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The day after.
While we mourn our friends, acquaintances and
colleagues our duty is to understand what will be the impact of yesterday’s
tragedy on the financial markets. This major event could mark a shift away from
America’s heavy reliance on technology and have tremendous consequences on the
way America function on the way.
Firstly the failure of American intelligence is
obvious. American intelligence relies heavily on signals intelligence (SIGINT).
Signals intelligence includes any intelligence collected from intercepted
communications, such as microwave, landlines secret writing, or electromagnetic
emanations (e.g., foreign radar signals or telemetry from an object of
intelligence interest.) This strategy has clearly shown its limits
in fighting terrorism, which is likely to be the war of the future.
Secondly, the “Star War” pet project of president
Bush has been proved today to be a dream that would be unable to protect the
American population from terrorists attacks. Again high tech and huge amount of
taxpayers’ money is of little help to fight determined terrorist.
Thirdly, we all go through metal detectors and
X-Ray machines before boarding aircrafts. Yet fanatics have been able to smuggle
weapons in order to highjack several airplanes.
As for the World Trade center itself, it may look
as another failure of technology. It was planned to stand a 707 crash. The fact
that the World Trade Center has been targeted twice is no coincidence. To gather
so many people in the same place was an accident waiting to happen. The fact
that the technology did exist to build it should not have been a reason good
enough to do it. Again there was a huge amount of money spent and a naive belief
in technology.
Yesterday’s tragedy may lead the American people to
reassess its belief in technology.
A very possible consequence of yesterday’s horror
may be a continuous slide on the technology laden Nasdaq index. All the stock
indices will suffer , as whole sectors of the economy will be hurt: financial
services of course (some of them head-quartered in the World Trade Center, other
had their back offices), airlines, hotels etc. but the Nasdaq is likely to
suffer the most. In last week’s newsletter (see our web site <FONT
face=Arial size=2>http://www.alterama.com)
we were forecasting a drop of the S&P500 to 930, an objective that we might
reach sooner than we thought. As for the Nasdaq 100, we reiterate the objective
of 1,100 that we stated several times in 2001.
Jean Jacques ChenierAlternative Asset
Management, Inc.Tel: 646 840 0385E-mail: <A
href="mailto:JChenier@xxxxxxxxxxxx";><FONT face=Arial
size=2>JChenier@xxxxxxxxxxxx
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