11:36 AM
Wall Street Post- 9/11: The Financial Crisis Strikes Where Terrorists Failed
Wall Street firms were too big for terrorists to rock. But 10 years after 9/11, it is safe to say that mortgage-backed securities struck right where hijackers failed: at the heart of the U.S's financial system.
In the immediate aftermath of 9/11, New York's economy agonizingly slowed. According to the City of New York's Comptroller's office, in the last quarter of 2001, New York's economy shrunk, first by just one percent and then by the first months of 2002, by 4% a quarter.
The economy carried on shrinking for another two years when, finally, it bounced back. By 2004, the city's economy was growing again by almost 5% every quarter.
An article on the BBC's website highlights that these days, America is suffering from the fallout of a recession much worse than anything in the terrible immediate aftermath of the bright and sunny Tuesday morning New York woke up to 10 years ago.
Still, some economists see a connection between 9/11 and the financial crisis which struck the U.S. in 2008.
From the BBC:
"America's economy rebounded much more quickly after 9/11 than it has from the financial crisis.Al Qaeda's attacks could only have a limited, direct impact on the economy, but there was a fear that the indirect effect on the all-important animal spirits of US capitalism could be devastating.
The Federal Reserve was particularly alert to this danger.
So it is that as the economy faltered after 9/11, the Fed started cutting interest rates and kept on lowering them for another two years.
A serious economic downturn never materialized, so possibly the Fed's approach worked.
But years and years of low interest rates - "easy money" as economists would say - provided a necessary prerequisite for a housing boom on an unprecedented scale.
A boom and terrible bust have certainly followed, as has the near-collapse of the same financial sector that was apparently so immune to the terrorists' violence.
If Wall Street still dominates the US economy, it does so in part because American taxpayers have propped it up."
Let's just hope that the Obama Administration can somehow quickly redress the economy and avoid the looming threat of a double-dip recession.
And here's hoping too that the economic recovery will have as much vigor as it did after that fateful morning of September 11.
Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio