Polls released the last week of December indicate that 75 percent of the nation's adult
population has digested the tragedy of the assault on the United States and want to move on. Some 25 percent aren't
ready yet and prefer to still linger.
On September 21st, stocks hit a three-year low, assuring the second dismal stock market year in a row. For 401-K
investors, average portfolios will be down for the year - the S&P more than 12 percent, Nasdaq down 20 percent
and the Dow with a more than six percent decline. The S&P 500 companies look to post their worst profit drop
- 22 percent - in the fourth quarter. The stock market players are definitely in equities and definitely out of
fixed income and cash holdings. In January, earnings reports will have to show evidence of profits to draw more
cash into stocks, Reuters predicts.
However, the S&P 500 has risen about 20 percent since September 21, the Nasdaq has boomed about 39 percent
and the Dow jumped more than 23 percent. Recent forecasts imply that the economy has certainly stabilized and recovery
is on the way. Some recovery is already priced into stocks and it will take some evidence of earnings to push the
market higher than the current almost pricey level.
The holiday season retail report indicates the worse performance in a decade. The guesstimate is that sales will
be up less than the rate of inflation and thus a wash. Inventories are being cleared by hefty sales on already
discounted prices. Air travel will end the year down 20 percent. On January 1, Europe embarks on its cruise with
the euro single currency. Originally valued at $1.19, the euro today is worth 89 cents. By February 28, the euro
will be the only currency accepted at banks and national currencies unconverted by March 1 will become worthless.
What the euro public reaction in Europe will be is anyone's guess. So is the chance for war or more major terrorist
attacks. Either could affect prospects.
That said, there are positive lessons to be drawn from the fourth quarter. Boosted by low interest rates, housing
and auto sales have performed very well. Even though they are "worried," people will still invest in
value. The consumer lesson of Christmas is that this year's buyers do not want to be trivial or frivolous. They
are, in many ways, "bought up." There is little that they really need that they don't have and they are
in control of their wants. They are, therefore, choosy shoppers requiring a great sense of value to open their
wallets and purses.
The primary reason for the economic upsurge, says The Economist, is the patient accumulation of successes by the
Bush administration. Americans have managed the 100-day war in a sober, well-organized, well-supported, and determined
way. The armchair critics have been routed. None of the disasters critics so confidently predicted have come to
pass. The folly of half-hearted engagement has been shown to create far worse problems than it solves.
The American triumph has been made up of unilateral military control wedded to consensual campaigns of state diplomacy,
intelligence-gathering, financial tracking and the vital public diplomacy battle for the hearts, minds and ideas
of the world. In its great success, the United States seems to have rediscovered itself.
In an editorial, The Columbus Dispatch newspaper notes that the belief in American exceptionalism is returning.
(Exceptionalism is the belief that the United States plays a special role in history because it embodies a unique
set of ideas about individual liberty and equality.)
What we had either forgotten, or had driven from us by the constant barrage of America's scoffers and haters, was
that this nation's greatness comes from its ability to recognize when it has failed to live up to its own ideals
and then correct course. The American genius is that its liberty and democracy make reform and regeneration not
only possible but unavoidable.
And that, says The Dispatch, is something special.
Worth standing up for.
Worth fighting for.
