Assassinations: Evaluating the Effectiveness of an Israeli Counterterrorism Policy Using Stock Market Data by Asaf Zussman and Noam Zussman. pdf

 

Abstract

Targeted killing (henceforth assassination) of members of Palestinian terrorist organizations was a major element in Israels counterterrorism effort during the Palestinian uprising which started in 2000. We evaluate the effectiveness of this policy indirectly by examining Israeli stock market reactions to assassinations. Our approach relies on the assumption that the market should react positively to news of effective counterterrorism measures but negatively to news of counterproductive ones. The main result of the analysis is that the market reacts strongly to assassinations of senior members in Palestinian terrorist organizations: it declines following attempts to assassinate political leaders but rises following attempts to assassinate military ones.

(Source: International Review, January 29, 2002) New York City, stunned from an estimated US$105 billion in damages incurred in the attacks of September 11, may have been ground zero for the latest terrorist attacks unleashed by Muslim radical Osama bin Laden but the economic repercussions are felt all over the world .

 

For days, terrorist concerns grounded all civilian aviation, shut down the stock market and disrupted transportation throughout the country. A possible forecasted U.S. recession will reverberate throughout the world. World Bank President James Wolfensohn believes the terrorist attacks will cut global economic growth by up to 1 percent in 2002. link

(Souce: U.S. Department of State) The US State Department has released its annual report into global terrorism. Overall, terrorist attacks were at their lowest levels since 1969 but attacks on US interests increased on the 2002 level.

• There were 190 acts of international terrorism in 2003, a slight decrease from the 198 attacks that occurred in 2002, and a drop of 45 percent from the level in 2001 of 346 attacks.
• A total of 307 persons were killed in the attacks of 2003, far fewer than the 725 killed during 2002. A total of 1,593 persons were wounded in the attacks that occurred in 2003, down from 2,013 persons wounded the year before.
• In 2003, the highest number of attacks (70) and the highest casualty count (159 persons dead and 951 wounded) occurred in Asia.
• There were 82 anti-US attacks in 2003, which is up slightly from the 77 attacks the previous year, and represents a 62-percent decrease from the 219 attacks recorded in 2001.

 

 

A 7.4mb pdf report can be found here.

Thanks to Thomas E. Hart for recommending that article.

 

(Source: IRMI) It seems clear now that if governments and businesses are to win the battle against terrorism, they must take a completely proactive stanceanticipating likely targets, substantially beefing up security, and establishing countermeasures to prevent future attacks from occurring. It is crucial for governments and businesses to coordinate a definitive approach to creating a more secure environment.

 

The Madrid bombings have proven to be a watershed in the fight against global terrorism. For the cost of less than $1,000, Al Qaeda succeeded not only in its objective of punishing the Spanish people and government for their support of the war in Iraq, but also in what was undoubtedly its other objective: achieving a Spanish pullout from the American-led coalition forces in Iraq. The added bonus was the ability to change the Spanish government, with the Socialists being swept to power in the wake of the bombings. With the shift to the Left in elections in France last month, one wonders if Al Qaeda may be prompting a more widespread shift in global politics to the Left. The trend in Europe is becoming clearer.

 

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(Source: riskmail-ML)

LONDON: India is not the most dangerous place - that dubious distinction belongs to Iraq, the world's second largest insurance broker has clarified. This comes 24 hours after Aon Corporation's panic-inducing terrorism risk map appeared to put offshoring Western companies, foreign investors and insurance underwriters on 24-hour notice to get out of India.

 

Martin Stone of Aon admitted to TNN his organisation's unique map, which graded countries by number of terrorist attacks, may have been spun by Western media outlets because offshoring to India had become a political issue. It was Aon's and possibly, the world's, first terrorist threat grading by numbers and it damningly showed India outstripping even an Iraq in flames.

 

But Stone said his firm wanted to remind the world of facts about India. "We are not trying to discourage investment in India, which is politically stable, but again (risk to firms) depends on location (of foreign investment or subsidiary)." Analysts said Aon's clarification could hardly trump the enormous bad-news value of the map's initial publicity.

 

They pointed out coincidence that Stone's upbeat clarification comes on the day 25 people were injured in a grenade attack in Banihal. But Stone denied the Number 1 ranking for India on Aon's global terrorism risk map would have a long-term knock-on effect on the country's prospects.

 

He said it would not cause insurance premiums to rise unsustainably for India-bound foreign firms. And he rejected possibility some investors would bail out and market chatter would begin to focus on bad-luck India stories. He stressed the world appeared to forget problems in its focus on Iraq and Madrid. Kashmir has had more terrorist attacks than anywhere else, he insisted. But Stone concluded that this need not matter to potential business entrants into India because not a lot of foreign or even Indian investment is in Kashmir. The map meant to tell the story as it is, divorcing all emotion from terrorist attacks. link