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Some traders were panicking to lose positions that now looked hopelessly exposed, while others were trying to make the most of the opportunity.

On the morning of September 11 2001, I was on the trading floor in London. The US market had just opened when, one by one, my colleagues began to stand and stare at the TV screens above the foreign-exchange trading desk. Something had hit the World Trade Center. It looked like a small private plane making a terrible flight error.

Soon after, it became clear that a commercial airliner had hit the first tower, and another aircraft had just hit the other one. I called home, and around me I could hear my colleagues talking to their family members, telling them to switch on the TV.

Others were frantically trying to get through to their Wall Street brokers – especially those at Cantor Fitzgerald, which occupied four floors in the twin towers; and Carr Futures, the derivatives broking arm of our employer, Crédit Agricole Indosuez, which was on the 92nd floor of the north tower.

At the time, nobody had any idea who or what was under attack, let alone who or what the attacker was. But I remember feeling an acute sense of threat, wondering about essential things that would be required if the financial system collapsed. Cash and water, I remember thinking.

The New York Stock Exchange did not open that day, but that was irrelevant for us in the foreign exchange and interest-rate derivatives markets. Since the financial deregulation and technological changes in the 1980s, our markets had exploded in turnover and size. Banks took an increasing amount of risk, but these markets had little regulatory oversight and no circuit breaks (a system for temporarily halting trading during a panic). So regardless of what was happening, the show had to go on.

Panicked trading

Over the following hours, trading became like a game of musical chairs where traders were either afraid and desperate to eliminate risk, blood-hungry to take advantage of an extraordinary situation or a combination thereof. Quite a few were trying to put bets on an imminent interest rate cut by the Federal Reserve – a textbook move in times of crisis because it’s a way of stimulating the economy.

Soon, however, traders realised that this strategy was doomed to fail. If people were hoarding bottles of water or cans of food in New York or London, nobody would be prepared to lend short-term cash. So the herd moved the other way.

The frenzied trading went on unabated until a senior manager stood up and announced that it had to stop. I was relieved as our job had become uncomfortably inappropriate considering the events that were unfolding. I had been turning over billions of dollars during those hours. I think I made money for the bank that day, but in honesty it is a bit of a blur.

One by one, banks took a unilateral and hitherto unheard-of decision to withdraw from trading. We were simply told to go home. I switched off my computer screens and squawk boxes (the intercom systems used on trading floors), noting that they were still flashing like Christmas trees. Not all traders in the market had received the same instructions, and they were more eager than ever to buy or sell. I left the trading floor amid a noise of unanswered telephone calls.

The war on terror was launched within days, but normal trading routines had more or less resumed by then. Initially, however, not a day went by without a rumour flying around that a suspect package had been found at London’s Liverpool Street station, that a plane had gone missing or that George W. Bush had been assassinated. Terror attacks became “events” that could be incorporated into spreadsheets, and trades were put on that would pay off in case of an attack, particularly on Fridays. In theory, there was a higher probability of an attack during any given weekend than, say, on any randomly chosen Tuesday.

What it taught us

Looking back at this tragic event, most of us remained relatively calm and controlled throughout the chaos that unfolded. Nobody walked out in tears, which probably would have been a normal emotional reaction given how many of the victims were work colleagues, competitors or otherwise closely connected to the industry.

Sure, there have been many disasters, crises and events before and after 9/11 that have triggered chaos in the financial markets: Black Monday, Y2K, Lehman Brothers, the eurozone sovereign debt crisis, COVID-19, to name just a few. More often than not, traders have been forced to put their emotions aside to focus on the job at hand.

However, I think 9/11 was more than that. It was a day when it became possible to bet on or against human lives, and financial markets instinctively embraced terror as just another market-moving event. It offered a glimpse into the kind of society we could have if traders were encouraged to ignore their moral compass in the search for profits. On the trading floor, it was a day when rationality was at war with humanity, and humanity lost.

The Conversation

Alexis Stenfors does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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