The disaster has not taken place: the financial heart of the Western world has started again. But serious stock exchange losses: - 7.13% for the Dow Jones. Let’s review the Web about this very dangerous reopening.
Wall Street, for the reopening after the dramatic events in New York, has lost ground. A lot of ground: -7.13% for the Dow Jones under the level of 9.000 points and - 6.83% for the Nasdaq. In terms of points, it’s even the heaviest fall of the Dow Jones in the history. But Wall Street has started again, people haven’t gone panic and the stock exchange loss is nothing compared to the extreme seriousness of what has happened.
The Financial Times insists on the amount of losses of American marketplaces, in spite of the surprising action of the American Federal Reserve which has cut the federal funds rate by half a point ("Wall Street sharply lower despite Fed rate cut"). But the British daily adds that the European marketplaces which have been hit last week are getting better since the fall of Wall Street has not been as enormous as what was expected.
La Tribune of September 18th dedicates a file to this historical reopening of Wall Street. A very dangerous day marked by another exceptional fact: the joined decrease of the interest rate of the American Federal Reserve and of the European Central Bank. FED and ECB have thus confirmed the will of monetary authorities to break the risk of a recession. Under the general title "Fed et BCE se liguent contre la récession", several articles comment the session of September 18th and the rescuing operations of authorities.
La Tribune reviews a session marked by the fall of airline companies, insurance groups and the rise of companies linked to the defence. The economic daily also insists on the will of monetary authorities not to add a terrible financial crisis to a dramatic human drama. Thus, the surprising decrease of interest rates of the Federal Reserve (- 0.50%), followed by the same kind of decrease of the ECB rate (European Central Bank) has confirmed the will of monetary authorities to break the risk of a recession”.
Near $700 billion of stock exchange capitalisation disappear in one day. The financial shock to go through is colossal. A figure gives us the amount of money which is in stake: by one single stock exchange order, near $700 billion have disappeared on Monday. The New York Times notes that this start has been made with record exchange volumes, - 2.3 billion titles for the sole NYSE. The article "On a Day Without Precedent, Bad Numbers Still Felt Good" also gives an analysis of various American indexes and of their reaction to the shock.
But there is also a question everybody has in mind: will we be able to avoid the recession which was already underground before September 11th ? The New York Times says no. after the attacks, it risks to get worse. However, the national jump that has been noticed could make it shorter.
Le Monde tackles this theme. Laurent Mauduit in "Entre récession et rebond, le sort de l'économie mondiale se joue à Manhattan" gives two possible scenarios. The “black one”, which seems to be the most likely to happen, is the “slow krach” of before September 11th getting worse. The very low moral of households could fasten the stock exchange fall and could result in a severe effect of “negative richness”. The “pink scenario” requires a different reaction by American households with a national reflex which would aim at rebuilding what has been destroyed. A jump after the shock should result in this boost of the American economy that Europe have been hoping since several months.