Monday, September 11, 2006

A Walk Along the Third Rail

Religion and politics are two topics to steer clear of if you're hosting a social gathering (or a financial blog!). There are just some third-rail topics where, if you stake out any position, you're going to be open to potshots. It's why the immigration topic has proven so contentious, along with the reform of Social Security and health care. Of course, some people have figured out that you can get a lot of attention by walking along the third rail and staking out positions guaranteed to offend people. From Ann Coulter on the right to Michael Moore on the left, the third rail has become a way of life.

The majority of us are finding it increasingly difficult to steer clear of the third rails, given the commingling of religion and politics. On this 9/11 anniversary, Michael Moore pictures bin Laden and asks us to love enemies and forgive trespasses. The Obsession movie, on the other hand, anticipates calamities far worse than 9/11 if we do not take the Islamic enemy seriously. Do we begin the pull out of Iraq, or do we commit further resources toward the "War Against Terrorism"? Is there truly a "War Against Terrorism" out there, or is it a war against Western occupation?

Sometimes markets shed light on issues. Eddy Elfenbein of Crossing Wall Street notes the superior performance of defense stocks and asks if defense might be the NASDAQ of the decade. He notes that defense stocks sold off in advance of the end of the Vietnam War and ahead of the fall of the Berlin Wall, anticipating an end to hostilities. Today, the anticipation seems to be much different. Elfenbein suggests that this means that we might be in Iraq for a while.

Maybe. I suspect that a continuation of our presence in Iraq would be sufficient to keep defense stocks at lofty levels. I'm not sure it's enough to keep powering them higher. No, I think--and here's that third rail--that perhaps the markets are anticipating an escalation of hostilities.

Let's give the conservative leadership the benefit of the doubt for a minute and assume that they truly believe what they say. They believe that Islamic fundamentalism represents a potent threat to Western civilization. They believe that World War III has already begun--a war that is every bit as important to freedom as the previous world conflict.

What do you do if your watch is coming to an end and you deeply believe that the future is at stake if you do not act?

Father Thomas Berg recognizes the gravity of the issue and asks who we can trust for guidance. Perhaps our leadership asks the same questions.

And the markets reflect their answers.


yinTrader said...

Hi Brett

Again you are timely in bringing up ' a Walk along the Third Rail' as it also brings up the question of the right of Activists to protest during the IMF/World Bank summit in Singapore starting this week.

Quote from Straits Times Forum page on Sep 12 2006:
For Singapore as a brand, its 'strict, no-nonsense reputation' could actually be positive. Which are the target groups that Singapore wants to attract? Mainly two: tourists and foreign talents.

Tourists want a safe and clean environment, beautiful scenery (which the TV pictures from the conference will show), good food, great bargains and a wide choice of goods. They want stunning beaches and to be welcomed by smiling, caring and courteous Singaporeans.

Foreign talents want job opportunities, as little red tape as possible, low taxes, great entertainment, good food, a superb transportation infrastructure - and all in a safe and clean environment.

So if in articles about the IMF/World Bank meetings the brand Singapore comes across as a place that is safe and where work and play are not endangered by violent demonstrations (but where activists are instead given a designated air-conditioned space), then this would be an attractive part of the brand positioning that we need to attract the target groups we want.

Keeping out terrorism is a serious business in Singapore!

Brett Steenbarger, Ph.D. said...

Hi Yin,

The idea of positioning a country as a brand and controlling protest to protect the brand image is truly scary. Violent protest and terrorism are different from open, public freedom of speech, IMO.


yinTrader said...

Hi Brett

We cannot take chances with the tight security that our government owes to the delegages to designate a special indoor airconditioned hall for activists to protest.

After all, the IMF should have addressed their problems without their having to make a show of protests at such summits.

It is very easy for terrorists to filter into open air protests whereas in an indoor venue, all will be strictly screened.

NO DooDahs said...

What most people think of as "opposites," i.e., "right" and "left," are actually small deviations inside a narrow band of allowable public discourse. The games of "right" and "left" are the bread and circuses of our time. True political discourse ranges far beyond that narrow band. Ann and Michael agree with each other way more than either agrees with me.

These discussions are contentious precisely because they aren't discussions - for some reason the reptile brain takes over, people identify with their belief system, and they see respond emotionally as if they themselves were attacked, instead of responding rationally and intelligently.

Brett Steenbarger, Ph.D. said...

Thanks for the note. I would agree: to the extent that the political right and left embody different forms of statism, they are closer than most people realize. Thanks for the note.