September 11 effects on the economy
- Mark Densel
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September 11 effects on the economy
13 years ago a terrorist act destroyed the world trade center in New York, the attacks killed almost 3000 people and the damages cost approximately 10 billion. Today, after 13 years we wish to talk and explain the economic effect of such a dreadful event.
Let us go back to the events of that day and see the effects minute by minute
After the first plane crashed into the World Trade Center's North Tower, The opening of the New York Stock Exchange (NYSE) was immediately delayed, after the second plane crashed into the south tower the trading for the day was canceled. NASDAQ canceled trading as well.
Following those events the New York stock exchange was fully evacuated and nearly all the banks in the close area and other financial institutions, not only in New York but also in other cities across the USA.
London stock Exchange and many other stocks exchanges worldwide closed down and evacuated worried from more similar terrorist attacks. NYSE remained closed until the following Monday, the United States bond market also stopped and could not be trade, The New York Mercantile Exchange was also closed for a week after the attacks.
Federal Reserve kept open in order to meet liquidity needs, followed by adding $100 Billion in liquidity per day for a time period of 3 days after the attack, to help prevent a financial crisis.
Currencies and Commodities effects
Gold: the price spiked up from $215.50 to $287 (when the USD is weak the Gold goes up)
Oil: spiked up
Gas: prices in the United States also briefly shot up, though the spike in prices lasted only about one week.
Currencies: United States dollar falling sharply against the Euro (EUR/USD up), British pound (GBP/USD up), and Japanese yen (USD/JPY down).
World markets aftermath
The next day, European stock markets fell sharply, including declines of 4.6% in Spain, 8.5% in Germany,[2] and 5.7% on the London Stock Exchange.[7] Stocks in the Latin American markets also plunged, with a 9.2% drop in Brazil, 5.2% drop in Argentina, and 5.6% decline in Mexico, before trading was halted.[2]
Stocks and other effects
The private sector was also affected and very hard, companies that couldn’t work lost money and public companies also dropped in their share price. We can see major losses in the insurance industry, Airlines and Aviation, Tourism income, and Security firms (following the attacks the US government, among other sectors in the US, diverted a big percent of budget and money flow to strengthen security).
In New York City, approximately 430,000 jobs were lost and there were $2.8 billion in lost wages over the three months following the 9/11 attacks. The economic effects were mainly focused on the city's export economy sectors.
The 9/11 attacks have paved the road to the Afghanistan war witch cost surpassed $5 trillion.
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Last year on October 22nd 2013th gold rise fast due to the beginning of the festival. This year it is expected to do the same.
Lets understand what’s going on
