September 11, eight years later: Wall Street must rebuild again
Eight years ago Friday, when two commercial airliners destroyed the World Trade Center, the message was clear. The U.S. had been attacked, yes -- but the heart of American capitalism, Wall Street, had been specifically targeted. The catastrophic destruction, the horrifying massacre, affected every major financial firm on Wall Street in the most personal and horrible way.In the aftermath of the carnage, Wall Street bounced back with a mighty resilience, rising from the ashes to get back to work -- as if to prove that terrorists could wound us grievously but could never defeat our economy or our way of life. In the face of the attacks, Wall Street's determination to rebuild itself mirrored the nation's unity and defiance.
The most severe loss of life that day occurred at Cantor Fitzgerald, the brokerage house that suffered hundreds of casualties. But there were other wrenching losses: money-management firm Fred Alger Management lost 35 of 55 employees from its New York office -- everyone present in the building -- when the 93rd floor of the North Tower was destroyed.
Eight years later, Wall Street has been transformed again by financial crisis and the worst U.S. recession in decades. There's obviously no comparison between the terrorist attacks and the financial meltdown -- each was unique, one in agonizing death and destruction, the other in jobs, pensions, and livelihoods. But as it did before, the financial world and the nation must again unify to emerge from a new and different challenge: to beat the recession and build a new financial system that can prevent, or at least withstand, the economic shocks that ruined several august institutions last year.
On Thursday, John Mack, paragon of the old order, stepped down as the CEO of Morgan Stanley. Mack presided over Morgan Stanley during the shocks that rocked the markets for the past 18 month, bringing the nation to the brink of economic disaster. Since then, the locus of economic power has shifted from Wall Street to Washington, as the Obama administration seeks to crack down on executive pay, reckless leverage, and other excesses of the crisis.
What finance and the government needs to display today is common sense. We've seen enough of the industry's perverse incentives and outrageous gambling in recent years. Let's reward good performance and top talent, but as millions are suffering financially, Wall Street must abandon the idea that it's a class above everyone else.
After nearly two years of economic winter, green shoots are starting to appear. Major market indices are up more than 30 percent from their March lows. Corporate earnings have begun to show signs of life. And the dizzying growth of unemployment seems to be slowing. Even so, rebuilding a Wall Street to replace the old order won't be easy or fast. Eight years ago, our nation witnessed an amazing unity, unprecedented during most of our lifetimes, in a time of grief, anger, and hope. Now we're hurting again, and we need to unify again, to direct our strength toward rebuilding our crippled economy and laying the groundwork for a fiscally responsible future.
Follow Sam Gustin, a reporter at DailyFinance, at twitter.com/samgustin
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Reader Comments (Page 1 of 1)
9-11-2009 @ 9:05PM
EManuel said...
A conservative media watchdog organization is demanding that the media reports President Obama's "lies, distortions, and exaggerations" delivered in his speech on healthcare reform Wednesday night.
The Media Research Center says President Barack Obama will not stop committing what it calls "serial dishonesty with the American people until the media expose his false figures and bogus exaggerations for what they are: fraudulent scare tactics." The group describes the president's Wednesday night speech about healthcare as "a litany of lies."
Rich Noyes, director of research at the MRC, says The Associated Press did do a fact check on his speech. "[The AP story suggests] that he uttered 'a variety of over simplifications and omissions,'" says Noyes. "He talked about how he would not add a single dime to the deficit, when the studies are showing it would add about a trillion dollars to the deficit over the second year of the plan. He talked about not permitting any illegal immigrant to be covered, when in fact it was Democrats who voted down any attempt to verify immigration status."
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9-11-2009 @ 4:26PM
Glenn Atias said...
You are in green shoot la la land. The market is a TARP-juiced casino. Trillions of dollars printed up and borrowed from future generations is being laundered by the banks into the market through the back door. It's this funny-money liquidity bubble that is puffing a market that is already way over valued. PEs are running > 100 all across the board - a historically high valuation, not based on any fundamentals, but based on the Fed blowing up yet another bubble.
The "better than expected" earnings were a sham. Revenues are down across the board, the "better than expected" earnings were a function of layoffs. A "green shoot" peeled directly out of the hide of the American people.
The real unemployment, the U6 number is over 16% and growing steadily. Foreclosures and bankruptcies are at record highs, income is plunging at a record pace.
All the jawing up of this fiasco of an economy won't make it better. So far we haven't addressed any of the debt imbalances, all we've done is blow up a giant bailout bubble to try and hide the pain of the housing bubble. And the situation on the ground continues to get worse and worse for the people, as the mainstream media continues to say "nothing to see here folks ... move along .. the great leader has it all figured out."
Not sure what green shoots you see, other than the ones that Bubble Blowing Ben Bernanke is smoking.
All we've done is more bubblenomics that got us into this mess to begin with. Idiocy like "clunkers" - coaxing people into destroying serviceable paid-for cars to exchange them for more debt. Ginning up auto sales by scrunching future demand into the present, all while creating more public and private debt - the same idiocy that get us into this mess to begin with.
There are no green shoots, just a government-juiced temporary sugar high, kicking the can of the depression down the road a bit.
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9-11-2009 @ 4:31PM
One better said...
YOU sir are entitled to YOUR opinion. But im sure YOU sir know what they say about opinions. They are like as*holes, everyone has one and some stink. Perhaps YOU should right the country for ALL of us..
9-11-2009 @ 4:31PM
Tech said...
911 the biggest crime in US history and GW Bush told you not to question it and tried to block ANY investigation? OK that should tell any but the most brain dead that it wasn't what they said on the boob tube. That ground will remain the haunted ashes of America as we thought we knew it forever and the turning point in a once great nation. Like the Kennedy assasination maybe someday people will have the courgage to talk about it although with your own research you can figure out the gist of it anyway. Last stand of the old oil banksters who run America, but China got the best oil field in Iraq with BP and Nippon Oil of Japan got the next best one. See they are worried about our dollar as they hold the most and wanted some real stuff for the Walmart goodies. I doubt that America will recover from the 911 fiasco the biggest most horrendous mistake these boys made. As to the BS about Bin Laden? Oh please! The two planes bringing down the three towers into dust at freefall speed? Oh please! Or, go back to sleep and Hollywood Insider is coming on and Britney's new boobs should keep us thinking. Ooops, time to head down to Walmart and check out the latest Chinese Communist? Googies!
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9-11-2009 @ 8:49PM
Glenn Atias said...
Mr. Blue,
Of course everyone has a right to their opinion. Although they don't have a right to express it everywhere and anywhere, so I'm grateful to the blog owner for letting me express a differing opinion. Some people just delete comment they disagree with, and so I appreciate that this blog allows dissent.
In that spirit, I invite you to come to mine and disagree with me until your heart's content:
http://hot-ashes-for-trees.blogspot.com/
As far as the a-holes thing, don't know what to say except that obviously some opinions will be proven totally incorrect by events. So if in 6 months we're in an unfettered economic boom and never look back, then obviously my opinions will have been proven dead wrong. But I figure it's better to lay on the line what I believe, it may all get proven wrong, but at least I called it like I saw it at the time.
As far as me righting the whole country - I wouldn't presume. I do think that we're running our financials as one giant generational ponzi scheme and that this is a big mistake. But I don't believe I've ever said I have every answer for everything, because God knows I certainly do not.
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9-12-2009 @ 12:17AM
NTAC said...
i think everyone that reads this and believes it has lost their mind.... wall street is evil and corrupt. it has nothing to do with rebuilding after 9/11. finance is built upon exaggeration and lies. what that has to do with rebuilding lower manhattan is beyond me.
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