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Terror and Markets: Minyans Respond


"The Brits have shown their legendary 'Stiff upper Lip' and resolve! Stay strong!"



As a Brit who grew up during the IRA bombing campaigns in the 70's and 80's and whose home town of Warrington was bombed with the loss of two kids, I don't believe that this terrible atrocity will have a long term change on the British psyche (and the UK markets) like September 11th did here in the US.

Apart from the blitz, London has had bombs go off in '73, '74 ,'75 ,'76 ,'82 ,'83 ,'90 ,'92 ,'93 ,'96 and 2001 with people killed / injured in most of them. That is apart from all the other bombs that went off throughout the rest of UK and Ireland.

It doesn't make the horror any more bearable, the disgust less intense. The senseless loss of life to a terrorist bomb is not something that gets easier to deal with the more frequently it happens. However the shock factor "how could this happen here?" will be absent.

Most of the British working population grew up with bomb scares and near misses. The predominate emotions of my family and friends in the UK are sadness for the victims, disgust at the perpetrators, surprise that it took so long after September 11th for the UK to be hit and relief that it is not a higher death toll.

If this is the work of Al Qaeda, the only long-term impact this barbaric act will be on those poor people directly affected by losing friends, family or their health. However, I do believe there will be more impact if it is the work of a new IRA splinter group as that would be UK specific threat vs a global one.

Minyan LM


Tremendous email, LM. I'm flattered that you would take the time to share your personal experiences and thoughts.


The fact of the matter is if you look back at the long history of event risks outside of primarily financial ones [unexpected insolvency, future earnings miss, fraud, what have you] most events one thinks would spell doom for the markets have had the opposite effect.

Example? Kennedy assassinated. Market impact? Atter a tough morning stocks bolted higher and didn't look back for 5 years. 9/11? yes, tough slogging initially, then a very large, long and uncut run [though soon to be proved wrong] in the market until early 2002.

That said, market events of this type [opening into a vacuum] generally [for a trade anyway] should be bought. And I'd argue the bears did just that; then covered this morning and early into the afternoon. the proof [or not] of that will come tomorrow and over the next few days.

Longer term? Let's consider that we are actually near a peak of bullish market and consumer sentiment. In prior tragedies the events in question came in rough markets with 'depleted hope' not 'excess' bullish hope. It is precisely the absence of worry here, regardless of catalyst [names excepted] that ought to have folks taking a breath. We have the unusual situation as well with a potentially rough earnings season ahead and little cover being taken. As a betting man (and if one plays markets one is, no matter what) I'd say the odds favor boo in the mid-term.

The near term could be rather bumpy.

Minyan B McC

Minyan B-

I don't know about market participants being "betting (men or women), no matter what". In fact, I'd put a unit on an under of fewer than 75% of traders regarding themselves as "betting types".

But don't forget the 5 point spread.

Regarding your examples, it's an interesting bit of market trivia that the market reacted to Kennedy's assassination before the event was reported by the media. Remember, this was well before the days of cell phones, webcasts etc.

Efficient market enthusiasts like to use that day as evidence of efficiency. I think they are confusing speed for efficient, but that's another note.

Hi Jeff:

I really enjoy your contributions to MV. Thanks for them.

What do you think about the idea that Alan & Co. or other unnamed central bankers provided ample liquidity to keep the markets afloat today? A possibility or did big money bargain hunting save the day? You gotta admire the resilience or this market or at least ask, WT[Heck]?

Minyan JP

BTW, Jessica Simpson smacks your hollaback girl - it's not even close...unless we rank by SAT scores.


I have no idea whether or not any Fed Heads, anywhere, provided liquidity yesterday. As I've said before, if the Fed didn't have the suspicion of manipulation working for them they'd make up their own ghost stories.

Said another way, regardless of whether the Fed was lurking in an Evil lair, injecting liquidity, yesterday or if they spent the day playing their annual Elmer Open tennis tournament, the perception was that they were poised to stop the rate hiking (or even ease, in the case of the UK) now that terrorism was back in the picture.

If traders respect the idea of a liquidity dump enough to try to buy in front of it, Federal Reserves don't really need any actual manipulating.

We'll address The Sound of one hand clapping in our next mail bag. In the meantime, please understand this: I respect your right to have an opinion on Boots vs. Hollaback but you are wrong.


I assume you will get a number of complaints about being heartless and calculating in the midst of human tragedy. Let me express my appreciation in counterpoint to those complaints.

I am a market newbie and I don't know what to think about the day's events (in the market) until I get it interpreted by an investment professional like you. This interpretation will always sound heartless and calculating, even, in your case, when it is not. But, the interpretation is a required function of the Minyanville professors and it is greatly appreciated, even when the motivation is misinterpreted.


Minyan PK


I appreciate the thoughts but you are sort of undermining my reputation for unadulterated evil. The last time that happened Collins spent a whole weekend in the trunk of my car.

For the record, I get a lot more emails like yours ("I like you but I can understand how others would want to see you caged") than I get notes telling me I'm horrible. But I'm working on it.

In that vein I want to make one thing clear: I didn't drive Todd-O back to the airport when he left, either.

More sincerely, thanks to all the Minyans who wrote in! I welcome any follow-on thoughts or general emails HERE.

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