Nuclear war with North Korea may be imminent. But the stock market seems relatively stable. Alex Tabarrok had some thoughts on why:

• If investors think IBM’s stock will fall they can sell, and then buy one of the multitude of other more promising stocks.
• In a nuclear war though all stocks will crash, so there’s not much point in buying shares in other companies. Or even in holding onto cash.
• Rational investors may still choose to sell out of the market and blow their cash on drugs and sex workers if they think the end of the world is near.
• But perhaps that’s just a bad caricature of humanity. Many would prefer to go for a walk in the woods or spend more time with their family.
• And anyway, marginal benefit falls. The first line of Armageddon fueled coke may be pleasurable. The second a little less so. After a while there’s only so much fun people can have with their money.
• All this means that the markets are probably poor predictors of nuclear war.

Read the entire fascinating argument on Marginal Revolution here.