The story reads, as it should, like a spy novel. Last August, the CIA discovered a regular courier route leading to a heavily fortified compound in Abbottabad, Pakistan. It must be somebody really important in there, figured the CIA operatives. And it was none other than Osama bin Laden.
In a rare Sunday night message broadcast worldwide from the White House, President Obama announced the sting operation that killed bin Laden early Monday Pakistan time. Predictably, there was jubilation all over the world.
Yet, the jubilation was subdued, because it doesnt take a foreign relations expert to realize that bin Ladens death will not mean the end of al Qaeda or the Taliban, and worse, it could spark violent retaliation. In other words, it is hardly the end of terrorism-inspired fear.
My first reaction when I read the news at 5 a.m. Monday was, why in the world did the CIA give bin Laden a burial at sea, rather than show the body to the world, or at least a million pictures thereof?
The reason is this: A burial at sea conforms to Muslim custom, and shows a great deal of respect. To have dragged the body around would have incensed Muslim fervor, and the consequences surely would have dire. This way, the al Qaeda downfall is facilitated.
On this Monday, it should be fun to watch global reaction, particularly in the financial markets. Even as early as 6 a.m. Mexico City time, the dollar around the world was bouncing back from three-year lows, oil, silver and gold were heading south, and Treasury bond yields were forging ahead while T-bond prices were plummeting.
A few hours before the Bolsa opens, Im willing to bet my bottom peso that irrational exuberance will dominate the session and the IPC will rise fast. Thats not my crystal ball talking. My fearless prognostication is based on the rise of the few Asian markets that are open today, and on S&P500 futures that were climbing several points ahead of the bell.
The event will spark a greater appetite for risk, and thus the inflow of foreign capital into Mexicos markets, the subject of considerable debate over the past several months, will remain unabated.
Politically, the news that bin Laden was killed in a CIA operation will have a massive albeit yet to be determined impact on the political landscape of the United States. At first glance, it basically guarantees Obamas reelection.
As I mentioned earlier, the simple fact is that there is and will continue to be a huge desire for the details of how, when and where he was killed as well as analysis of what it means for U.S. foreign policy. Media coverage for days if not weeks will be dominated by the news.
The obvious, overwhelming amount of coverage and attention will force anyone operating in the political space to respond to it. So, while this news is not political, it will cause major reverberations in the political world. For example, it wasnt even dawn yet when Mike Huckabee, a Republican frontrunner who had been particularly harsh on Obama recently, issued a jubilant congratulatory message.
We must bear in mind that what we know in terms of the impact of bin Ladens death is far less than what we dont know. At this juncture, when details are only beginning to emerge, its easy to draw overboard conclusions about the political meaning of this type of development.
The terrorist boss death could also have economic reverberations. For one thing, it will probably bring another period of bipartisanship in Washington, similar to what happened in the wake of the 2001 attacks, opening up the possibility that major agreements can be achieved to get the U.S. economy truly back on track. How long will the non-partisan mood might last is anybodys guess.
But when and if it happens, four-dollar gasoline, the unemployment rate and the general direction of the economy will reassert themselves as major issues heading into next years election.