Bathos Number 6: things truly changed today, again

Subject: things truly changed today, again
Date: Mon, 15 Oct 2001


I am stunned that the third in succession to the Presidency of the United
Sates and the Majority leader of the Senate suffered through a deliberate
assassination attempt this weekend and basically no one seems to find it
significantly altering of the current already weird environment.  The
reaction seems that this is interesting but we already had  a few before,
with the National Enquirer, Tom Brokaw, and the guys at Microsoft in Utah.
But to my knowledge, none of the previous anthrax targets were a personage
that requires a declaration of war if the origination of the anthrax is a
foreign entity.  Also, to my knowledge, unless someone believes the wackiest
Kennedy assassination theories, this is the first time in history a most
senior leader of the United States was targeted for assassination from a
foreign power or foreign group.  That the delivery was not deadly or that
the delivery mechanism was already known is really not the issue.  I have
mentioned before that the Constitution has become my roadmap, and looking
under Article I, the 12th Amendment, and the 25th Amendment, I can deduce
that the attack on Daschle is the most serious and heinous attack made in
the history of the United States by a foreign power or foreign entity.  As
far as dedicating the United States on certain course to war, then it is far
more serious than the WTC.  The WTC crisis means that politics and
coalitions building and diplomacy can take place and a dialogue ensues.  An
attack on the office to the  Senate Majority leader will require a
unilateral and  formal declaration of war.  I am amazed that because of
histrionics and damage and destruction that has so far occurred, this attack
on Daschle is being overlooked in terms of its importance and is perceived
as merely one of a series of similar attacks.  Once the constitutional
attack that this represents is realized, perhaps with a declaration of war
against Iraq (only this time Iraq has allies if not agents already in the US
who are ready to kill), then the market will start to discount appropriately
the significant raising of risk that has occurred amongst what has already
been an amazing month.  Let us imagine that the enemies we are facing had
clearly and directly  targeted and succeeded in the assassination of our
President.  What then?  Define how that event would change things. Imagine
why and how the response of the United States would be unilateral if a
foreign power is the author of the anthrax if not also the provider of the
ability to attack. 

Well we do not have to wait for that eventuality for your imagined results
being realized;  for as far as the foreign policy of this country is
concerned that event has happened with an attempted assasination on the
United States Senate Majority Leader.   The next step will be just the same
as what you imagined for the event has occurred though luckily not
effective. Why this is different from the WTC  is that now the United States
is almost certainly required to act unilaterally and decisively.   Though it
seems most want to think this anthrax is originating from good ole wacky
home grown nuts, making the anthrax in backyard stills in Iowa, that these
cases are not necessarily connected (huh?), then we will almost certainly
find a sovereign power able to fork over the millions required to make
weapons grade anthrax and supply a locale to make it - then given the need
to act unilaterally and against a sovereign power this means a good old
fashioned world war. Now for sure we have occupation and nation building big
time.  Remember Arch Duke Ferdinand?  Well Daschle didn't die but that is
about all that separates this assasination attempt from the bomb thrown in
1914.

meanwhile we have a market that sees risk has been reduced since 9/10 and
rallied 1 1/2% in the NDX and rallied 1% in the SPX.  Bond guys look to be a
bit smarter than stock guys as they rallied the bond after the Daschle news.
It seesm an incredible hubris/denial/arrogance pricing is building in the
stock market with the worst price action on the upside showing large
institutions out of control in their shorts and short covering in panic or
leveraged institutions gaming their peers and eating them like guppies eat
their young.  Maybe one or two Mr. Bigs can be thrown into the pot.  But the
market action in this context is, in my mind, multitudes more sickly than
the worst of the greed show in the Great NDX Squeeze of 2000.  That required
a 50% penalty for the stocks involved and I am suspecting such a penalty
will be forthcoming for this market as well.  The NDX could have likely
wound down to 1200 or so (about 200 less than I was calling for last year
due to the war), with a recovery set for next year.  But the current rally
and trading without regard for the current realities and with singular
sources and tpes of leverage enabling  much of that trading means the new
bottom for  insult in overbidding as in  bridge means we are headed for 800
in NDX.  Bonds 112.  I fear.  And with more American dead.