The official bounty for Osama bin Laden’s capture of $25m proved insufficient for associates to betray him during a decade as the world’s most wanted man. Perhaps the US government could have saved itself time and effort by offering something more akin to a market price, which is closer to $75bn judging by the financial world’s initial reaction to his death.
Equity futures jumped and oil prices fell late on Sunday, moderating by morning. Even with the more restrained half a per cent opening gain in the S&P 500, though, owners of US equities were about $70bn richer. And if the initial $1.75-a- barrel drop in crude futures could be sustained for just a month – WTI rebounded later – global energy consumers would be about $5bn better off.
The fact that these dollar figures are nearly identical to those on 15 December 2003, the Monday morning after Saddam Hussein was captured, suggests that traders buy or sell on headlines and ask questions later. If killing the terrorist mastermind does as little to hamper al-Qaeda’s activities as Mr Hussein’s capture did to quell the Sunni insurgency, then the ultimate impact will be fleeting or even negative. Indeed, equities shed all of their gains by the end of the day after his capture.