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    Bulls & Bears

    This past week's Bulls & Bears: Gary B. Smith, Exemplar Capital managing partner; Pat Dorsey, Morningstar.com director of stock research; Scott Bleier, HybridInvestors.com president; Joe Battipaglia, Ryan, Beck & Co. chief investment officer; Mike Norman, BIZRADIO show host, and Meredith Whitney, CIBC World Markets executive director.

    Trading Pit: Stock Dual Crisis

    North Korea and Iran: Two countries, each with a fanatical leader, are causing an international nuclear crisis. North Korea has been firing missiles. And Iran is facing a deadline this Wednesday to answer for its nuclear program. Is this dual crisis taking a toll on the market?

    Mike Norman: This is an extreme and significant danger to the market, the economy, and to America. These are two rogue nations, both sponsors of terrorism, and one has developed a delivery system for nuclear weapons. And these weapons are pointing directly at us! We are going to be bombed and you can say goodbye to the stock market and hello to anarchy when it happens.

    Gary B. Smith: I don't know if I can go along with Mike "Mr. Sunshine." I do agree with Mike's premise that all of this is scary and this is potentially bad for the market if something happens. So far, though, nothing has happened. I'm not saying we shouldn't be scared, but until something does happen, Wall Street will just look the other way and go about its business.

    Pat Dorsey: Nuclear weapons are something of a trump card. Nuclear weapons in the hands of North Korea and madman Kim Jong Il are a big problem. He is simply delusional and irrational. He has had these missiles for a long time and that's what makes it unpredictable. The missiles keep getting better and have more and more range to them. That is the big risk here and makes the Iranian government seem, to some extent, rational. We may not agree with Iran's policies, and they may be strange, but there is some kind of calculus going on there. The folks in North Korea may just think they can take on the world and win. That's what makes this so frightening.

    Meredith Whitney: North Korea showed what they had. They opened their kimonos, so to speak, and they don't even have the latest and greatest. It is no secret that Kim Jong Il is a mad man. Iran actually made a bigger statement that they are privatizing a lot of the local economy. That is a huge statement for capitalism. I think these guys are blow hards and Wall Street knows it.

    Joe Battipaglia: The stock market will follow these developments closely. As we did with Iraq, when it is time, we will take action. The market will then step aside and watch the diplomatic effort end. The President has drawn a line in the sand. If the United States feels like it is threatened by either nation, then we are prepared to take action. Now is not the time, so the market is at a discount.

    Scott Bleier: We are all making too a big of a deal out of this. First of all, we had nuclear weapons pointed at us for thirty years in the Soviet Union. The economy did just fine and the stock market did just fine. Yes, Kim Jong Il is a lunatic. Choke him off.

    Target: Economy!

    Terrorists again targeting New York City and Wall Street, threatening to blow up transit tunnels and flood the city's financial district. News of the plot breaking Friday and those who planned it were arrested before an attack took place. Is America's economy the terrorists' top target?

    Gary B.: It absolutely has to be. It's similar to when your kids are acting up and you punish them by taking away the iPod, computers and videos. The terrorists are trying to do the same thing; they are trying to take away our prosperity. It's the way people view America, which is why terrorists are targeting Wall Street, the financial district, and the World Trade Center. It has to be the number one target.

    Pat: Ten years from now when we look back to the second and third quarters of 2001, 9/11 is just going to be a blip on the economy. September 11th was an extremely tragic event, but it didn't really hurt our economy. We are too large of an economy to be harmed by a single action like this latest threat. The effect is more symbolic than anything else.

    Joe: It is interesting to point out that the terrorists have only been relatively successful on soft targets. They have only been able to attack the subways in London, trains in Spain, and resorts in the Far East. Clearly the terrorists have been unsuccessful in taking on the energy network, the supply chain, and the U.S. economy in different places. So far, so good, for America's attempt to push back terrorism and limit the terrorists' capability to be successful.

    Mike: The terrorists want to kill us! It is not a question of commerce. They want to kill us! They took down the World Trade Center. They target New York and other large cities because they are population centers. These guys want us wiped off the face of the Earth.

    Meredith: The population concentration is not downtown; it is midtown and farther north. It is symbolic, but so much of Wall Street has back up facilities. Two-thirds of our GDP flows through New York. The lifestyle of Americans after 9/11 changed. People stopped traveling and spending and that is a much more serious threat.

    Scott: The goal of terrorists has always been to disrupt the American economy. New York is the heart of the American economy and the center of worldwide capitalism. Of course they want to attack NYC and that is why New York should get the lion's share of the Homeland Defense and Security dollars out of Washington, DC. This latest threat just reinforces the fact.