Guest Opinion: Do you feel fine?
The End of the World as We Know It
By Nipperty Slim
When the rubble is finally 'dozered, the bodies buried, and network television reluctantly returns to normal ad-packed programming, the American economy will count the cost - as a plus! This mortician logic is firmly rooted in the measurement of the national accounts, which treats all expenditure as equal - be they bills for 10k bodybags, multi-million dollar cruise missiles, or spanking new hospitals.
While the physical destruction is staggering, insurance costs alone are estimated at $NZ35 billion, rescue packages and the influx of said insurance money into New York and Washington is likely to fuel a construction boom. After the 1995 Kobe earthquake economic activity actually was higher in the city than it would have been had the 'quake not struck at all. Increased defense spending, and nationwide security upgrades is also likely to act as an immense fiscal stimulus on the US economy. As is always the case, crisis, disaster and war is good for the economy, if only in the short term. I call it the warped dividend.
The physical infrastructure may be rebuilt, but the economy is far greater than the sum of its tangible parts. The importance of confidence to markets, confidence that the future will bring continued conditions for prosperity, cannot be understated. The American stock exchange closed the Tuesday morning of the attack, and up until printing was planning to stay closed until Friday - the longest closure since World War One. Even Pearl Harbour didn't create this much panic. International markets, so dependent on American money and corporations, immediately panicked - dropping between four and twelve percent. While stabilising somewhat last Wednesday, most were closed, waiting for some sort of sign from Dow.
Consumer confidence is rattled. Shopping and borrowing money on credit cards (despite seven continuous quarters of interest rate drops) is likely to be the last thing on American minds. Furthermore, high-risk stocks, such as the high-tech NASDAQ index, are likely to face hemorrhaging, especially at the NASDAQ headquarters was one of the building to sustain significant collateral damage from the World Trade Center Destruction. With unemployment on the rise, and a public more concerned with stockpiling and saving than consuming, the overall effect on the economy, even including the warped dividend, is unclear.
So to sum up all of this mayhem, and show how an Arts degree can allow you to make money on the stock market, here's a new index of stocks that should prosper. American military action will spur increased defense demands, and Middle East oil will become rare, fuelling exploration efforts. Even in times of crisis, where most will lose money, pessimism can make it. Next week will bring an update on how this panned out. As printing, markets were still closed. Remember, investing in these stocks is not only hoping for war, but fueling it. Increased defense spending can only increase the pressure to put its outputs into action. Having said that, don't forget that value-free speculation is part of the Western way...
NIPPERTY SLIM PESSIMISM INDEX
BOEING CO : 43.46
GENERAL DYNAMICS : 75.97
LOCKHEED MARTIN CORP : 38.32
RAYTHEON COMPANY 24.85
NORTHROP GRUMMAN CORP : 81.94
BAE SYSTEMS PLC : 317
Despite Boeing losing four planes last week, and a generally slack period for domestic aviation, these companies are likely to be the vanguard of as possible American economic recovery as their products fulfil a public demand for security and justice cum vengeance.
BRITISH PETROLEUM : 49.52
EXXON MOBIL CORPORATION : 41.24
ROYAL DUTCH PETROLEUM CO. : 53.87
TEXACO INC. : 70.43
Oil is messy, non-renewable and tends to cause all sorts of international disputes. However in times of crisis oil is, like gold, a tangible asset. And with the Middle East about to explode, these companies may control most of the remaining oil reserves, and will redouble efforts to drill more holes into the earth to allow automobile use to continue unimpeded.
ARMOUR HOLDINGS INC. : 14.30
COMMAND SECURITY CORPORATION : 0.61
GUARDIAN INTERNATIONAL : 0.88
VICON INDUSTRIES INC. : 2.02
These companies supply police and private security weapons and uniforms, along with surveillance and security systems. Most of these companies are based in NYC. If paranoia is bankable, investment in these babies should be as safe as with the Central.
Interview with Joe Bubulia, ex-New Yorker
This morning I woke up, looked out into the harbour, the birds were singing, and looking at this scene of natural beauty, I had a call from one of my friends saying: "America is being attacked! The twin towers have been destroyed, passenger plane have been hijacked, the president and members of congress are in hiding, the Pentagon has been bombed", and to put that image together with the one I was looking at... it just created a deep sense of the unreal.
I was shocked - my brother works on Wall Street. He wasn't in the area at the time, but I had a number of friends who work in the financial district. Nothing about this surprised me, though. I was shock at the exact way this had happened, but there had been terrorist groups who had declared war on the US for decades, and after the Gulf War we really pissed off a lot of people and since then they've been out to get us. I'd always thought it was going to be some sort of mass chemical attack, or maybe even a nuclear attack, I never thought it'd be a hijacking-suicide attack on the World Trade Centre, nobody did.
There are all sorts of clichés of lost innocence that people are bouncing around right now, and unlike most clichés there are some truth to these. People feel a great deal less secure in New York right now, and I think in America as a whole. Friends I've talked to are expressing a great deal of shock as you can imagine, seeing these two symbols of New York crash to the ground in front of them was devastating and not knowing what will happen next will cause more fear.
In spite of my love for my country, I don't have full confidence in its leaders to react in an appropriate way. The anger frightens me, as much as the events themselves. I think it will be a vendetta, I think that the United States will respond with overwhelming force to this terrorist attack which was perpetrated, I think we'll see, largely by a few fringe rogue elements and a maybe few crucial Middle Eastern states. But I suspect that the counterattack will be nothing compared to what we've seen this week.
The early indications are that there is some Middle Eastern component in this attack, and I think that this can only be bad for peaceful Middle Easterners living in America. We've seen this before in the 1940s when Japanese Americans were rounded up and placed in camps after Pearl Harbour.
I think that this is the end of an era of relative peace and relative absence of terrorism on American soil... Because of the gravity of the situation, the people responsible for this crime should be punished. But it shouldn't be a wild lashing out.