saudi Arabia, which would have given Iraq a stranglehold on world oil supply and massive revenues to build its military. We faced a dire threat, and the stock and oil markets reflected that fact. When the threat was removed, it was logical that they would respond as they did, although the timing may have surprised many. Today, the threat is more theoretical. Iraq is dangerous but does not pose an immediate threat to world oil supplies. Indeed, it would like to sell more oil. Removing Saddam perhaps lowers the tension level and may well prevent future horrors. It is at best however an incremental improvement, and we have no way of knowing what the aftereffects may be. Under the circumstances I feel those expecting a replay of the Gulf war rally may be disappointed.