Diary of a Financier

Osama bin Laden Killed by US

In Existential on Tue 3 May 2011 at 08:08
  • The nemesis for an entire generation, Osama bin Laden was announced killed by US special forces on Sunday night.
  • The nationwide celebration was the first for a generation who’s been luck enough to evade traditional warfare.
  • Intraday Markets faded the good news, steering the “bin Laden rally” into the red by the close, which often marks a market top.

I was wide awake Sunday night at 10:50p ET when I got a text message from my father, “Bin Laden is dead!”

Obama addressed the nation world around 11:35p.  His was an underwhelming speech, but semantics really don’t matter at a moment like that.  The New York Times ran a terrific play-by-play this morning, but here’s the memory that will stick with me:

When NBC broke from the White House press conference, they rested the camera on the crowd of Americans congregating outside the White House gates.  In an age of High Definition broadcasts & artsist-gone-cameramen, this shot of the crowd was strangely grainy, static and tight.  For a moment I though we were watching closed-circuit from a security camera on the White House roof.  It felt more like a scene from Times Square after WWII.

American flags of all shapes & sizes flapped from outstretched arms in the crowd.  In the dimly-lit grey of night, the fist-pumping, flag-waving mass on Pennsylvania Avenue looked like open swim at the public pool where so many spent summer days in their childhood.

In that NBC picture frame, two college kids–clearly friends–found each other through the fray.  From opposite corners of my TV’s border, they came to meet in a safe pocket of air within the splashing.  They high-fived.  One kid stepped back and grabbed his head with two hands, as if to say, ‘I can’t believe this! can you believe this? I can’t believe this!’  They then propelled themselves toward one-another (I thought they were closing-in on a chest-bump) and embraced.  One of the kid’s hat fell off, but he didn’t even flinch; he just let it sink to the bottom of the fray, gone forever.

(That reminded me of my first Bruins game.  Someone scored a hat-trick and the guy behind me convinced me to throw my hat onto the ice.  Steeped in the infectious emotion of the Boston Garden, I had the biggest grin stretched across my six-year-old face, my belly boiling with elation.  Like Doug Flutie dumping a pass over a defensive line to a slanting receiver inside the hash-marks, I arced my hat at a parabolic trajectory, over the boards, deep into the rink, where it was lost in an ominous cloud of other hucked-hats, while all my 80 pounds kept springing up & down on my seat.  I was lost in that emotion throughout the rest of the game, and with the same willing suspension of disbelief that leads a kid to subscribe to Ronald McDonald’s magic, I casually reasoned that some magical mechanism would return my hat to me at the end of the game.  I never got my hat back, and upon that realization I was devastated.  This college-kid on TV didn’t think twice about his hat.)

They broke apart but kept an arm around one anothers’ shoulders.  They waved at some friends who were lost in the crowd off camera.  Someone handed one of them a little flag.  Someone else neigh high-fived one of them.  A hug here, a fist pump there.

When I turned on the news initially, I was watching the futures tick higher on my Blackberry, while the paper-man news anchor kept repeating the story to fill the time until Mr. Obama’s press conference.  At that time,  Silver (SI/1) had recovered from its -12% lows, trading only -10%; Dow (Z/1) +0.85%; S&P (ES/1) +0.76%.  By midnight I was overcome with the scene on my TV, and echoes from nearby Boston Common were drowning out the hum of my ceiling fan.

I’m probably the last author on the web posting his reaction, but I wanted to capture the elation in a diary entry for posterity’s sake–void of any philosophical dialogue about “how much he deserved it,” since I’m sure the UN will pursue human rights investigations at some point.  With Osama’s carcass slipped into the sea, evidence of his death is as ephemeral as the Hitler’s or the Moon Landing, and therefore subject to the inquiry of future generations.  My generation has been lucky enough to elude such wars that warrant such magnanimous celebrations.  In my lifetime, I can’t recall our entire nation celebrating with such united, unadulterated ecstasy.  The closest thing I have to compare it to is the 2004 Red Sox World Series, which merely affected the citizens of Red Sox Nation.

It’s a shame that I bring markets into the conversation, but it’s important to me that I crystallize my trading thoughts as well.

I find Monday’s intraday swings troubling: both DJIA & SPX swung from highs +0.51% to negative territory by the close.  All news–whether good or bad–has pushed this Market higher over the past four months.  For the first time in years, we yesterday met a Market who wanted to fade good news.  That’s a characteristic of a market top.

I originally found bin Laden’s assassination a timely announcement given the US fiscal situation.   I thought this would trim the CBO’s projection for defense spending.  I’ve digested the cause & effect, which now has me thinking that defense spending will actually uptick in the near-term, whether from redoubling of Middle East efforts or domestic security safeguards.  The Market reared ambivalence within defense names, which offset one another’s progress on the day (LMT -0.64%, NOC +0.88, IRBT -2.23, MAGS +1.58%).  However, Airlines finished noticeably higher (AMR +1.36%, DAL +0.77, JBLU +1.06, UAL +3.07).

–Romeo

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  1. Very nice account. I must say I was shoced that all the euphoria had not yielded gains in stocks, especially in light of recent inexplicable gain rallies. Your prediction of the peak seems on spot.

  2. […] 5/3- Osama bin Laden rally reversal characteristic of a market top. […]

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