“The terrorists in Paris are no more true Muslims than the KKK are true Christians”.
– Pastor Robert Emmitt
What do you say about the terrorist attacks on Paris? Really words don’t suffice…action does. But the challenged posed by groups like ISIS and Al Qaeda is they are not state-sponsored organizations (at least not overtly). They are renegades, bound together by a skewed view of religious principles following their own interpretation of biblical text that no god would endorse.
Hence, neither France, the U.S. nor any nation can launch cruise missiles at the capital of ISIS because it does not exist. Hardcore, misguided religious fundamentalists are spread across every inhabited continent. While the Muslim religion receives most of the attention, in this regard there are radicals within every major religion including Christianity (remember the Oklahoma City bombing). Terrorists live among us – a sober reality. To this end, it was revealed over the weekend that one of the individuals responsible for the attacks in Paris was a native French citizen and at least two others were French nationals.
So what can we do? We can elect officials that support strong U.S. defense capabilities and hope that government anti-terrorism efforts continue to evolve to halt these heinous acts before they occur. Yet no system is perfect and it is impossible to expect that governments alone can stop every planned terrorist activity.
Some of the responsibility for preventing terrorist acts falls on average citizens. We cannot allow terrorists of any religion to deny us the benefits of a free society that so many throughout history have given their lives for. That does not mean that we should blithely go about the business of our lives. Rather, we should go about the business of our lives while being vigilant of those around us and contacting the proper authorities if there is genuine reason for suspicion.
With enemies integrated into society, often times it is the members of society that will be best equipped to detect unusual behavior that reveals their presence.
Six consecutive weeks of equity market gains induced investor complacency that was shattered last week. Global equity markets suffered weekly losses greater than 2%, while the U.S. markets were hit harder with major indices declining more than 4% on the week (the S&P 500 is now flat for the year). The value of fixed income instruments rose, though not at a pace commensurate with the losses in equities. The UST 10-year bond yield declined 6 bps to yield 2.27%, while the 30-year bond fell only 3 bps to an annual yield 3.05%. The combination of new debt issuance last week by the U.S. Treasury combined with a potential December rate hike by the Fed likely prevented yields from declining further. Hard assets provided no refuge during the week, with WTI crude plummeting 8% to $40.73 per barrel. In reaction to the negative risk sentiment, hedge protection was bid causing the VIX Index to jump by 40% to 20 (from 14 a week earlier). All-in-all, it was a pretty ugly week for the financial markets. Additional market detail can be found here.
P.S. There will be no weekly synopsis next week due to the Thanksgiving holiday.