Thursday, September 23, 2021

The Economic Legacy of 9/11: Airline Problems, Rising Defense Stocks, Cheap Mortgages

// 11 The terrorist attack was a geopolitical gut that did not alleviate the stagnation of the economy as a whole from the dot-com idol.

It is difficult for this native Yorker to analyze dollar-cents on that sad day 20 years ago. Fortunately, the long-term damage to the business world as a whole has been modest. Even my homeland has enjoyed a business revival, until the epidemic.

My trusty spreadsheet ভ filled with government economic data from lucky days through this summer – // 11 post-economy, locally and nationwide, reveals somewhat lazily. Let us not forget that these two decades of mortgage meldowns and subsequent housing disasters have created the Great Depression, as well as the job-reducing business constraints of the epidemic era.

So how were some important economic criteria met – before and after 9/11.

Jobs? California’s employment has grown at an annual rate of 0.9% since 2001 through pre-epidemic 2019, which is slightly better than the country’s 0.7% growth. But look at 1990-2001: 1.5% annual growth across the state and 1.7% U.S. recruitment momentum.

Pay-check? Per capita income in California grew 4% year on year, from 2001 to 2020, at a national rate of 3.4%. Again, it has slowed to a statewide 4.3% annual growth and 4.4% U.S. pace in the 90s.

Inflation? Gradually the increased cost of living increased. The National Consumer Price Index has grown at an annual rate of 2.1% in the 20 years ending in June and 2.9% in the 1990s.

Home? Lower inflation and a slower economy have reduced interest rates. For example, a 30-year mortgage average of 8% in 1990- 2001 and 4.8% thereafter. Even though the pain of the real estate collapse didn’t last very long after 9/11, California prices rose 4.8% annually in 2001-2021 and 3.7% nationally. Raise statewide 3.7% annual value and a 2.4% U.S. appreciation rate in the 90s.

Now, the relatively flexible economy after 9/11 has not embraced all industries equally.

When my spreadsheet used a Wall Street lens – 83 Analysis of Stock Performance in the Industry by American Strategic Capital Costa Messrs. Charles Rother – you see a huge variety of 20 year stock total returns, it is price gains and dividends.

For example, is it a shock that war is often a lucrative ground for defense contractors?

// 11 attacks send American troops first to Iraq and then to Afghanistan. In the five years since the Vietnam War, defense spending has grown at an unprecedented rate.

And, shares of Wonder, Wonder, Defense and Space Company – California’s largest – have grown at an annual rate of 11.8% over the past 20 years, well above the 9.5% gains on the broader market S&P 500 benchmark.

However, according to Rother’s analysis, 23 of the 83 industries are at the top of defense and aerospace performance. These winners painted a portrait of post-9/11 business life.

Web: In 2001, technology was still behind the dot-com bubble. History tells us that the stock slide was not because the internet was a fad, but investors were very enthusiastic. Since 11/11, shares of Internet service companies অনেক many California-based have risen 1p% per year; Application software jumped 15% year on year; And system software grew 14%.

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“Consumers will pay a premium for easy-to-use technology,” Rother said, noting the rise of Apple and Google in this post-technology era.

Making things: Some U.S. manufacturers were hot after 9/11. Hardware is needed for regenerative technology, and since 2001 the stock of these manufacturers has grown at an annual rate of 17%. Electrical component manufacturers grew 12%. Other factory winners include special chemicals (16%); Industrial equipment (14%); And makes the container (13%).

Logistics: Technology explodes the possibilities of online shopping and rearranges how products are delivered. So “road and rail” – various transport stocks – have jumped at an annual rate of 18% since 2001 as “trading companies and distributors” have grown by 14%.

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Healthcare: Who saw Obamacare come eight years after saw / 11 – and it’s stuck today? This explains why the shares of managed healthcare companies have appreciated at an annual rate of 17% over the past two decades.

Consumerism: In the midst of all the turmoil – geopolitical and economic – for the past 20 years, Americans have continued to shop. So include restaurants (up to 16% per year) that are more industrialized than defense contractors; Home improvement (14%); Clothing chain (13%); “Personal” products (12%); And general merchandise store – a niche with discount “dollar store” (up to 12%).

Oh, and the top winner of all? Have you estimated footwear and its 20% annual profit since 9/11? It’s part fitness, part fashion.

“Exceptional marketing firms connect emotionally with their customers – it creates higher brand loyalty and profit margins,” Rather said, citing Nike footwear as a prime example.

The industries at the bottom of this stock market scorecard also tell economic stories.

Airlines: Air travel was closed for the week after Travel / 11, down 0.1% a year from 9/11, as the world reconsidered its airport security. The industry barely recovered from being hit by the Great Depression and was short-circuited by subsequent epidemics. Consider that according to CPI math, this year’s airfare is 3% cheaper than in 2001.

Car Manufacturer: Down 1.2% a year since 9/11, the industry has avoided the effects of many terrorist attacks but has been shut down due to the Great Depression. Even in pre-epidemic 2019, U.S. car sales were down 1% from 2001.

Wireless service provider: Almost everyone has cell service, down 1.4% a year since 9/11. Almost everyone has a smartphone. So the game has turned into an expensive battle for market share, a fight investors don’t like.

Gas Utility: The wars in the Middle East have pushed up energy prices, down 6.1% a year since 9/11. This has created opportunities for technologies such as fracking to increase supply – and reduced the price of natural gas. Not to mention, climate change efforts directly target natural gas একটি a fight that has turned the industry into the worst investment since 9/11.

Jonathan Lansner is a business columnist for the Southern California News Group. He can be reached at [email protected]

The Economic Legacy of 9/11: Airline Problems, Rising Defense Stocks, Cheap Mortgages
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