The actions of the extremists often say — since “Demons” Dostoevsky — in a psychological way. But terrorist acts there is a material dimension: it is expressed in the profit and loss of companies, the prices of oil and other raw materials, percentage fluctuations in stock prices, the number of endangered or additional jobs, etc.
In September, remembering the 2001 attacks in America and the apartment bombings in Russia in 1999. But the terrorists, figuratively speaking, all year round — September: trains in Madrid were bombed in March 2004, subway cars and a bus in London in July 2005, terrorist attacks on different targets in the Indian city of Mumbai were held in November 2008, at the Boston marathon in April 2013, on the waterfront in nice in July 2016…
These and other bloody actions of fanatics have one thing in common (apart from the desire of terrorists to kill as many people as possible, not excluding myself) — the panic they cause among investors, stock traders, business owners, as well as among ordinary retail consumers. In a disaster situation, which may be followed by another disaster, all the actors of the economy are beginning to think in terms of “black day” for which you need to “pinch a penny”.
A collapse would be total, if not for the brakes.
When Arab terrorists hijacked Airliners crashed into the twin towers of the world trade center, the Dow Jones (average stock value of 30 of the largest companies in the world) on the new York stock exchange fell by 684 points, or 7.1 percent of such a collapse of quotations in the history. September 11, 2001 on the calendar was a Tuesday. When on Friday, the 14th, summed up the results of a trading five-day week, they also proved to be a record: for the week the Dow Jones flew down to 1370 points, or more than 14%. The broader market index Standard and Poor’s (it represents the average value of the stock of the 500 largest companies) “lost” is 11.6%.
In one week (the first day which was normal, and four — catastrophic) investors lost $1.4 trillion. Especially strongly fallen in price shares of airlines and other corporations associated with travel and also with the insurance business: many companies have lost 30% of its market value or more. These losses would be even greater, if the day of 9/11 trading was not stopped: in exceptional cases it happens, we have to include the brakes.
Stock markets always react to a decline of major terrorist attacks, whether in the United States, Russia, India, France or anywhere else. But, unfortunately, terrorist attacks every year is the exchange reaction is dulled and quotes it is not so scary fall, and the decline lasts not so long. In 2001, the Dow Jones lost 7.1 per cent, but from 2001 to 2016, the index rose from 10 000 to 18 000 points — 80%! People get used to anything, including in the world of Finance…
Much the same is happening with oil prices on the commodity exchanges. Each new major terrorist attack — and they are particularly common in the main oil larder of the world, the middle East pushes the price of “black gold” up for fear of supply interruption. Soon, however, prices again go down: traders remember that the world oversupply of oil and demand is weak due to anemic growth in the world economy; they also begin to calculate that any reduction in supply from the middle East region will be immediately offset by an increase in oil production in North America (it’s full of abandoned wells that are just waiting in the wings).
There are, however, disturbing the skeptics type Yergin Daniel, an expert on energy consulting and information firm IHS: he claims that the middle East could plunge into chaos because of the reluctance of the West to seriously interfere with the course of events to destroy ISIS, al-Qaida and other extremist organizations banned in Russia and other countries), which in recent years gained considerable strength. And then oil prices will quickly go beyond the limit of $100 per barrel and will rise further.
Exchange invincible: whatever happens in the world, there will always be speculators, so that the change of decay soon to come rise. Much worse is the situation in the real economy: it suffered greatly from terrorist attacks and slowly recovering. According to estimates Professor of Economics, Stanford University Nicholas bloom, the September 2001 attacks knocked out of the US economy 1 million jobs, and the volume of business investment relative to GDP fell to its lowest level in 19 years.
The American economy is the largest in the world (1/4 of global GDP), and it is actually self-sufficient: its dependence on foreign trade is minimal. Is not Turkey or Egypt, which is critically dependent on foreign tourism. For 15 years, the GDP of the us grew by 80%, and the average American family more than doubled — 110%. But even America has suffered significant economic damage: the need to spend astronomical sums on national security and the insurance impact on productivity and growth. The “war against terror” as it is called politically correct George W. Bush, beginning in December 2001, is still ongoing, and it has cost $4 trillion (of this amount, only 5% are directly related to the September 11 attacks). Because of this war the U.S. national debt has increased by 20%.
But even more devastating consequences brought low interest rates that the Federal reserve (the Central Bank), the United States was forced to use to avoid a deep recession (the recession was already under way when the attacks of 9/11). The fed lowered its base rate from 3.5% to 1% and kept it at that level for three years. On cheap loans the economy began to overheat, and the housing market thanks to cheap mortgage giant inflated bubble that began to burst in late 2007. When it burst, broke the “great recession” of 2008-2009, and the fed lowered interest rates to zero, where it is, in fact, is still (there was only one increase of a quarter percent at the end of last year).
Since the beginning of the XXI century the number of people killed in terrorist attacks has increased nine times — 3329 in 2000 to 32 685 in 2014 (in 2015, the terrorists took the life of only slightly less — 28 328). Approximately the same proportion (even more — 10 times) has grown over the years, the price at which terrorism costs the world economy. To calculate the losses from the slowdown in the economy is hard enough, but the direct losses from the attacks — easy: in 2014, they amounted to $52.9 billion is Very much terrorism affects foreign direct investment, for example, in Nigeria in 2010 when he reached the peak of the terrorist activities of Boko Haram, foreign investment fell by almost a third.
Well, when the economy of any country is built on the only cornerstone of foreign tourism, there are sometimes missing one notable attack, in order to plunge it into crisis. For example, it happened with Egypt, after Sinai province launched a terrorist cell associated with ISIS: the number of tourists fell from 14 million in 2010 to 9.3 million in 2015. And when over the Sinai Peninsula was shot down Russian passenger plane (31 October 2015), tourism has fallen by 40%.
India — a much more successful country than Egypt, with a large and diversified economy, but it has hard. For the last 27 years in India have been 136 terrorist attacks, which killed more than 2,000 people. To protect the country with a population of 1.3 billion requires huge financial resources which are lacking. The separate headache of the government — vulnerable to robbers, pirates and “ideological” terrorists Maritime transport, with which almost all the foreign trade of India.
War is not a mother, but sometimes helps
Forbes magazine in late 2015, after the November terrorist attacks in Paris, wrote about the “fragility of the European economy, as well as the institutions of the European Union”, which aggravate the attacks. Indeed, the post-crisis recovery in Europe is barely, it imposed political problems of refugees, and now with the release of the EU the UK; terrorist attacks in Belgium, France, Germany and other countries — the last nail in the coffin of the bright European perspective.
This is also the article says Liz Alderman in The New York Times: she writes that in France reservation of hotels just flew to hell — especially after following the Paris and Brussels terrorists “were” on the promenade des Anglais in nice. A mass event cancelled due to fears of terrorist attacks. Retail trade suffers from lack of clientele.
The costs of providing security, the journalist writes, is enormous: the entrance to city beach on the banks of the Seine in Paris is guarded by more than a dozen police officers, the river is constantly patrolled by soldiers, “it costs the taxpayer a million euros a day.”
But as they say, “to whom war and to whom mother is native”: the sum of military expenditure in the world in 2015, made up (excluding intelligence and counterintelligence, police and other law enforcement agencies) of $1.6 trillion, of which the US accounted for 37%. On military spending, Russia joined the top five — it is on the fourth place after USA, China and Saudi Arabia before the UK. With regard to other law enforcement agencies for ensuring safety, the appropriation to them of the United States — out of reach champion: the share of America account for 70% of the world’s spending on these needs. It is estimated that 44% of the cost of the security Agency, not part of the armed forces, used to combating terrorism.
America is often said that its astronomical costs, no matter what it was caused by poor organization, mismanagement and corruption (there are cases when the contracts for the security forces not handed out on a competitive basis, and those who need — at absurdly high prices). But even if we apply a reduction factor, the state order does the job — thanks to him the economy there are new jobs. According to the estimates of economists from the University of Massachusetts, each spent a billion dollars defense gives 11 200 jobs. However, those same economists point out that in the civil economy of this billion would have been used more productively in alternative energy (sun, wind, tides, etc.) a billion dollars gives 16 800 in healthcare — 17 200, and in the education sector — 26 700 jobs.
Where do they get the money?
Another aspect of the theme “Terror and Finance relates to sources of terrorism financing is primarily Islamic. In the West constantly hear appeals by civil society activists to hold responsible for the attacks — as accomplices — the governments of oil monarchies in the Middle East in which the dominant form of religion is Wahhabism.
In July 2016, the U.S. government has declassified the 28 pages of the report on the investigation of the terrorist attacks of 11 September 2001 — that’s almost 15 years vainly sought press. The pages are related to the role of Saudi Arabia in the 9/11 terrorist attacks — a role that is supported and financed by Saudi officialdom of Islamic extremism around the world. (Let’s not forget that of the 19 hijackers of September 11, 15 were citizens of Saudi Arabia.)
The notorious 28 pages were declassified by the Obama administration under heavy pressure from the public, including relatives of the victims of the September 11 attacks. Left dipped censorship some of the pieces from this portion of the report, but there is nevertheless progress — so says the Senator from new York Charles Schumer, who was one of the sponsors of the bill that allows the relatives of the victims of 9/11 litigation against the Saudi government. The white house warned that President Obama will veto the bill, entitled “Justice against sponsors of terrorism”. For some “sponsors of terrorism” and for some “strategic allies in the middle East”…
But the Senate and the house of representatives passed the bill by such a majority of votes that, perhaps, legislators will be able to overcome a presidential veto (it requires 2/3 votes in both houses of Congress, and the bill will become law. If this happens, there are many who want to nibble fat Saudi budget, seeking compensation for the death of loved ones. Chance to receive financial redress through the courts they have: as the member of the Commission for the investigation of the 9/11 terrorist attacks, John Lehman (he was Minister of the Navy under Reagan), declassified the 28 pages there is information about six officials of the Saudi regime who supported al-Qaeda in the eve of the attack on America. According to Lehmann, the Commission was closed before she could get to the exact role of Saudi officials in the September 11 attacks.
Now, according to The New York Times, the Saudis are the main driving force in radicalizing the Muslims of Kosovo (to be supplied more ISIL militants than any other country). In addition to Saudi Arabia in Kosovo is actively spread extremist ideology other Emirates of the Persian Gulf, and Egypt. Money on extremism coming from there.
The money of the middle Eastern oil despots around the world are implanted dubious persuasion “philanthropic organizations” and “educational institutions” that promote the jihadist ideology. In America there are calls to include Saudi Arabia in the list of state sponsors of terrorism: country, which 20 years ago was convicted of financial assistance to the Taliban and Hamas, should be in this list. But while the U.S. government officially klassificeret only three countries as state sponsors of terrorism: Iran, Syria and Sudan.