Real Patriots Buy Savings Bonds
August 2, 2004
The market has spoken in the face of warnings of specific terrorist threats. After exhibiting opening jitters, all the major indices closed in the green. Even more significantly, the VIX reversed course and ended the day with barely a peep of added put-buying. It is as if Wall Street has decided to meet the challenge against its economic vitality and demonstrate that any real threat has already been well-priced into the market. It was not an impressive show of force, but we can all be relieved that the market did not wobble and did not open a new month only to resume the last month's sickening slide.
We should now expect that pundits and other commentators will draw parallels to the market's response after re-opening following the 9/11 attacks. But as anyone who bought the market during that relief rally can tell you, buying stocks as a show of stubborn patriotism can quickly turn into a financial hardship. The major indices have largely run into serious resistance at those post 9/11 highs, and they do not look like they have enough "juice" to mount another serious challenge anytime soon. In a previous generation, during World War Two, patriots supported the government and society's financial health buy purchasing savings bonds, also known as "War Bonds." In these times of big-deficit spending and deep tax cuts for those with the mostest, perhaps we should think less about funding corporate America's dreams as our road to patriotic glory, and think more about revisiting government's role in protecting the homeland and financing those efforts. Perhaps an "anti-terror" savings bond is a bit much, but certainly more tax cuts and smaller government cannot be the answer either? Regardless, before you click that mouse on the buy button in defiance of global terrorism, think first about what our patriots of yesteryear did! You can return to that buy program with the left-over funds.
Be careful out there!