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September 11 one year on Tuesday, 10 September, 2002, 11:40 GMT 12:40 UK
New York recovery

  • Click here to read the transcript


    One year on from the World Trade Center attacks we hosted a live forum from the heart of New York's financial and business community.

    We explored the impact of 11 September on the markets and the businesses which depend on them.

    We looked at the financial plight of bereaved families and dependants - and asked what needs to be done to make sure that all are compensated fairly for the loss of their loved ones.

    Our panel included Brett Redfearn, a senior vice president of the American stock exchange, which in the past 12 months has seen some of the wildest fluctuations in US stock market history.

    We were also joined by Stephen Evans, BBC New York business correspondent who was in the WTC on the day of the attacks, and Neil Smith, a business consultant who has been advising companies who have been re-structuring their businesses post the attacks.

    They answered a selection of your questions LIVE from Ground Zero on Monday 9 September.

    A video recording of the forum will appear here shortly.


    Transcript


    Newshost:

    Hello, I'm Peter Gould and welcome to this BBC Interactive forum which is coming to you today from the American Stock Exchange in New York City.

    This week, the United States will be marking the first anniversary of the events of September 11th. Today we're going to be answering your questions about the financial markets and the extent to which business has recovered after what's been a very turbulent year. We'll also be considering the issue of compensation for the families of those who died in the terrorist attacks.

    I'm joined first of all by Stephen Evans, our business correspondent in New York who was at the World Trade Center on September 11th and by Brett Redfearn, a senior vice-president here at the American Stock Exchange.

    Brett, can I start by asking you first of all to try and sum up the mood for us one year on. How is it in the markets at the moment?


    Brett Redfearn:

    It's really been an interesting time. At the beginning there were a lot of impact specifically from 9/11. I think since the last several months, we've seen that a lot of other things are affecting the markets now - the accounting scandals and a lot of other things have really had a dramatic impact on the markets.

    I really don't feel the impact of 9/11 over the markets too much aside from the fact that some people are still getting reassurance from things like the Homelands Security Act and I think that also people are getting some assurance just from the fact that things seem to have stabilised.

    The war on Iraq still holds a few things out there that people are watching and that's somewhat connected but aside from that things are getting back to the normal market conditions.


    Newshost:

    I suppose the first thing we should say is that the Stock Exchange here was affected at a very personal level by the events of September 11th.


    Brett Redfearn:

    Absolutely, that's a very important issue for us here. The overwhelming feeling here at the exchange is that it's a year ago we lost 10 members from our floor. A number of people in the securities industries it had a very dramatic impact on them. We all lost a lot of friends and colleagues. So the number one thing that's really going on right now are people remembering their friends and colleagues and reflecting back on that time for them.


    Newshost:

    Steve, you report on business here in the States and in New York. It's really been a bit of a roller coaster ride for the markets since September 11th hasn't it?


    Stephen Evans:

    Absolutely. Strangely when I was here on September 11th last year, it was to interview an economist to say is this economy going into recession, are things changing, is the climate changing. And we now know that the climate has changed with a vengeance. Partly because of the psychology that September 11th engendered. But also partly and I think probably more so because of the real economy and the fact there was all that investment at the end of the 1990s - those cable networks were laid and there had to be some kind of readjustment and we are going through that readjustment with a vengeance.


    Newshost:

    We've got a number of e-mails about the markets and what's been happening over the past few months. One from Thomas G, UK: Have the recent troubles in the markets only been related to the World Trade Center attacks or have there been other factors which need to be considered too?


    Brett Redfearn:

    Yes, this is what I was getting at before. I think initially that was a very big impact on the market place. But since then a lot of other big things have happened this year. We've all seen what has happened with the accounting scandals and all of these issues that being resolved by the securities and exchange commission right now, to the extent that those issues are addressed, I can tell they'll have a very positive impact on the market. This week there's going to a lot people remembering what was going on and I think again with what was happening with the potential war in Iraq such a big thing on people's minds right now - that's a factor. But apart from that, I think in many respects, we've moved past a lot of the initial concerns.


    Newshost:

    Steve, even before the attacks, the economy was going through a sticky patch, or heading into one.


    Stephen Evans:

    I think of it in terms of - if you can imagine when they built the railways in Britain in the 19th century, or in India later than that. If you build a railways network, you have huge investment, you have steelworks created, you have food production increased - people get sucked in just for the job of work as you build the network. And that really happened at the end of 1990s with telecommunications. Once you've built that network, you can't build it again, it's there. There has to be a readjustment, you don't need the steelworks, perhaps you don't need the food production to the same extent as people get dispersed throughout the economy. You've had your big spurt of real growth, real improvement in real people's lives and there has to be a readjustment and that's happening here as well.

    Now there are also psychological factors to do with bubbles that have then burst. It was in the head a bit but it was also real things in the real economy and it was real improvements for lots and lots of people. Economic growth at a phenomenal rate which meant growth in the production of food, medicine - all the things that we want - it was an improvement in the real economy.


    Newshost:

    Chris Ryan, New York: Will the threat of us going to war with Iraq, only make business and the markets more unstable? Surely the only industry to benefit will be the military weapons production companies.


    Brett Redfern:

    That's always a tough one to answer. The war economy, if we do go down that road, definitely creates a certain level of uncertainty. There are certain stocks that benefit and certain stocks that don't. But ultimately, if this is something that starts to improve the sense of security overall, it may be something that's more beneficial in the long term.


    Newshost:

    Tommy, Leicester, UK: How much financially do you think companies lost in the World Trade Center?

    There've been all sorts of estimates - we've heard figures only in the past few days saying that the impact on New York could be $95 billion - staggering figures.


    Stephen Evans:

    I never quite trust those figures. The city itself reckons, $73 billion is the knock to the city itself - jobs have gone. I never quite understand how you can separate those figures from figures to do with recession generally.

    It's clear that there was a huge cost to this city just in terms of the buildings and the office space that had to be moved and the relocation of effort, either across the water to New Jersey, or across the water to London in some cases. There was a psychological knock. You had the effect of people not wanting to fly here and spend money here. There is absolutely no doubt that this city took a knock and it will take some recovery. There is Federal money on the way - it will take years to come through. I wouldn't put a figure on it. I simply know that it was a real effect.


    Newshost:

    I think one of the figures which came out in the past few days was suggesting that as many as 83,000 jobs could have been lost.


    Stephen Evans:

    Sure that's from the city's controller and who am I to doubt him. As I say, I don't trust journalist usually - and I'm as guilty as anybody - who try and put figures on these big events because there are so many different factors at work. It's very, very hard to say, that's the actual cost - you can't put that price tag on it. What we can say is - it is substantial.


    Newshost:

    You mentioned the psychological impact of all this. There's a question from Kate Green, Glasgow, UK who wants to know: I would like to ask Mr Evans how he felt about staying on in New York after the attack? Did he ever think about returning to the UK?


    Stephen Evans:

    Not at all, no. This is not journalistic soft soap - though it sounds like it but it's not actually. It was a genuine privilege to be here to watch the way people - the old world was solidarity but it wasn't solidarity of the city - it was civic pride. People changed in lots of rather heart-warming ways. Now I never thought of leaving. I know an awful lot of people did leave. An awful lot of people just found the atmosphere too depressing, particularly in the area around here. People did leave but I think people are coming back. Rents in this area for living accommodation have gone down a bit and that may help matters. Personally I never thought of leaving though people did.


    Newshost:

    We're joined by Neil Smith, a business adviser, who helps large companies to improve their performance. Post September 11th, what kind of problems are you being asked to advise on? What kind of difficulties are companies facing?


    Neil Smith:

    Post September 11th, there wasn't, funnily enough, that large an impact - the Stock Market dropped dramatically but companies weren't really changing their profitability, apart from select industries. The tourism industry, the airline industry - those industries were hit particularly hard and the insurance industry of course. But other industries weren't hit quite as hard. So CEOs didn't suffer as much apart from those industries after September 11th as they did with the subsequent events.


    Newshost:

    But on the issue of what happens here in New York City and the fact that some companies may now be moving out. There's uncertainty about whether some will come back. Do you think that one year on there is still a lot of uncertainty within the business community here?


    Neil Smith:

    What you are finding is a fairly strange and interesting trend. People don't plan ahead as much and you actually see this in the airline industry. So for example, when you came over from London, you probably thought that the airline was full but if you check a month out, it's wide open. You also see it on Broadway. Whereas you can't get a ticket for tomorrow, you can get any ticket you want a month from now. So the sort of planning ahead type of activity that has stopped. The confidence to plan ahead was there before, it's not there now.


    Newshost:

    Liz Ulsworth, Singapore: Has the attitudes of big business changed post-September 11th? Has business become more compassionate or is there even more pressure to make money? Does business have a heart?


    Neil Smith:

    I think that in New York, as Steve mentioned, immediately in the aftermath of 9/11 and I think you'll see it this week, there's a lot of compassion - not just in New York but in the United States and throughout the world. But I actually think that's probably a short-term phenomenon. I think in the United States, the demand to make money for the shareholders is as strong now as it ever was. I think it's more challenging to do it now and I think that will introduce changes in behaviour. But I think the actual underlying demand to do it is there as strong as ever.


    Stephen Evans:

    What will have changed behaviour won't be the attacks on September 11th but it will have been the scandals since and the changes in the law and I think there is a changing climate there. I don't know what Neil thinks about that but there's no doubt there is a different climate here because of Enron and all the ones that followed it. They will change their behaviour, apart from anything, because the law will be different.


    Newshost:

    So that could have as much, if not more of an impact on the way business is done here in the long-term?


    Stephen Evans:

    Sure. I can remember a columnist from the New York Times saying slightly tongue-in-cheek, saying that at the end of the day he thought effect of scandal of Enron might actually be greater than the effect of September 11th in the ways in which behaviour is changed.

    My own view is, if you think of the fall of the Berlin Wall, Communism was routed, capitalism had won. There was no doubt about it and there was then something of an uncritical embrace of business. It was business in a grand term. I think that what the scandals have now done is that people have started to think about what kind of business do we want, what kind of regulations do we want, how heavy should the hand of government be. So a political debate - an ideological debate about the role of business and the role of government has been opened up by these scandals in the last six months.


    Newshost:

    In terms of the impact of 9/ll, obviously a huge personal impact on the whole financial community here. But also hasn't it been very damaging in terms of all the experience that's been lost in some of these major companies? Does that create problems?


    Neil Smith:

    In many ways it will create problems for specific companies. Cantor Fitzgerald will never be the same again. Keith Bruyette, which is a banking company, will never be the same again. But in terms of experience lost as a whole, it probably won't have a marked effect. In fact I agree very much with what Steve is saying. The biggest impact actually on the economy this year wasn't from 9/11 surprisingly enough. I think 9/11 may, in hindsight, be used as an excuse for all sorts of changes that are happening in the economy.

    By the way, there are still time bombs ticking in the economy. The Stock Market has come down dramatically, pension funds are dramatically under-funded and the crisis this year, I suspect, is going to be a lack of funds in pensions crisis.


    Stephen Evans:

    There are ways as well in which companies learnt after September 11th. A lot of companies moved very quickly - very, very quickly that day their operations to London, across the water - competing companies shared their facilities initially. So I think they learnt how unwedded they needed to be to this particular bit of land. I suspect that some companies learnt how mobile their operations can be and that may have effects in the future.


    Newshost:

    Let's move on to the issue of compensation. An e-mail from Imran in England: What efforts has big business made to help compensate the families of those lost? Was the Stock Exchange, for example, involved in raising funds for the families of those who died? How much of an effort has there been to help the families within the business community itself?


    Stephen Evans:

    It will vary between companies, but a lot of companies have set up funds for the families of those who died. There have been debates - there was a debate with Cantor Fitzgerald particularly. Cantor Fitzgerald - this was the company that lost the most people - something like 600+ of its employees in the North Tower and there was a debate about the abruptness with which the company adjusted the pay of its employees afterwards and there was very bad publicity and it then shifted very, very rapidly to put funds in place to make sure that the bereaved were cared for. Different companies have made different arrangements obviously but there are funds set up.


    Neil Smith :

    I actually think that in the longer term, very few of the dependents from 9/11 will be left wanting or needy in any way. I think there are two things - the first thing is the speed with which things are happening and I think it is considerably slower than one would anticipate. There were literally millions of dollars raised privately for those families and whether or not those dollars even now are actually reaching the families, I think is an issue. So I think people will be looking very closely at the systems that are in place when a disaster like this occurs to actually get the funds out to the families very quickly.

    But as Steve mentioned, there's an undertone - even if you take a look at Cantor Fitzgerald, it was very popular to criticise Cantor Fitzgerald at the time when they weren't making funds available. But if you talk to Cantor Fitzgerald employees now - which the press are not picking up on - every couple of weeks or so, each one of those employees will get a call from the CEO of Cantor Fitzgerald to see how they're doing and whether there's anything they actually need. That piece of it is not being picked up on. So the support is beginning to be put in place.


    Stephen Evans:

    My suspicion is that if you're the relative of somebody who died in employment with a big company in the World Trade Center, your chances of being well looked after are probably quite great. My suspicion is if you were a freelance - a self-employed cleaner on the roof - or somebody not working there - your chances are less so.


    Newshost:

    That leads into a question we've had from Roma, California, who says: Who wants to know if there is too much emphasis placed on raising money for the fire-fighters' families and not enough perhaps for other people like the immigrant workers in the buildings, security men, janitors, waiters etc. Has enough been done across the board to cover everyone involved in what happened on September 11th?


    Stephen Evans:

    Obviously if you're employer was a big profitable company with arrangements in place for the death of employees, well then you're much better off than if you are working for a small company or for yourself hiring yourself out each day. But there are federal funds available. I don't know the detail of how those things break down between employees in different circumstances but my suspicion is that no government agency is going to want, at the end of the day, to be accused by the widow of somebody who died of leaving them drowned in the drink, as it were. Now there are different circumstances for different people. But I'd be very surprised if people aren't cared for - people who were directly affected, people whose relatives died in those attacks.


    Newshost:

    Miranda Jeffers, Florida, USA: Is the Stock Exchange concerned about the results of oil-based politics? Would any attack on Iraq not make things on the markets more unstable?

    It's the Iraq question again. Is this going to be a factor now in what happens here?


    Neil Smith:

    I think it absolutely has to be a factor and a very big factor. If we get into anything near war with Iraq, the economic circumstances are going to be dramatic and dramatically bad. President Bush in the last year has already transformed a profit in which he was giving tax back to the taxpayers at a rate of $600 per person into a deficit and war with Iraq will only take money out of the economy.


    Stephen Evans:

    That by the way is the two stars of Sex in the City who are about to open the Exchange - much more important than us.


    Newshost:

    As Steve says, two of the stars from the TV series, Sex in the City, are here to ring the bells and that's exciting a great deal of interest on the trading floor as you might imagine.

    That's just about all we have time for today. So thank you to all our guests - Stephen Evans, Neil Smith and Brett Redfearn of the American Stock Exchange.


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