Iraq War – Did the U.S. jump the gun?

On March 20, 2003, operation Iraqi freedom began as the brain child of President George W. Bush. As if the “War on Terror” was not enough, the US needed to enhance its presence in the Middle East. In many respects, the “War on Terror” by and large, made sense and was very justifiable. The US was attacked, in one of the worst terror attacks of all time, and had to go after Osama Bin Laden. There was a sound reason to fight a war. But, when it came to the Iraq war, if the government had been more transparent in their goals, they would have been able to achieve more success and possibly more support from the realists of the world.

There were never any weapons of mass destruction in Iraq. The UN couldn't find any pre invasion so there was not much of a surprise the US came up empty handed as well. The Iraq War was fought to help protect oil interests and attempt to finally finish off Saddam Hussein. Now, if the US came out with these goals early they could have been much more effective in their attempts to protect oil refineries. Instead, the troops overstayed their welcome, continued to aggravate Islamic extremists and pacifists alike, while wasting Trillions of dollars. Still, the worst cost of war came to the soldiers who came back without limbs due to the IEDs. The US has had to welcome home veterans plagued with PTSD and physical problems that will follow them for the rest of their lives. The least the US government could have done was to at least be honest in their intentions.

When troops were finally pulled from the new commander and chief, Barack Obama, he received criticism from the left and right alike. Critics felt the government was not strong enough to sustain itself and any progress made would have been lost completely. News flash: if the US stayed for another 10 years the government would not have been strong enough to sustain itself. Attempting to implement democracy in the Middle East is like trying to get a vegetarian to try a turkey burger. Democracy will not be successful because the region as a whole is unstable. Unless the US could somehow broker a peace deal between Sunnis and Shiite, the Iraqi government will be far from democratically sound.

More than 10 years later, the US is actually presented with a reason to use military forces to intervene in Iraq. The oil supply of Iraq is being threatened. Isis is going to take over Iraq as they continue to gain support throughout the region. The US needs to keep boots off the ground, and utilize drones to protect the oil supply. Oil prices will continue to spike as the levant continues to gain support. Although Iraq is only the 6^th largest exporter of oil to the US, prices will rise as uncertainty adds to the oil market in general. To compound issues further, Russia is now forcing the Ukraine to pre-pay for oil after contract disputes as well as territorial disputes between the countries unfold further.

As the conflict continues, who will be hit the hardest and who stands to profit? These are the questions that traders around the world will be trying to answer. Right now, TransCanada is looking pretty tempting. See below for highlights.

TRP Highlights

Yield 3.8%

Div 1.77

P/E (ttm as of 6/19/2014) 21.58

Beta .59

Dividend CAGR	7.57%
Required ROR	12%
Dividend 1 YR	2.065344
Model Price	46.60379

Using a basic dividend growth model, the model suggests the market has priced TRP at an equilibrium price based on dividend history. Still, the nice yield might not continue to add value to the stock performance when interest rates rise. But, until then this play looks poised to continue growing.

On a side note, things have really come full circle with Iraq. The situation has actually opened up a dialogue with Iran. Who would have thought it would take another international crisis for the two sides to have serious talks? Even though the idea that Iran and the US would form a partnership is extremely unlikely, it is promising for US relations in the Middle East. As long as Iran continues to support Assad, the two will never see eye to eye.