People killin', people dyin'
Children hurt and you hear them cryin'
Can you practice what you preach
And would you turn the other cheek

Father, Father, Father help us
Send some guidance from above
‘Cause people got me, got me questionin'
Where is the love (Love)
Black Eyed Peas

Earlier this week, I began an interview on Fox Business by asking the guest if the market had entered into some kind of Pax Romana period. It wasn't a planned question; it just popped into my head since I knew the guest was bullish on the market. Yesterday another guest described a backdrop for the Fed that wasn't deflationary or inflation which gives them room to risk zero percent interest rates for the next three years. While the stock market has been anything but peaceful for the past decade and major economies face serious treats, the world itself may be entering a modern version of Roman Peace.

It is certainly counterintuitive in light of American's two wars, the one we sponsored in Libya, the Arab Spring and the general notion the planet is spinning out of control.

Believe it or not, this might be the most peaceful period in the history of the planet. It's all laid out in the latest from Steven Pinker, Harvard psychologist, and author of "The Blank Slate," that shook up generally accepted norms about human behavior. In "The Better Angels of Our Nature: Why Violence Has Declined," Pinker uses mounds of statistical evidence to first prove violence is down significantly from earlier ages but also reasons for this miraculous turn of events. (I haven't read the book but plan to do so very soon, but I wonder if it clashes with the premise of "Blank Slate.")

Each night we are greeted with horrific news of senseless crime, more often than not within our own community, but when that's not available, the media always has an atrocity from somewhere on the planet. Songs of violence and the quest for peace and justice are always on the airwaves with megahits in the past from the Eagles, Emerson Lake and Palmer, Jackson Browne, Peter Paul and Mary, U2, Bob Dylan, Joan Baez, John Meyers, Jimmy Hendrix, Michael Jackson and Bob Marley- to name a few. Most of the time the lyrics, like those from the Black Eyed Peas "Where is the love," point to a world self-destructing in senseless and hopeless violence.

The answer to that question might be that love is all around us...or at least as much love as there has ever been before.

That Stats and the Reason

People killed in battle
Before countries organized 500 per 100,000
19th century France 70 per 100,000
20th century (with two world wars) 60 per 100,000
Now 3/10 out of every 100,000

Genocide deaths per world population were 1,400 times higher in 1942 then 2008

In US wives killing husbands 0.2 per 100,000 now from 1.2 per 100,000 1976
In US husbands killing wives 0.8 per 100,000 now from 1.4 per 100,000 1976

The main reason for this amazing peace in the world even as media and entertainment paint a picture of a world covered in blood, according to Steven Pinker, smarter people. Apparently the average teenager is smarter with each generation. Pinker points to IQ test which are adjusted to keep the average at 100 so teenagers that now score 100 would have hit 118 in 1950 and 130 in 1910. (I'm not sure I believe this part per se, but I think my son has more knowledge than I had although not sure it means he's smarter.)

"As we get smarter, we try to think up better ways of getting everyone to turn their swords into plowshares at the same time." Steven Pinker

The world being less violent does make a lot of sense and not only dovetails with the idea I continue to push that never has the entire planet been this upwardly mobile but provides the perfect backdrop for that to happen. It's difficult to make money and fight civil wars at the same time. Take Angola which suffered under a brutal civil war that lasted from 1975 to 2002 and took 500,000 lives while displacing 1,500,000 additional citizens. Now Luanda, the capital of Angola, ranks as the most expensive for expats to live. Called the Dubai of Africa, a two bedroom luxury apartment rents for $7,000, substantially more than the $4,300 in New York, $3,300 Shanghai, $2,456 Rome, and $1,800 Buenos Aires.

Sources for Steven Pinker background http://www.huffingtonpost.com/2011/10/22/world-less-violent-stats_n_1026723.html?view=print&comm_ref=false and http://en.wikipedia.org/wiki/The_Blank_Slate

To me the formula seems to be Smarts + Peace = Prosperity.

American Peace

The period of peace in Rome described by Gibbons is known as Pax Romana and has been the dream of many since then. Beginning in 27BC with the rule of Augustus to 180AD, and the end of the rule of Marcus Aurelius, that 207 period of peace was sparked by the end of civil wars, the spread of the rule of law and strong military protection (but fewer wars). Rome learned to be prosperous with less violent plunder but rather domestic self sufficiency. It is said Augustus convinced his citizens to avoid risky wars through skillful propaganda. On the other end of this period was Marcus Aurelius, author of "Meditations." His work is timeless and considered to this day to be one of the greatest works of literature ever.

So much of his ideas need to be read by leaders and would-be leaders in this nation today including:

From my governor, to be neither of the green nor of the blue party as the games in the Circus, nor a partisan either of the Parmularius or the Scutarius at the gladiators' fights; from him too I learned endurance of labor, and to want little, and to work with my own hands, and not to meddle with other people's affairs, and not to be ready to listen to slander.

From Fronto I learned to observe what envy, and duplicity, and hypocrisy are in a tyrant, and that generally those among us who are called Patricians are rather deficient in paternal affection.

Wow! It is amazing how timely his observations and advise to the world was then and now. For more of this timely wisdom go to and send your local lawmaker to:
http://classics.mit.edu/Antoninus/meditations.1.one.html

End of Peace and the decline of Rome began through a combination of class warfare, the invasion of Huns and terrible leadership. So in this world of nuclear bombs, a billion handguns and amazing animosity, it would seem the peace is tenuous at best. Of course according to the Black Eyed Peas this peace doesn't exist in the first place. For our nation where crime has been declining for years it's truly amazing and belies the notion that gun ownership kills people or increased poverty would unleash a wave of lawlessness.

Yet with our difficult financial circumstance and mean-spirited leadership we could tumble out of this otherwise Pax Americana. I hope Pinker is right and we are too smart for that, but there is another formula at work too.

Less Prosperity + Harsh Propaganda of Blame = Something Less than Peace.

Today's Session

Once again GDP failed to reach 3% as many analysts predicted but instead the first reading for 4Q11 was 2.8%. The number is a sobering reminder this is the worst post-recession recovery in the history of this nation. The news offset mostly good earnings, especially in the tech sector, and come after the worst session of 2012. The market has to be challenged and perhaps that began yesterday.