Reply #5: Very interesting!! Here's an article comparing 9/11 and 7/7 Markets

[spooked]

http://www.gfn.com/features/story.php?sid=17186&slid=18...

Terrorism, Risk and the Markets
July 10, 2005

Returning to the markets and their reaction to September 11, 2001 versus July 7, 2005, Markets are built to finance future economic growth. The value of the market is a calculus that combines myriad factors, primarily a company’s current and future earnings. One of the major determining factors of future earnings is risk.

Thus, risk will be priced into a stock’s value long before an event occurs. This is precisely what the market has done with terrorism. The market knows the terrorist threat, so when something horrible happens, market actors no longer overreact as they did the week after September 11.

The capital markets are working so efficiently that when Greenspan called his British and European counterparts regarding whether the three central banks should intervene, the decision was to let the markets function since no liquidity problem existed. In short, the terrorists are losing.

They strike at our economic organs thinking that this will cause financial crisis, but the markets already have anticipated their moves. They have lost their most powerful weapon—economic terrorism.



So, thanks to Greenspan, no liquidity problem existed!!! AND this author doesn't know just how true his statement is..."the markets have anticipated their moves."