"Profits or Pundits"

[reason.on]

http://www.tcsdaily.com/article.aspx?id=083006D

Who teaches you more, pundits or profits? That's the question I asked myself every time I saw a talking head on cable TV during the month that was the Israel/Hezbollah crisis.

Head-after-head made case-after-case that it contained within in it the distilled wisdom of the mysterious aggregation known as the 'Arab Street'. Do these guys even speak Arabic? I wondered. Don't get me wrong, my own Arabic vocabulary is about five words, and three of those are foods. But then again, I'm not a Middle East pundit, nor do I play one on TV.

One type (of talking head) told me that Israel was fully justified in what they were doing. They seemed relieved that finally someone (Israel) was taking the gloves off in the war against terror. The other type said that Israel was destabilizing the region with their counter-attacks against Hezbollah. They focused on civilian casualties in Southern Lebanon and used words like "disproportionate".

After the cease-fire agreement was announced, the sides swapped moods. Doves: Happy. Hawks: Angry.

When I want to know what the people of a region are thinking, I look at two things: short-term capital flows and long-term migration. The two most important votes that a man can cast against his rulers are when he votes with his feet or when he votes with his nest-egg. Usually, he does it in the reverse chronological order.

Since long-run migration patterns after the crisis will not be available until, well, the long-run, we should look at what capital markets are saying.

I've taken a cross section of large, publicly traded blue chip companies that do business in Arab countries. This group, dubbed, "The Arab Titans Index," is composed mostly of banks and utilities. Then I synced it with a time-line of the major attacks and counter-attacks of the conflict.

RCR

[Michael Stuart Kelly]

Christian,

I love it! People can blab all they want, but when it comes to the pocket-book they get serious - even Arabs.

Michael