FORTUNE -- Fortune looks back at the entries from those jarring hours and days after the September 11, 2001 tragedy.
September 11, 2001
A Modern-Day Pearl Harbor
Some random Street Life notes from here in Manhattan. I heard about the first plane crashing into the World Trade Center minutes after it happened. I was walking down Sixth Avenue in the 50s. I saw black smoke billowing out of the Tower. Then I heard about the second plane. Saw Bethany McLean, who saw the second plane crash into the Tower! Got into Time & Life Building. Watched the Towers collapse live on TV. Called my friends who work at World Trade. Remarkably none of them were there today. Thank God. Just an unspeakably horrific scene. Wall Street looks like a war zone. It is a war zone. Looking down Sixth Avenue from Time Life, all of lower Manhattan is blanketed by smoke. This changes everything.
There will, of course, be a tremendous human toll. Some of the other fall-out: this will cost many billions of $, actual percentage points of GDP, the price of oil spikes, major stress on nation's telecom system, could tip the economy into a recession? Possibly. Wall St. (NYSE) is never closed two days in a row; will be this time. Major impact on Wall St. Major impact on insurance. Major impact on airlines. Major impact in terms of cost of revamped security systems. Major impact on NYC economy and a significant impact on health care costs. Whole companies were vaporized when the Towers collapsed.
September 12, 2001
Struggling to Cope
Another update from NYC. Well, we are all struggling to cope. Last night was tough. Comforting our kids. Putting up a friend who was stranded in the city. (Kate's sleepover!) Drinking Wild Turkey! The level of personal tragedy is high and still unknown. I have lost friends and acquaintances. Who have kids.
We have never been through anything like this before, so no one knows what's going to happen. The market has never been closed for two full days in a row since WWII, VJ day--but who cared? Everyone was too busy kissing in Times Square. (BTW, JFK's assassination was 1.5 days.) Obviously world markets have taken a hit. That's what happens. There is talk of a global recession, and let's be honest, the cost will be huge. (FYI, did you know the 1993 WTC bombing cost over $520 million!) We are already talking about $15 billion this time!!! And that may be low...
Over the short term the price of oil will rise, stocks will sink, bonds will soar, gold will soar. This is all because investors will flee from risky investments to safe harbors. When the U.S. market opens--and we don't know when that is yet (They say tomorrow. Is that possible?), remember there is rubble and the WTC and all its paper, infrastructure, and computers have been vaporized- stocks will decline some. Will it help that the NASDAQ has already fallen from 5000 to 1600? Maybe. If this was March 2000, THEN we would be in real trouble.
Some companies and sectors will take a massive hit. The insurance business. This catastrophe is unprecedented. Insurers will have to pay for this. They say airlines and hotels will be hurt. Well, maybe.
This is a test for W. and also for O'Neill and Greenspan. The Federal Reserve is right now providing the economy with money so that it doesn't seize up. If one insurance company or bank needs money, the Fed is there.
Bottom line: Let's be real. They tried to destroy Wall Street and they did destroy a big chunk of it. But I'm not so sure that this is going to tip us into recession. We may have one anyway, AND often times the market recovers from this kind of thing. We are seeing New Yorkers rally together, lining up to donate blood, and I think they will persevere. People are comparing this to Pearl Harbor, it could also be like London in the Blitz in WWII, after which a city and a nation were galvanized and fought back.
September 12, 2001
Earlier today, there were only security guards at the New York Stock Exchange, who said that no decision had yet made about when to reopen. On the one hand, opening the markets is a show of U.S. strength. But what about the loss of life and the effects of shock and fear? What about the victims that are still trapped beneath the WTC wreckage? What about technical issues given the incredibly interconnected nature of the markets? The latest news (from a press conference held at Bear Stearns) is a mix. The two major U.S. equity exchanges will remain closed Thursday, but say they plan to resume trading possibly Friday, but no later than Monday. U.S. Treasury trading will resume Thursday.
Another sunny day in the city, calm uptown, pure hell and billows of gray smoke downtown--how surreal. Isn't it odd seeing people's reactions? Julie Creswell says that "an Upper East Side nail salon was absolutely packed yesterday; the wine store where my husband works had great sales. Everyone wanted a drink (including my friend Paulie, who's been sober for nine years--he got a cigarette instead), and no one wanted to be alone. We went out to dinner at Henry's on 105th Street and Broadway. It was packed, with long waits for tables. All the cabs had their off-duty lights on --until you told them you weren't going downtown... Outside of NYC, my family in Mississippi tells me that gas prices have shot up to $2.50 -$3 a gallon. I'm hearing reports that elsewhere, prices have spiked to over $5 a gallon. Luckily for the banking system, my husband, freaked out by the fact that credit card systems are working spottily, appears to be one of the few who rushed to the bank to empty his checking account." The Fed, adding to similar moves in Europe and Japan, has opened the reserve spigot, pumping a huge amount of money into the banking system in order to allay fears of a crunch.
Most people I've spoken to, like Hokanson Capital Management's Neil Hokanson, say that they are too "overwhelmed and overtaken" by events to sort out the effect--nor does it yet seem right to do so. Still, there's talk about the obvious: What about the economy? What about consumer confidence? What will happen to insurers? (I think the $775 million L.A. riots were the most costly, insured, man-made disaster until this.) AIG, Chubb, Swiss Re, Munich Re and Zurich Financial Services have acknowledged exposure. Berkshire Hathaway also says it will bear a portion of the insurance losses. And Lloyd's says that the losses are "unquantifiable at present."
September 13, 2001
Sorry if Street Life seems a little weary today, it's just that I'm, well, really getting run down. It was actually kind of a depressing day. The death toll -- it looks like it could climb towards 5,000 -- is getting firmer. Estimates of the cost of the disaster -- now at $30 billion -- keep mounting. And today, a new feature, bomb scares across Manhattan. I heard there were incidents at Conde Nast, Bear Stearns, Penn Station, and the old Morgan Stanley place next door. Standing outside the Time Life building with evacuees from next door, there was a large crash at a construction site nearby. 500 people jumped.
So the market opens Monday, not Friday. Thank God. I knew they could never open on Friday. You have to understand: it is a war zone down there still. With bodies. Fire. And collapsing buildings. I think Monday will be a challenge -- I hear telecom is a problem -- but the Exchange of course is a couple blocks to the east. Opening on Friday would have been a bad idea too because if the market dropped on Friday, people would stew all weekend and then panic sell on Monday.
I want sports back. Bad. I cannot go home every night and watch this stuff on TV. I just want to watch a baseball game or football or even tennie!
I think every single New Yorker -- AMERICAN -- agrees that Rudy Giuliani is doing a super job. I think that instead of voting for Herman Badillo or Vallone, New Yorkers should WRITE IN RUDY!!! Get rid of term limits.
September 14, 2001
Looking Forward, Looking Back
The day started rainy, gray and cold. I shudder to think of brave rescue workers' jobs being made even more difficult, and am relieved
that the sun reappeared in the afternoon -- just in time for the President's arrival. But the clouds somehow seemed to better reflect the mood of the city than the bright blue skies and sun of recent days. US equities markets were closed for the fourth day in a row -- the longest shutdown since the beginning of WWI, as everyone has repeated over and over again.
Treasuries continued to climb, gold jumped, the dollar declined, many European and Asian markets fell. But Japanese stocks climbed. While the market fades to near insignificance in light of the events of this week, many are wondering and worrying about what will happen on Monday. Vote for patriotism.
Monday. For many, including the NYSE, Con Ed, Verizon, securities firms, and the Nasdaq, it won't be much of a weekend at all. They'll be preparing to open the financial district by cleaning, rebuilding and running extensive tests beginning at 10 a.m. on Saturday. On a conference call originally scheduled to begin at 1 p.m. today but delayed while the President finished speaking, the NYSE's Richard Grasso reiterated that he is confident the equity market will open at 9:30 Monday morning. In response to questions about the sheer logistics of getting more than 75,000 people down to the Financial District, Grasso credited the "enormous effort" by the city, the state and others. As for food, Grasso says: "I don't think people are much thinking about food, but there will be provisions..."
For its part, Con Ed says it has about 300 people working around the clock laying some 100,000 feet of new cable downtown. Many of the investment firms I've spoken with have been surprised by the low volume of calls they've received -- perhaps a happy indication that investors aren't panicking. In fact, while everyone is devastated by the events and speaking in subdued voices, many also are relatively sanguine about the state of the markets. If you liked the stocks you owned on September 10th, there is no reason not to like them now.
How hard will it be? Impossibly hard. What will it be like for Wall Streeters to see the physical evidence of enormous tragedy and then have to function at work? Even for those who work in areas far from NYC, few in the financial community are more than two degrees away from people who have lost their lives. One big investment firm in New Jersey saw its offices turned into a triage center. The market, once all about the numbers, is suddenly about people. Even those of us who cover Wall Street have sometimes seen major firms and the exchanges as big, corporate entities rather than collections of people. Suddenly, they seem much more human as they struggle to return the nation's capital markets to as close to normal as they'll ever be. I don't think I'll ever think of the NYSE again without remembering Dick Grasso's face over the last few days.
Cooperation. At yesterday's press conference on the reopening of the markets, someone described Wall Street now as "an industry pulling for an industry." From the NYSE sharing its space with the Amex to the New York Merc potentially sharing space with the NYBOT to First Albany making an open offer to share its facilities to those in need, competition has become cooperation. And was it my imagination, or were pedestrians on New York sidewalks more considerate with their umbrellas than usual?
September 17, 2001
The Markets Worked
It was a day we will never forget on Wall Street. The most anticipated and watched session in history. Yes the market tanked. But more important, it worked. It persevered, and we showed the world that we will not be beaten down. We will not back off. "I believe that man will not merely endure: He will prevail." (William Faulkner's Nobel acceptance speech--read the whole thing here) This, even though the Dow dropped 684 points to 8920, the biggest POINT drop ever (a little over 7%). And Nazzie was off 115 to 1579, or about 6.8%. Hey watch me, Red Adair (it's hero week), I mean Andy Serwer, on CNN. READ Loose Change. Here's wazzup:
Stockyard... Monday's loss did not make the Top 10 biggest daily percentage drops, which is still headed by the 22.6 percent decline on Black Monday, when the stock market crashed on Oct. 19, 1987. Beyond the drop and battered airline stocks and insurers, and the defense stocks on the move and all that, is this simple fact: The markets worked. They worked. Yes there were hiccups, but they worked and you know what: Trading will be open for business tomorrow and the next. What happens next? I think we plateau, more or less. Interesting that the decline matched the declines in Europe and Asia. Market will go down more if economy tanks more. As for when the bomb falls in an anti-terrorism campaign, who knows, stocks may go up. And maybe just as important, tonight baseball begins again...
The previous largest point-loss was 617.78 points on April 14, 2000... As for Nazzie, well we are now at 1500, just like the bears said when Nazzie hit 5000. That was simple, wasn't it?... Sure, Raytheon was way up, but did you see Sturm Ruger gained a buck to $10.30... I say the market goes up 60 tomorrow!
Special report from the exchange by Dave Rynecki: "If someone told me a week ago that on Sept. 17 the Dow would be down 600 points before noon, I'd have felt that certain sense of urgency that always grips me when I perceive a sudden loss of wealth. I might grab a phone and call a few sources. 'Where's the bottom?' I'd ask. 'Are those Fed cuts ever going to work?' Not today. Today, I'd say, 'How wonderful.' This might be the only day in history when a 600-point decline is something to cheer about. The very fact that the New York Stock Exchange is open at all is a miracle made possible by officials who worked 20-hour days and cleanup crews that carted off truckload after truckload of debris that had clogged the financial district's arteries. In truth, it's a lesson in the determination of the American financial system and the people that make it work.
"Located just a few narrow, winding streets from the smoldering ruins of the World Trade Center, the 200-year-old Exchange remains covered in the residue of last Tuesday's attack by terrorists. Walk up a few yards from the entrance and the site of the former Twin Towers is visible--they are
now shells of steel and ash that look like very much like the scenes of cities in movies like 'Full Metal Jacket.' The stench of burning debris
lingers in the air. Smoke is unavoidable. It burns your eyes and gives you a hacking cough. Military vehicles are parked along the streets.
Police and National Guardsmen protect every corner, directing thousands of Wall Street workers to a checkpoint at Williams Street and Exchange Place where identification is required before moving on to Broad Street. Against such a backdrop, the NYSE resumed business today for the first time since the attack.
"In addition to the usual 3,000 or so people who work inside the Exchange building, today's activity included hundreds of print and broadcast journalists. Everyone was there, even Barry Nolan from 'Extra' who usually spends more time reporting on Liz Taylor's weight than on global terrorism. Many of us were able to pass the checkpoints and find our way past K-9 units into the boardroom of the Exchange, where we could watch the opening bell. Most, however, weren't as lucky. Hundreds of reporters stood behind barricades outside the building, snapping photos and begging passersby for a quick interview like paparazzi waiting for movie stars to walk up a red carpet that was now covered in cement dust.
"Almost no one who works on the trading floor would talk. So they turned to guys in suits who just might have something to say. Since I picked today to wear a tie for a change, I was asked six separate times for an interview, despite wearing my press badge. On three of those occasions, the reporter who had approached me then revealed that they were from another country (Italy, Sweden, France, Japan) and had no idea what the Dow was. Could I explain why the Fed is so important? What does AMR stand for? I found myself giving impromptu civics lessons to foreign correspondents.
"Perhaps the biggest civics lesson of all, however, was what was happening inside. After a brief speech from the Exchange's chairman, Dick Grasso ('Today, America goes back to business....') and a chilling rendition of 'God Bless America' during which floor brokers fought back tears as they hummed along, the bell rang at 9:33 a.m. and the market did what it does best. It worked. Outside the building, TV anchors all seemed to begin reports with the same lead about the American system threatening to topple over. Nothing could be further from the case. The system is intact, thank you very much. It doesn't really matter if stocks fall or rise in a single day. What matters is that the market is back to business." Amen, brother. Thanks, Dave.
Capitalism Al Saud... "HRH prince Alwaleed Bin Talal Bin Abdul Aziz al Saud, chairman of Kingdom Holding Company, [told Reuters] Monday September 17 that he has great confidence in the economy of the United States of America. The Saudi self-made billionaire businessman added, 'I believe over the next few days investors should refrain from selling. Panic is only going to hurt those who do not understand the mechanism of the U.S. economy. The American economy is solid and I am not selling anything. Years ago when I placed my confidence and hence my investment dollars in the U.S. stock market, I did not act emotionally. I am as confident now as I have always been that the economy of the United States of America can and will sustain any jitters.'
"Prince Alwaleed went on condemning the September 11 attacks: 'Such acts are heinous crimes and we condemn terrorism in all its forms. Terrorism is the weapon of cowards.' Reassuring, the royal Saudi businessman reiterated his confidence in the market, 'I will not sell any of my shares in any company!' "
Calling Oliver Stone... In the 1972 movie "The Hot Rock," Robert Redford plays a recently released convict who goes in on a caper to steal a diamond from a museum and return it to its rightful owner, a small African country. Everything gets all messed up and a hypnotist works her trade on a bank clerk to straighten things out. Remember the phrase the hypnotist uses? It's "Afghanistan Bananastand!!!" According to IMDB.com (which I love), Redford "goes on one nasty helicopter ride through midtown Manhattan (almost crashing into the Twin Towers as they are being built!)"
Apparently not EVERYTHING was so ducky across Wall St. land. From Larry: "Schwab's net trading was repeatedly 'hiccuping' and 'choking' on, apparently, volume of transactions. In the first hour after the opening today, I had many error messages at each step of an order process. Persisting and retrying got orders through, but it took many attempts and retries." Hey Larry what were you selling???.... Overheard somewhere: "Yeah we sure are making some computer salesman happy somewhere." (well that's good!).... Rumor, from a low-level source who says she was talking to a high-level source: That if stocks drop 10% or more (not sure if that's for today or over the course of this week or longer), four of the biggest investment firms without offices in the WTC will start buying stocks to prop up the Dow. Supposedly, they got together over the weekend to agree on this. Not sure at all how true this is, but kinda interesting...
"One thing I know for sure. My daughter is going to grow up in a different world than I did." -Brian Cashman, New York Yankees general manager. Where's my baseball? And Saturday college football. One major Wall Street player I spoke with was very upset with canceling the football games. "They had them with Kennedy," he said.
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