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Market's Know Freedom Isn't Free

September 13, 2002

One year after . . . America's second 'Day of Infamy' tragically cut-short the lives of so many innocent Americans; many of whom were in the financial or travel industries, the Nation is coping, if still traumatized, by the unimaginable horror of it all. Some, as a result of their beliefs and faith in humanity, have even tried to find some meaning or understand the basis of hatred that spawned such inhumanity-to-man, but they've not succeeded, unless to discover 'truths' that defy efforts to exploit perceived causes.

In fact, dehumanizing the perpetrators of evil is not too severe; because brainwashed followers of demagogues through history have rarely seen-the-light of civility or much less 'tolerance' for other peoples, unless their leaders were eliminated from the scene in ways that not only discredited the perverse 'doctrinaire' hatefulness they harbored, but allowed an environment in which most humans (even followers of the evil-doers) could gradually grasp the horrors they had wrought, and somehow embraced a future of more-normal concerns about their loved-ones futures, and new understanding of a world that is diverse, not theocratic. Theocracies have invariably caused world stress.

The point is to dispute ideas that the enemies of humanity will never be vanquished in our lifetimes. Their perverse views of life may percolate subversively beneath the surface for years, but the effectiveness of their zeal translated into hostile warfare to peoples of freewill around the world, may ebb and eventually end. This is a lesson of history, and one that should reinforce the concerns of today's young, who frequently either don't get it (by trying to figure out with thoughts of compassion why 'they' hate us so much), or fear that we're bequeathed an eternal combat for many generations.

The world will not return to what passed-for-normal before a year ago, nor was it the kind of calm most thought it was before that; neither in the markets, nor the society in a broader perspective. But many people were oblivious or complacent to matters; so they lived in a wistful bliss that basically cannot return in the immediate future, not will it ever quite be that way for all generations living with the memories of 9-11 inscribed in their psyches forever. But we go on; and we shall not only survive, but prevail. So it must be, so it has to be for the sake of humankind, and that's not an overstatement.

Tonight, this Daily Briefing is abbreviated to remember those who gave so much for a world of diversity, life-choice and economic freedom. Our remembrances focus surely on the victims, not the perpetrators, while recognizing there is a lurking threat behind all environments on the short-term, and a long road before the promoters of real evil are finally discarded from this particular era of modernity (hopefully most already are, but nobody is certain about that). We grieve for the real heroes; the rescue personnel of course, many regular and varied office workers, the aircraft crews and passengers, including a heroic American Airlines pilot well known to us, the nearby residents who still struggle with the airborne contaminants aftermath of the debacle, and the unsung heroes, like the retired Bostonian Israeli-trained antiterrorist officer, who was shot by the terrorists on Flight 11 (officials deny that's what happened, but it probably was), or the legions of airline employees and air-traffic controllers who fought to ground all the aircraft that day, and still are slightly leery about every new day and every flight.

As the United States effectively enters year-two of a war declared against it (but for the most part ignored) many years ago, we must remain unified in spirit and purpose behind the leadership, while questioning in the way that is so traditionally American. Evidences of the ongoing (and even escalating) war are visible in the backdrop today as the CENCOM (Central Command) HQ quietly moves, today, from Tampa to newer quarters (for the moment) in the Persian Gulf. And yes, that can be seen as an omen.

So can the ramped-up loading of heavy armor on the East Coast (reserved comment, as well as discussion of power-brokerage in the future if certain events evolve).

We're not advocating one policy or another; just speculating about what may be afoot in the reasonable future. In a discussion of these matters last night, the stately NBC reporter Andrea Mitchell responded to a query about whether such action might be the stuff of which banana republics are more akin to considering. Well, she said this: oil is worth a lot more than bananas. One might be tempted to dismiss any or all such comments from a reporter, no matter how established, except for a subtle detail we can't overlook; who she is married to. Alan Greenspan. Do they know something?

Of course it's not so simple as saying the market's already 'discounted' terror threats, though they had to an extend as my brief comment on PBS the other night reiterated. There's no certain way of realistically evaluating the amount of financial risk versus physical risks, without knowing what the enemy might target. Expect to see Chairman Greenspan testify to a House Committee, regarding economic prospects, and maybe necessary stimulus; against a backdrop of lingering concerns. (Balance reserved.)

In summary . . an uneasy calm continues to prevail, with some fade not unrealistic in price levels, after the September S&P reached and surpassed our reasonable goals for this most recent snapback early Wednesday. As it went above (noted) resistance, following yesterday's close at 911, profit-taking was sort of invited. We did not want to get too-involved in this memorial-dominated session, but a hotline's (900.933.GENE or direct-dial access) determination to short the opening action at the 924 level. The December S&P becomes the new front-month contract effective Thursday morning.

Of course much remains sensitive not only on the Chairman's remarks, but events. It can be said that the trading week really starts Thursday, but that's not quite so, due to technical fulfillments being entirely completed with the opening on 9-11 itself, as it turns out. So, the snapback might be just that if it occurs, then lower levels preceding a defensive weekend, some downside probing, and then (reserved) for next week.

In the meantime, recognize that it would be perfectly normal human nature (and fully justified) for today's sense of grieving, amidst a roll-call of those lost to the barbarians that took hours, and which may really have brought-home the immensity of it all, to at least a few skeptics, if not the many we suspect, to turn to a more-gritty determination once again, as it should. The enemy considers no solace, does not value human life (not because of being dehumanized, but possibly because they are indoctrinated with a perception of the hereafter as a physical reality, not an abstract presence), and isn't likely to respond to 'understanding', forgiveness, or the normal interrelationships that characterize modern thought. That may change, but it will take many years and likely a generation of education. knows how important to the world and very many market-forces it is, that the forces of modernity prevail over those of antiquity.

In the interim, the civilized peoples of this World (including all major faiths, particularly Islam) better resign themselves to continued efforts to cause slippage in the forces of evil from the Middle Ages, that somehow found traction in modern times, and that in so many cases were allowed to flourish because of the neglect of their peers and the dismissal of horrendously backward trends that a majority of rulers there placated for so long, instead of confronting. In a sense rather than looking outward for scapegoats to blame their woes on in that part of the world, that neglect of modernity, or teaching of tolerance and respect, was sort of a Munich of the Islamic World within their realm. It proves once again (sadly) that appeasement does not work; enlightenment does.

What will be needed (if we were to sort of bio-engineer it), is the human equivalent of a 'limited slip' control, and in today's world that's the responsibility of the military, until intellectual stabilization might be established from a long-term perspective. Until then the differential still leaves the world on unsound footing, and that is why, just as in the one-year Anniversary of Pearl Harbor back in 1942, the objective simply has to target the vanquishing, not coddling, of the enemies, until they are completely neutralized. If anyone thinks this is too conservative, just check the vitriol they profess, and one will discover that the enemy views things in an 'us or them' perspective. So, we must win.

Please join us in the first 'Patriot Day' salute to those who continue to risk their lives protecting us all, and on this special day to sincerely honor those who have served so courageously. Let's especially pay tribute to the victims and families in our Land, who suffered so much, and let it subtly remind us again, that the cost of freedom isn't free.

Goldschläger and Goldwasser are liqueurs containing pure gold flakes.
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