The banks, brokerage firms and businesses that were also the victims of last week's cowardly terrorist assault represent the agents for a vast universe of investors.
But the strength and resiliency of our markets depend less on the brokers, bankers and advisers who populate that remarkable community than on the confidence of millions of investors who trust a system that is fair, transparent and liquid.
Systemic confidence doesn't make markets rise and it doesn't make markets fall. It makes markets possible. As the bell rings to reopen trading on the New York Stock Exchange today, investors have every reason to believe that America's financial system is not only sound, but fueled ever more by an optimism and ingenuity that defines what it is to be American.
As a former head of a large Wall Street firm and stock exchange, I am sympathetic to those who advocate opening our markets as quickly as possible. In the past, the industry functioned seamlessly in the face of war, adverse weather and political turbulence.
The long-held assumption that market closings are destabilizing has validity. It is certainly desirable to do everything possible to keep our markets open, but any chance of systemic failure would be calamitous to the historic trust upon which our markets rely. Industry leaders and regulators have acted wisely to delay opening the markets until they are certain that communications, personnel and the system, as a whole, operated flawlessly.
Certainly the physical damage to New York's financial district is reason enough to defer the opening. Add that to the fear, uncertainty and emotional turbulence during the days following the attack and I believe investor interests were well served by this measured delay.
No one knows with certainty how these events will play out in our economy and in our markets. My guess is that the natural political and citizen resolve catalyzed by this disaster will result in stimulative economic and fiscal policies.
Ultimately, the actions of the Federal Reserve Board represent the most effective response to such a cataclysm.
Chairman Alan Greenspan and the board have sent the right signals and their words and deeds reassured US citizens.
Political paralysis over the issues of taxes, deficits, and spending vanished in the face of consensus commitments to do whatever is necessary to protect America from terrorist assaults.
Certainly the country will experience economic dislocations during the months ahead. Will these events plunge us into a deep and long-lasting recession? I very much doubt it.
My bet is that a committed leadership combined with the right monetary and economic policies and a truly national resolve will play out in terms of a market environment more constructive than we might have thought possible only a few days ago.
There may be wild cards we don't know about yet. But my advice to investors would be not to sell into this market.
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