Collective Wisdom

Terrorists have claimed to be trying to disrupt economic activity in the west, through fear. While there was quite a bit of disruption following the 9/11 attacks, and a short-lived disruption in London transportation following the 7/7 attacks, it seems that the collective wisdom of the markets is that the attacks are not going to do lasting damage and that the prospects of targeted countries are good.

Lawrence Kudlow notes all of this and concludes:

All these markets are showing a lot of confidence in the future. I have long believed that stock indexes reflect the health, wealth and security of individual nations. Despite the radical Islamist assault and its attempted fear tactics, rising equity bourses surely suggest that the U.S.-British allied coalition of the willing is slowly but surely making enormous gains to defeat the totalitarians and to spread democracy and freedom worldwide.

This seems right to me.

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