An appetite for risk
"Our commitment to democratic progress is being honored in Afghanistan. That country is building a democracy that reflects Afghan traditions and history, and shows the way for other nations in the region." President George W. Bush, Concert Noble, Brussels, Belgium, February 21, 2005.
On September 11, 2001 two commercial jets crashed into the twin towers of the World Trade Center in New York City. Another jet crashed into the Pentagon and a fourth went down in a field while heading for Washington. The total death toll amounted to 2,992, which included the hijackers. An Islamic al-Qaeda terrorist group was blamed with Osama bin Laden as its head.
Within days American troops were dispatched to southwest Asia and countries surrounding Afghanistan. Operation Infinite Justice (renamed Operation Enduring Freedom) commenced on October 7, 2001 when a mix of air strikes from land-based B-1, B-2 and B-52 bombers, carrier-based F-14 and F/A-18 fighters, and Tomahawk cruise missiles began to devastate a country without the means to defend itself from airborne attacks.
Wild goose chase
Osama bin Laden escaped. Army intelligence had him holed up in Tora Bora, a seemingly impregnable high-tech fortress containing hydroelectric power plants, brick-lined walls and areas large enough to drive armored tanks through and even weapons of mass destruction. When it was captured on December 11 this location vanished from the headlines for it turned out to be a low-tech army training camp within a natural cave complex.
The war lasted 78 days and on December 22, 2001 an interim government in Afghanistan, under the protection of Uncle Sam, was inaugurated.
50 days
On Wednesday, March 19, 2003, at 22:15 EST President George W. Bush announced the start of Operation Iraqi Freedom. Three hours before the announcement he ordered a "decapitation" attack on the Iraqi leadership. Intelligence information led him to believe that Saddam was hiding in an even larger complex than Osama bin Laden and built by German engineers. Two F-117s struck the suspected bunker at 21:30 EST with four 2,000 lb bombs. Saddam escaped. The ground war started on March 20 and was such an unqualified success that President George W. Bush declared the end of hostilities on May 1, 2003. The official war lasted for only 50 days.
Aftermath
Saddam Hussein was captured in Tikrit on December 14, 2003. He was in a 'spider hole' dug into the ground beneath a mud hut. It was about two meters deep, with just enough room for him to lie down at the bottom, and the entrance was camouflaged with bricks and dirt. Needless to say, no weapons of mass destruction were found.
On March 11, 2004, close to the anniversary of the start of the invasion of Iraq, 10 terrorist bombs exploded almost simultaneously during the morning rush hour in Madrid, killing 202 and injuring more than 1,400.
Optimism prevails
As we all know, markets hate uncertainty. They thrive when things are going according to plan. It is then that optimism prevails. The matrix of terrorist cells-alleged to be allied to bin Laden but more extreme than him-that planned mayhem across the world seems to have been held in check thanks to the respective intelligence services. The vast majority of terrorist attacks against foreigners have occurred in Muslim countries. Apart from Madrid, not one plane, electricity pylon, nuclear facility, water supply or casualty has been the result of terrorist action in the US or in Europe since 9/11.
Afghanistan has reverted to its traditions and history. In order to maintain peace and stability only 32 tonnes of opium poppies out of an annual harvest of some 4,000 tonnes have been seized or destroyed since the fall of the Taliban more than three years ago. The warlords are still in charge and the opium economy forms 38.2 percent of the country's official GDP. A UN report published earlier this month ranked Afghanistan 173 out of 178 countries covered by a human development index and called its educational system the worst in the world.
Rule of law
In Iraq, democracy now rules. After the American version of liberation, Fallujah has become the most peaceful city in the country. It will soon be followed by Ramadi after Operation River Blitz gets underway. Unfortunately, the onset of riots in the US-run detention camps are causing slight problems.
And as the war on terror steps up another gear with no apparent adverse consequences, the appetite for risk in investments increases further.
EmergingPortfolio.com, a Boston-based research company, revealed that emerging market stock funds had their largest inflow of money in at least five years as investors shifted out of the US to tap share price gains in nations such as Turkey and Poland. The funds attracted a net $1.33 (zł.3.97) billion, the most since it began compiling weekly data in 2000. The timing couldn't have been better.
A large proportion of funds appeared a few days before President George W. Bush arrived in Europe on his recruiting drive. It would appear that the US Army is experiencing problems finding enough volunteers to fill its ranks with replacements, let alone the 40,000 new troops required to add to divisions for overseas tours. Once the US needed help, Bush knew that he could count on additional Polish troops, as they assisted in the vandalization of the remains of Babylon and some were amply rewarded. But he required more.
Unfortunately, once it became public knowledge that France had decided to contribute by sending just one of their best officers to train Iraqis, the dollar plummeted and the DJIA plunged 174.02 points, or 1.6 percent. It was the market barometer's biggest loss in points since May 19, 2003.
Perhaps the euphoria has now peaked.
On September 11, 2001 two commercial jets crashed into the twin towers of the World Trade Center in New York City. Another jet crashed into the Pentagon and a fourth went down in a field while heading for Washington. The total death toll amounted to 2,992, which included the hijackers. An Islamic al-Qaeda terrorist group was blamed with Osama bin Laden as its head.
Within days American troops were dispatched to southwest Asia and countries surrounding Afghanistan. Operation Infinite Justice (renamed Operation Enduring Freedom) commenced on October 7, 2001 when a mix of air strikes from land-based B-1, B-2 and B-52 bombers, carrier-based F-14 and F/A-18 fighters, and Tomahawk cruise missiles began to devastate a country without the means to defend itself from airborne attacks.
Wild goose chase
Osama bin Laden escaped. Army intelligence had him holed up in Tora Bora, a seemingly impregnable high-tech fortress containing hydroelectric power plants, brick-lined walls and areas large enough to drive armored tanks through and even weapons of mass destruction. When it was captured on December 11 this location vanished from the headlines for it turned out to be a low-tech army training camp within a natural cave complex.
The war lasted 78 days and on December 22, 2001 an interim government in Afghanistan, under the protection of Uncle Sam, was inaugurated.
50 days
On Wednesday, March 19, 2003, at 22:15 EST President George W. Bush announced the start of Operation Iraqi Freedom. Three hours before the announcement he ordered a "decapitation" attack on the Iraqi leadership. Intelligence information led him to believe that Saddam was hiding in an even larger complex than Osama bin Laden and built by German engineers. Two F-117s struck the suspected bunker at 21:30 EST with four 2,000 lb bombs. Saddam escaped. The ground war started on March 20 and was such an unqualified success that President George W. Bush declared the end of hostilities on May 1, 2003. The official war lasted for only 50 days.
Aftermath
Saddam Hussein was captured in Tikrit on December 14, 2003. He was in a 'spider hole' dug into the ground beneath a mud hut. It was about two meters deep, with just enough room for him to lie down at the bottom, and the entrance was camouflaged with bricks and dirt. Needless to say, no weapons of mass destruction were found.
On March 11, 2004, close to the anniversary of the start of the invasion of Iraq, 10 terrorist bombs exploded almost simultaneously during the morning rush hour in Madrid, killing 202 and injuring more than 1,400.
Optimism prevails
As we all know, markets hate uncertainty. They thrive when things are going according to plan. It is then that optimism prevails. The matrix of terrorist cells-alleged to be allied to bin Laden but more extreme than him-that planned mayhem across the world seems to have been held in check thanks to the respective intelligence services. The vast majority of terrorist attacks against foreigners have occurred in Muslim countries. Apart from Madrid, not one plane, electricity pylon, nuclear facility, water supply or casualty has been the result of terrorist action in the US or in Europe since 9/11.
Afghanistan has reverted to its traditions and history. In order to maintain peace and stability only 32 tonnes of opium poppies out of an annual harvest of some 4,000 tonnes have been seized or destroyed since the fall of the Taliban more than three years ago. The warlords are still in charge and the opium economy forms 38.2 percent of the country's official GDP. A UN report published earlier this month ranked Afghanistan 173 out of 178 countries covered by a human development index and called its educational system the worst in the world.
Rule of law
In Iraq, democracy now rules. After the American version of liberation, Fallujah has become the most peaceful city in the country. It will soon be followed by Ramadi after Operation River Blitz gets underway. Unfortunately, the onset of riots in the US-run detention camps are causing slight problems.
And as the war on terror steps up another gear with no apparent adverse consequences, the appetite for risk in investments increases further.
EmergingPortfolio.com, a Boston-based research company, revealed that emerging market stock funds had their largest inflow of money in at least five years as investors shifted out of the US to tap share price gains in nations such as Turkey and Poland. The funds attracted a net $1.33 (zł.3.97) billion, the most since it began compiling weekly data in 2000. The timing couldn't have been better.
A large proportion of funds appeared a few days before President George W. Bush arrived in Europe on his recruiting drive. It would appear that the US Army is experiencing problems finding enough volunteers to fill its ranks with replacements, let alone the 40,000 new troops required to add to divisions for overseas tours. Once the US needed help, Bush knew that he could count on additional Polish troops, as they assisted in the vandalization of the remains of Babylon and some were amply rewarded. But he required more.
Unfortunately, once it became public knowledge that France had decided to contribute by sending just one of their best officers to train Iraqis, the dollar plummeted and the DJIA plunged 174.02 points, or 1.6 percent. It was the market barometer's biggest loss in points since May 19, 2003.
Perhaps the euphoria has now peaked.
