Executives, Web Sites Calm Frayed Nerves
September 17, 2001
A statement posted on the Vanguard Group's Web site said that the company's chairman John Brennan told CNBC that Vanguard had received "many calls" from investors who wanted to know if their money is safe. Brennan sought to reassure them through the statement that, indeed, it was.
"Clearly, nothing quite like these incidents has occurred before," the statement reads. "But this nation, its people and its financial markets have overcome many challenging events in the past ..."
The statement continued: "Despite the human toll of Tuesday's events, and despite the huge costs of recovering from them, the enormous power and productivity of the U.S. economy is intact. Our people, our economy and our markets have proven their resiliency over and over again."
In a letter to investors, Scudder president Thomas Bruns said: "This blow strikes personally close to home, as many of the victims were our colleagues in the financial services industry."
In addition, Bruns assured investors that "our investment, research and management capabilities are fully intact and ready to serve you when the markets reopen." And he continued: "Your records are completely safe and were not affected by the destruction in New York."
Most Difficult Commentary
Dr. Robert Froehlich, well-known Scudder portfolio manager and vice chairman of investment strategy, said in a statement he called "the most difficult market commentary that I have ever written" that consumer confidence is likely to decline in the weeks ahead and that people are likely to spend more time watching television for the up-to-the-minute than they are spending money on goods and services.
"If consumer confidence falls," he wrote, "so will consumer spending in the United States. If this occurs, we could see a global trade slowdown as well. ...One of the most important wild cards... is the Federal Reserve Board. If consumer confidence falls, I look to the Fed to ride to the rescue, aggressively cutting interest rates to improve confidence and spending."
Despite that glum scenario, Froehlich said markets are unlikely to be affected in the long term. "I do not believe [the disaster] changes the fundamental of our market," he wrote. "And while yesterday's tragic events caused two landmarks--both World Trade Center towers--to come crashing down, it will not cause our markets to crash."
Business As Usual
The Web page at Fidelity Investments assured investors that the company would continue nationwide operations and investors would have access to their funds. The company said, however, that all market orders placed after 4 p.m. Sept. 10 would be cancelled and that investors "may enter limit orders to buy or sell securities" and that those orders would be executed as soon as possible after markets reopen.
Many other financial Web sites simply took note of the market's closure. On some, the usual zig-zagging graphs showing index and other market performance were eerily flat line, illustrating all too poignantly the screeching halt of the financial industry.
And a statement from American Century assured investors that the company would make no rash decisions with its investors' money. "As money managers, we aren't inclined to make sudden investment moves in reaction to these kinds of tragic national events," the statement said.
The Web sites of other firms, meanwhile, were starkly without recognition of the disaster. If there was a response on the sites of J.P. Morgan Chase and its subsidiaries, for example, it was nowhere easily accessed by the average investor. Instead, there were the usual links to prospectuses and promotional information, a note about a company-sponsored art exhibit, and other information about philanthropies and community groups the company supports.