“The betting on TradeSports Exchange Ltd., an Internet site based in Dublin, is that there is an 80 percent chance that Saddam Hussein will be ousted as Iraq’s leader by the end of June, a 63 percent chance by the end of April and a 37 percent chance by the end of next month, when a lot of analysts think a war will begin,” writes Jonathan Fuerbringer in today’s Wall Street Journal.

“The odds for a March departure are up from around 27 percent in early November but down from almost 49 percent around Christmas. The June odds have been on the rise since November and popped over 80 percent earlier this month.”

“While these are not big bets that war speculators are making — it costs $75 to buy 10 contracts betting Mr. Hussein will be gone by the end of June — they mean that it is not a bad time to consider after-the-war thoughts.”

“The first place to look for guidance, of course, is the Persian Gulf war, which began in January 1991. A look back shows that two of the big market moves after this war — if it does happen — would be drops in the prices of gold and oil.”

“Gold hit $418.10 an ounce on Aug. 24, 1990, three weeks after the Iraqi invasion of Kuwait, fell and then worked its way back to $404.50 on Jan. 16, 1991, the day before the air war began. By February, when the ground war began, gold was down to $358.30 an ounce; it went as low as $345.10 in September and finished the year at $355.20. From the August high there was a 17.5 percent fall to the September low.”

“Oil starting surging on the report of the Iraqi invasion, reaching $40.42 a barrel on Oct. 11. It fell and then bounced back to $32 a barrel on the day before the war began. Then it plunged, reaching $17.91 in February, before rallying a little to end the year at $19.12 a barrel. From the October peak, oil fell 55.7 percent to its February low.”

“But it is likely that gold, which closed at $363 an ounce on Tuesday, and oil, which ended at $35.44 a barrel, will perform differently this time because the aftermath of a war — even with a quick victory led by the United States — will be different than in 1991.”