It’s amazing how negative investors can get in a matter of days. I finally switch to a marginally positive market bias and now everyone is proclaiming doom and gloom. Timing is everything!! I guess I am being stubborn - just don’t call me an optimist - but at some point, reality has to set in and we will have to resume some rational assessment of earnings. I am not trying to downplay the significance of the geopolitical issues from Korea to Israel / Lebanon / Palestine / Syria / Iran - after all, people are dying. However, when I hear smart commentators and some guests proclaiming that we have already begun World War 3, I cannot help but feel that things are being exaggerated. It is possible that we have begun an apocalyptic series of events but there is no evidence of it (yet). In fact, I have been encouraged by some of the sideshows to this drama.

Let’s start with North Korea: The US did not preemptively take out the missile on the launch pad or try to shoot it down during its 40-seconds of fame. That would have been an act of war, played into North Korea’s hand and only worsened the situation. Instead, their actions and comments are the sole focus and the results are impressive to me. South Korea finally appears to be ready to stop enabling the North’s bad behavior and China seems like it is serious about dealing with their unruly child. These are net positives for the people of North Korea, South Korea, and Japan and in general, for world markets. Unless something new happens, I don’t expect North Korea to affect the stock market in a meaningful way in the short term.

Regarding the spiraling crisis in the Mideast - I am not as optimistic that this will improve over the next few days. Israel has clearly drawn a few big lines in all that sand - not just their little part of the sandbox. Gaza, Lebanon and Syria are no longer offlimits to Israel and I am confident that these areas will escalate into much more extreme violence over the weekend. However, I am in the camp that believes this mess is much more about Iran than anything else. I am sure they would love to take the spotlight off their nuclear program and the UN’s threat of sanctions if the most recent offer is not accepted by the mullahs. Given their financial influence over Hezbollah and Hamas that totals over $200 million annually, Lebanon and Syria are convenient pawns for Tehran. I don’t believe that Israel would attack Iran directly because of the geographic and political hurdles to get there. They will not gain support from Jordan, Syria, Turkey or Iraq so it looks like this battle will be contained along the Israeli border.

One of the disappointments I have had during almost 5 years since 9/11 has been the public response of Arab nations to the fight against terror. Oh sure, there have been a few comments but most of those have been only in response to attacks against muslims. When Jordan was hit, there was an immediate criticism of terrorism. When Saudi Arabia was hit, there was a similar immediate reaction. When it comes to terrorism in the Mideast, there is quiet when Israel or America or any non-Islamic members of the coalition in Afghanistan or Iraq are attacked. Beheadings are not met with outrage and neither are IED’s, but if a marketplace is bombed, then come compassionate calls for an end to killing other muslims. This is not about humanity or terrorism - the double standard suggests to me that it’s largely been tolerance for Islamic fanaticism and fascism.

However, in the current crisis, I am hearing some rumblings from Arab nations that suggest a change in this approach and for that, I am very hopeful. In the past 24 hours, the Syrian ambassador to London, in an interview with the BBC, called on Hezbollah to stop firing missiles at Israel and said “Syria is not interested in joining the battle.” This is significant. Furthermore, a Saudi official criticized Hezbollah’s capture of two Israeli soldiers and warned that Hezbollah’s actions could lead to “an extremely serious situation which could subject all Arab nations and its achievements to destruction. The kingdom sees that it is time for those elements to alone shoulder the full responsibility for this irresponsible behavior and that the burden of ending the crisis falls on them alone.”

There is an emergency meeting of the 22-member Arab League on Saturday in Cairo. If the leading members such as Egypt and Jordan or a joint resolution of all the nations, would stand up and denounce the actions of Hezbollah and Hamas, it would go a long way. For too long, Islamic terrorist organizations have received silence, support and tolerance. They won’t listen to the UN or anyone outside their group - maybe there is some chance that if leading Arab countries will speak out, they will listen. Just maybe, but that would be progress.

In this doom and gloom, there are reasons to be optimistic. I know it’s easy to reach for the worst case scenarios like World War 3 and $200 oil, but I am hopeful that other nations can step up to cool this down. I don’t know who wants to buy stocks this afternoon and if there is a buyer’s strike, this will get uglier than it is now. Maybe we can count on the elusive bargain hunters and bottom fishers to bail us out? I doubt it.