No one feels like making money on Wall Street these days. That’s an amazing statement, given that making money is the only reason you go to Wall Street to begin with. The pulse of the place always put you in the mood to coin cash, right from the moment you got out of the cab, beat it through the Holland Tunnel, or jumped out of the 4 or 5 on Broadway. The jam-packedness, the sense of all-business-all-the-time, the breathless hustle – that’s what made Wall Street so gloriously special. When I forsook midtown for downtown two decades ago, I did it because of the relentless cadence that stopped for nothing non-cash-related, except maybe a woman’s emergency hosiery run to Century 21 or a trip to Brooks Brothers after some errant lunchtime spill annihilated that Hermès tie your wife got you for Christmas.
That’s all gone now. I didn’t know how gone until I was sitting on a Jersey pier last week, waiting for a ferry, staring at the gap-toothed frown of lower Manhattan as smoke drifted up from the blank space where those two gleaming front teeth used to stand … before they were punched out so surgically two weeks ago. By 6 a.m., the World Trade Center was crawling with activity, but it was the wrong kind of activity: vain search-and-rescue bustle instead of people racking up commissions on stocks and bonds.
Everything else was eerily quiet and, I might add, antiseptic, the usual and comfortable grime had been power-washed off, along with the four inches of gray dust that had stuck fast to everything. Welcome to the Wall Street Museum, I half expected the guard to say to me at 100 Wall Street. We used to trade and do business and make money here. Right here in these gleaming buildings, before the apocalypse.
But the guard said nothing. Because he was a National Guard. In camouflage fatigues and those new helmets that up close really do look like something from the Wehrmacht.
A jackhammer kicked into gear, and everyone around me did double-takes in horror. Was it another one? Another plane flying too close? There was a time when we would talk louder over the noise; now we just hoped no one saw how scared a little hammering made us. A flatbed eighteen-wheeler rumbled by, the only traffic, and on it was a twelve-inch-thick girder twisted like a Mueller’s noodle by an inferno some 500 degrees hotter than the one at the mill that made it straight in the first place. Steel pasta. No tomato sauce.
And all of these people were walking by me with surgical masks, making me feel like some sort of risk-taker for breathing the air that still stank like fried plastic. The guards in my building, who have known me for years, now make me sign a book and show my license. There, take that, you Taliban-backer! You won’t get into this building with an out-of-state license, unless it’s from Jersey. Still, I guess it’s better than nothing.
The stocks fit the mood of Downtown. Barren and sad and profitless and painful.
Sure, we got the exchange up and running, and the herculean effort restored faith inthe system, in the elements of commerce. But there was nothing to buy.
Most of the time, after a big decline like the one we’ve been having all through 2001, you get an event of such egregious significance that the wise men among us say, “See, now I know why we were selling off all along; the market knew well ahead of the big bad event.” The market seemed to know about the Kennedy assassination minutes before the rest of the country, and the oil-service stocks knew to rally back in 1990, telegraphing the Iraqi invasion of Kuwait.
This time, though, the market has been going down for eighteen months, and the towers of terror have simply given us one more reason to sell everything that isn’t nailed down. A four-day respite from trading, the longest since the Bosch battled the French in Flanders Fields, brought only sellers, not buyers, as peoplem suspected that the bull, wounded by months of selling, was now ready for the final carving.
And who can blame them? The folks who have kept the balls in the air for so long, perhaps much longer than they should have, were busy trying to figure out where they should report to. Like so many soldiers overrun on the battlefield, they straggled back to other companies’ headquarters hoping to find remnants of their units. Most didn’t.
After taking my own break for a couple of days – coached some soccer, even read an actual book, Ghost Soldiers – I almost felt renewed. I had turned the TV off. Just didn’t want to watch anymore. But once back in the old office, with the screen frozen on some e-mail saying, “We haven’t heard from you, are you okay,” and a Rolodex open to a now-dead employee of Keefe Bruyette, I quickly fell back into the funk that engulfed me the week before. At first, I still really believed that patriotic buyers had a shot at routing the doomsayers, and sure enough, the big sellers did seem to take a break the first day back. But the mood on the Street, like the acrid air, was just too grim. By the end of the week, the sellers and short-sellers were back in force, and the patriots had run out of ammo. We’ve had two phony rallies since the tragedy, one of 100 points on Tuesday and another of 300 points on Wednesday, and both yielded immediately to more selling, as if the market gods were saying, “Don’t even think about it. We aren’t through with you yet.”
It was touching how, as the week began, everyone wanted to reassure everyone else. But secretly they couldn’t help feeling that after terror struck once, it could strike again, and no one wanted to commit good capital after bad. We are in the business of making odds on stocks, and until September 11 the odds would shift because of changes in mundane macro data like consumer price indices, unemployment reports, and purchasing managers’ data – easy variables in retrospect. But how do you game suicide attackers? How does Disney fare in a holy war? Better than Boeing? Worse than Carnival Cruise?
We haven’t considered balance sheets of companies in years. They don’t matter much in good times. In bad times, however, they are all that matters, except for insurance. (There’s a wild card no one’s considered since the world’s most expensive disaster: Has the cost of insuring a business gotten so great so fast that the business isn’t worth operating? How many companies can cope with a world where insurance equals operating profit, or exceeds it, as will be the case for some carriers?)
So now we all try to talk about long-term prospects. Forget the short-term, focus on the long-term, we tell you, as you suffer a financial beating that makes the long-term strictly a question of whether you will ever get back to even in this lifetime. Don’t worry about the losses. Relax. Take the good with the bad. As if somehow you have the theoretical edge over those who have been selling and locking in profits all year. Amazingly, the same bad advice – stay fully invested, especially in tech – is still just as bad post-September 11! But the charlatans proselytizing this position have a whole new reason – patriotism – to double up or average down. But as one old salt who knows better told me, “If they want to be patriotic, tell them to buy flags, not stocks.”
There were plenty of people who believed, right up to the instant those airplanes crashed into the towers, that the economy was on the verge of turning. Hedge-fund friends of mine were taking the stocks of cell-phone-makers and networkers, two of the hardest-hit groups of 2001, the moment before impact, having just been pleasantly surprised by the first good news out of Nokia in a year. But now, a 50-basis-point cut on Federal Funds, something that would have sent the markets soaring 500 points in normal times, simply breaks the market’s thousand-point fall into three awful days instead of one vicious session.
So the stocks fit the mood of downtown. They are barren and sad and profitless and painful. They fit perfectly into the new smoldering, traffic-less landscape. They are so not where the action is.
When will things return to normal? That’s what everyone keeps asking. And if someone can’t come up with a good answer soon – some reason to hope – then this new world will become the norm. We on Wall Street love analogies. They are our friendly, historical guides. They tell us how the movie ended last time we saw this plot. No one, however, can think of an analogy that fits. No one can figure out how things play out positively. Cuban Missile Crisis? Nope, nobody got killed. Gulf War? Once the battle began, you knew it was over. For the first time, we have no analogies. For now, we would be satisfied with a return to the bustle, to that glorious din that existed two weeks ago. Maybe then we could find our footing. Right now it’s just too darned quiet for me to think.
Maybe, though, just maybe, I am too close to this story. All my indicators tell me that you have to buy, not sell – too many bears, too many people capitulating, too many funds redeeming, too many people heading one way – and my wife, the Trading Goddess, didn’t put the discipline trumps conviction Post-It on my Bloomberg machine for nothing. So I am going against my own gloom and putting money to work in some solid blue chips – Chevron, General Electric, United Technologies, Bank of America – even if they currently seem to be saying that we will never return to any sort of normalcy.
And I am leaving this ghost town early, back to Jersey to lead a practice of 10-year-old girls, the Summit Charge, before our big first game, against South Mountain at Memorial Field. I need a dose of laughter, of spirit, and of, well, September 10. I’ll get it there long before I get it down here again.