Keith, I’m not
convinced that Americans tourists in particular will shun the historical ambience
and cultural kinship with Britain.
For example, almost immediately after 9/11, a group of several hundred
from Portland, Oregon led a 3-day trip to NYC in a symbolic gesture to affirm
economic support as well as demonstrate unity. Then Mayor Vera Katz, a native
New Yorker whose parents fled the Holocaust, led the goodwill brigade. A
prominent travel bureau booked the flights and hotel bookings. Press coverage
was lavishly encouraging, as was the heartfelt response of New Yorkers.
Americans are
back traveling at rates comparable to those before 9/11, as attested by swollen
lines at airports and hotel bookings made via the internet. Travel has changed,
as we all know, but I suspect very few who traveled for pleasure in the past
will refuse to now. Likewise, the greatest impediment to corporate travel has
been expense and justifying long distance commutes when video conferencing was
becoming a viable option.
My guess is
that the routes between American headquarters and their Indian and Chinese
branch offices will not go idle, and neither will the traffic to the British
Isles or EU for that matter, as cut rate travel is the name of the game today,
not luxury class. The 2012 Olympics are far enough off that only a persistent
Northern Ireland situation would jeopardize that project. I was skeptical about
the games in Greece, but they didn’t seem to suffer despite proximity to
troubled geography.
For the
sometimes inexplicable human nature, recall what happened after the Christmas
tsunami in Indonesia; a week later beaches were filling up as Scandinavians
kept their snow-weary travel plans and Aussies took a cheap weekend break.
I hope that
financial institutions will carefully weigh the moving costs and symbolism of
relocating to ‘safer’ areas. Like
the ‘bounce’ for Bush’s War that we will surely see temporarily, we should
expect rational risk managers to weigh all options and some pessimism to
prevail. But after all, in the age of suitcase bombs and suicide bombers, what
area is safe?
Among other mysteries,
I’m interested in an AP news item bylined from Jerusalem that just before the attacks, Scotland Yard
warned the Israeli Embassy that they’d received warnings of an attack and this
prompted Bibi Netanayahu not to leave his hotel in London for a conference in
another hotel, that as it turns out, sits above one of the tube stations
targeted. The news story cited large numbers of Israelis living and traveling
in London at this time of year, so that may be one segment of the tourist trade
which will reconsider their travel plans. What they might do with their
banking, I have no idea. But remember, here, too, that Wall Street was closed
for several weeks and eventually made a rebound, though at great cost. I’m more
concerned about where the Chinese and diaspora Chinese are banking.
I suspect that
Scotland Yard and Parliament will now undergo the same ‘shock and awed’
experience the CIA, FBI and Congress were subjected to, and I sincerely hope
with better results. Good police work and intel will restore confidence in
government’s ability to protect, as well as rational – and trusted - foreign
policy that doesn’t incite terrorism.
Karen
757.
A trivial attack could now bring the UK low
Today's article in The Observer concerning
the near shut-down of the City of London as a consequence of the terrorist
attack on Thursday reinforces the political danger that Blair is now in.
Three days ago at the G8 Conference, Blair was vying to lead the world on
matters of aid to Africa and global warming. He had also come back victorious
from Singapore with the London Olympic Games under his belt. In two months'
time, as President of the European Union, he could have enjoyed telling the
French and the Germans how to run their countries. Diplomatically, of course.
Today he faces the distinct possibility that by far the greatest chunk of the
UK's foreign earnings -- from the financial services of the City of London
-- will start to decline as hundreds of foreign banks and finance houses
decide to relocate to safer places elsewhere. The country will also lose a
large chunk of earnings for several years from foreign tourists -- particularly
high-spending Americans. Shortly, a meeting of the International Olympics
Committee might decide to relocate the 2012 Games elsewhere.
Some of the above is likely already. All of it is certain if there is another
attack similar to the one of three days ago. It is difficult to imagine that
the person or group that perpetrated the attack realised just what huge effects
the bombs would have had other than just horror. Or perhaps that's because we
patronise terrorists and imagine that they're not intelligent. Nevertheless, that
has what has happened and the political and economic repercussions of it are
only now becoming clearer.
The UK Foreign Office, the Ministry of Defence, the senior General Staff of our
Defence forces, 50-odd retired Middle East diplomats of great experience and
the vast majority of the intelligentsia of this country were opposed to the
invasion of Iraq, just as were the CIA and the State Department in America.
Among other things, what they said was that if America and Britain invaded Iraq
then it would only increase international terrorism that first started in the
repressed population of Saudi Arabia and was the fundamental cause of 9/11.
Their voices were stifled or simply ignored and Blair went ahead by frightening
the House of Commons and the more credulous of the population with lies about
British people being liable to be attacked with weapons of mass destruction
within 45 minutes. How utterly absurd it all sounds now, and yet he and
Geoffrey Hoon, the Defence Minister, went ahead with Bush, and a reluctant Jack
Straw, the Foreign Secretary, to his permanent disgrace, allowed himself to be
dragged along with it. In the process Bush and Blair have possibly damaged the
United Nations Organisation beyond repair, too. The UN is no great shakes and
badly needs reform but treating it with contempt is no way to go about it.
Well, Blair has made his bed and he'll have to lie on it now. Top of the world
one minute, in deepest trouble the next. If Blair continues to take no notice
of that part of the British population that actually thinks about serious
matters and is concerned about them, then he'll have to start taking notice of
those powerful businesses that actually create the profits and incomes on which
government taxation depends. These voices will be heard privately. We'll have
no knowledge of their conversations in the media.
If one single -- even trivial -- bomb attack takes place in the near future in
London then the economic consequences will be immeasurable. So far, Tony Blair
hasn't said a single word about withdrawing, or not withdrawing, British troops
from Iraq. And the reason why he is silent so far is that he has now got to try
and find the words or the method by which troops will be withdrawn in a way
which is, apparently, nothing to do with our invasion of Iraq or its byproduct,
the London terrorist attack.
Keith Hudson
<<<<
TOTAL CITY SHUTDOWN WAS MINUTES AWAY
Bank of England to cut rates and boost confidence after bombs
Richard Wachman and Heather Stewart
A tripartite committee consisting of officials from the Treasury, the Bank of
England and the chief City watchdog, the Financial Services Authority,
considered shutting down the City after the bomb attacks in central London on
Thursday.
Members of the secretive committee, chaired by Andrew Large, deputy chairman of
the Bank of England, held conference calls during the morning when London share
prices were plummeting, wiping billions of pounds off the value of London's
leading companies.
The committee feared that panic by shareholders and a breakdown of
communications between clients and bank dealing rooms could have led to the
creation of a false and disorderly market, jeopardising financial stability.
On the advice of the committee, the London Stock Exchange has powers to order
the suspension of all trading, in much the same way as activity on Wall Street
was halted on 9/11.
But as it became clear that the attacks were not on a scale that many had
feared, and that the main banking and broking centres in Canary Wharf were unaffected,
the committee decided to take no action.
Observers say that the committee became most concerned when UBS, the Swiss bank
whose offices are near Liverpool Street station, the site of one of the
explosions, briefly evacuated its trading floor, while LCH.Clearnet, which
settles stock market and commodity trades, evacuated its office near Aldgate.
The tripartite committee's powers are advisory, but in the event of a
devastating external attack its recommendations would normally be acted on by
individual market regulators and government agencies. Rob McIvor, a spokesman
for the FSA, told The Observer 'The tripartite committee did not meet, but its
members did confer by phone with each other regularly during the day and also
with the major City firms in the afternoon.'
Last year the tripartite committee carried out a market-wide exercise to test
the financial system's resilience to threats such as terrorist attacks.
Meanwhile, the Bank of England is set to slash interest rates to boost business
and consumer confidence, which was faltering even before the terrorist
outrages.
Digby Jones, director-general of the CBI, says the Bank of England should move
urgently to cut rates and shore up wobbly consumer confidence in the wake of
the bomb attacks. 'I am very disappointed with the Bank, that they didn't cut
on Thursday. I think all the ingredients for needing this are there. I think a
little bit of stimulation of the economy in the light of this assault would be
good.'
The CBI had already demanded a quarter-point reduction in borrowing costs to
put a floor under declining consumer spending, but Jones said last week's
events strengthened his view that a cut is necessary.
Analysts are widely predicting a reduction in interest rates at next month's
meeting of the Bank's Monetary Policy Committee, as the housing market slowdown
continues to sap confidence and consumer spending. David Brown, chief UK
economist at Bear Sterns, said 'We are not in robust shape right now. Consumer
and business sentiment remains weak.'
Roger Bootle, economic adviser to Deloitte and Touche, who believes rates will
be slashed to 3.5 per cent by the middle of next year, said the housing market
has been crucial to the sharp slowdown in growth since the beginning of the
year. 'The consumer data is very soft and I think the housing market had an
awful lot to do with that.'
The Observer -- 10 July 2005
>>>>
