Financial community attempts to calm customers, one another

By Deborah Crowe, and Roger Harris, Ventura County Star. Sept. 12, 2001

Tuesday was numbing for the Ventura County financial community as it attempted to calm clients and comfort each other as the World Trade Center disaster unfolded.

The World Trade Center is a few blocks from the New York Stock Exchange in the area known as the Financial District. Many of the nation’s investment firms have at least some of their operations in New York’s financial district and the physical and emotional wreckage could limit their ability to restart quickly.

As much as anything the apparent loss of a “large number of knowledgeable and experienced” businesspeople who worked in the twin towers will have a lingering effect on world business, said William Irion, owner of Irion Enterprises, a Santa Paula consulting firm that does business in Japan, China and elsewhere.

“That is the major trade center in the world, after all, and those buildings are gone and who knows how many people are dead,” Irion said.

Replacing that lost business experience will not be easy, Irion said.

“This affects people in every country of the world because so much global business flows through that center in New York,” he said.

Although the terrorist attacks brought the stock market to a standstill, S.R. Nair, president of International Technologies Network Inc., a Thousand Oaks consulting firm that helps companies do business in China and Turkey, said the economy will not be permanently damaged.

“I don’t think there will be a long-term effect on trade,” Nair said. “The economy will recover.”

Although similar disasters have caused brief downturns in the market, no one really knows what investors already battered by the stock market retreat will do when the markets reopen.

“We’ve been told to expect the markets to remain closed for the rest of the week, and maybe that’s a good idea,” said broker MaryAnne Barber at the Oxnard office of A.G. Edwards, which has its headquarters in St. Louis. She was keeping one eye on on the TV and news Web sites throughout the day as she took calls.

Barber said she was thankful she didn’t know of any friends or colleagues who would have been in the World Trade Center complex at the time.

“But I feel so sorry for the people at Dean Witter,” she said. Around 3,500 people working for Morgan Stanley Dean Witter’s individual investor services were based in the World Trade Center.

A man answering the phone at Dean Witter’s Oxnard office declined to talk about the event. “It would be inappropriate to comment now,” he said.

Queens native Patrick Montes, a broker at Westlake Village-based Peregrine Financial Group, once worked at the Trade Center. He was worried not only about former colleagues but also some family members who worked across the street from the complex. He was relieved when he learned that his cousins had not yet arrived at work when the attacks began and that their bus was turned away from the disaster area by police.

“I’m devastated,” Montes said. “This was my neighborhood. This was where I worked and lived for nine years. I feel personally attacked, in a way.”

Montes isn’t so sure that closing the markets for several days is the best idea.

“An extended market close could be dangerous because there may be a pent-up demand to sell,” Montes said. “It could be like a thousand people trying to get out one door. It also sends the wrong message to the terrorists, that by doing this they’ve been able to control our markets.”

Tom Whitney, a commodities specialist at Peregrine, believes vulnerability over the attack will compound the worries of investors already concerned about the economy.

“There likely will be a flight to quality, to safe havens, ” said Whitney, noting that the price of gold spiked in the few minutes the market was open before the attack.

“There’s no way that it’s prudent, ethical or even possible to be trading for a day or two,” said Ventura financial planner Steve Wagner. “Maybe closing for the week will give people a chance to calm down and think through what they want to do.

“Past events suggest that a disaster like this will send the markets down for a while,” said Camarillo financial planner Stan Harley, author of the Harley Market Letter. “I have been saying that we were very close to a market low before this happened, but this will delay an upturn for a while.”

Both Harley and Whitney noted that Monday after-hours trading and the overnight world markets suggested that Tuesday otherwise should have been good day for the U.S. markets.

Britain’s stock market, the FTSE, was undergoing a rally led by telecom and drug stocks just minutes before the first attack. It ended the day down 287.7 points, its worst one-day decline since the October 1987 global stock market crash.

“If the European markets are stable by next Monday, our markets may stabilize some,” said Harley, advising investors to keep an eye on the FTSE, the temper of which the Dow often tracks. “More often than not, the FTSE leads the Dow.”

“I would caution people to step back and look at the bigger picture,” Harley said.

In the Tokyo market, the first to open today after the attack, stocks plunged below the key 10,000-point mark for the first time in 17 years. In early trading, the benchmark 225-issue Nikkei Stock Average fell 685.33 points, or 6.66 percent, to 9,607 points.

A number of local retailers closed their doors Tuesday following the attacks. Pacific View mall in Ventura, The Oaks mall in Thousand Oaks and Camarillo Premium Outlets were among the major retail centers in Ventura County that shut their doors and sent employees home.

“We made that decision as a group with our merchants,” said Becky Bresson, general manager of The Oaks. “We wanted to be sensitive to people’s feelings at a time like this.”

The malls and outlet center all were closed prior to 10 a.m., the normal opening time. A handful of shoppers were waiting for stores to open. A few “mall walkers” were exercising at Pacific View when the decision was made to close the Ventura mall.

“Everyone understood and everyone went home,” said Alice Love, Pacific View’s marketing director. As of late Tuesday, it was unknown if the malls and outlet center would be open today.

Every day that the malls and outlet center are closed costs local governments thousands of dollars in lost sales tax revenue. The Oaks, Pacific View and Camarillo Premium Outlets all have more than 120 stores that attract thousands of shoppers every day.

Though some of its New York facilities were damaged, Verizon did not have any major disruption in its network. The company did, however, experience a high volume of telephone calls into and out of the New York and Washington, D.C. areas. The Verizon Emergency Operations Center in Thousand Oaks is on high security alert, according to a spokeswoman. Adding to the day’s confusion, the Verizon call center in Oxnard was evacuated for part of the day following a bomb threat.

The public’s desire to keep up with the latest news developments tested local Internet companies’ communication networks. VCNet in Camarillo, ISWest in Westlake Village and dock.net in Camarillo all reported a significant increase in traffic on their Internet servers.

“All of the news (Web) sites are getting a lot of traffic,” said dock.net executive Bill Harrel. “All of the sites with streaming video you can hardly get to. We’re also getting a lot of calls from customers who are traveling who want to get our nationwide phone numbers so they can get online from the hotel rooms or wherever.”

The grounding of aircraft across the nation affected overnight package delivery and contributed to cancellation of West Coast events with out-of-town participants.

The Banc of America Securities Annual Investment Conference in San Francisco, running this week, has been cancelled until further notice. The conference invites hedge fund managers and executives to hear presentations from top executives of dozens of companies. The parent company, Bank of America, had offices on at least four floors of the trade center’s North Tower, according to an online office directory.

The business school at the University of California, Los Angeles will go ahead today with its quarterly Anderson Forecast Conference, which will include an economic forecast for the nation and the state, as well as speakers on “Innovation and Investment in the Post Dot-Com World.”

— Deborah Crowe’s e-mail address is dcrowe@insidevc.com.

— Roger Harris’ address

is harris@insidevc.com. ©Ventura County Star

September 12, 2001