One way or another, stock market touches everyone
On the afternoon the stock market plunged, Northern Trust Company held a seminar for investors. The bank's chief investment officer junked his prepared speech. Another speaker decided not to recommend any stocks that day.
The group of seasoned investors showed concern, says Charles Needham, a vice-president at the bank, but ``it wasn't hysteria. People weren't feeling that way at all.''
Monday was that kind of day around the United States. The record drop in the stock market caused no mass panic among Americans, but directly or indirectly the market affects a great many of them.
In South Dakota, rancher Skee Rasmussen saw cattle prices drop sharply for two days. ``Certainly no panic,'' he says. ``But we're watching it closely and we're really concerned about it.''
In Orlando, Fla., Greg Walters is rethinking his plan to buy a 17-foot motorboat. In Gary, Ind., steelworker Paul Hashiguchi may lose part of his bonus because his USX profit-sharing plan is tied to certain steel stocks.
``Yeah, it worries me,'' Mr. Hashiguchi says. But he still plans to buy a three-bedroom house. ``The people who work around here and in this industry, it's like you've had worries for the past five or six years. You can't live your life worrying what the future is going to bring.''
The market's drop also taught a lesson to Braun Rosen, a sixth-grader in Libertyville, Ill. Earlier this year, his math teacher divided the class into teams and had each team invest a theoretical sum in stocks.
Braun recalls his teacher saying, ``Buy a lot, buy a lot. It's the only way you're going to make money.'' By Tuesday, the class's mood had changed. ``Someone said America was only 1,700 points away from being broke,'' Braun says.
Brokerage offices around the country were deluged with sell orders and panicky customers Monday.
``I've never seen anything like it,'' says a Denver stockbroker for Dean Witter Reynolds. ``Right before your eyes you saw in 20 minutes the market fall 100 points.'' By midweek, however, the plummet had been checked. ``It's business as usual here,'' he adds.
Elsewhere, there was bewilderment.
``A lot of people are calling the office: `What's the bottom line? How's it going to affect me?''' says Terry DeVine, managing editor of the Fargo Forum, North Dakota's largest daily newspaper. ``We tell them we really don't know.''
The response was the same in Schenectady, N.Y., when Bob Cudmore interviewed stock market experts Monday on his WGY radio talk show. ``I think it's because people didn't know what to make of it,'' he says. ``It seemed to me that this signals something, but what it signals I don't know.''
To many who were children during the Great Depression, the market's record drop sounded a warning not unlike the crash in 1929.
``It's going to be worse than anything we've ever seen or can imagine,'' says Vince Rossiter Sr., chairman of the Bank of Hartington in Hartington, Neb. Mr. Rossiter has been warning about America's growing debt and farm problems for the past two decades. ``We're in uncharted waters and we really don't understand the intensity of this thing.''
``There are many parallels,'' adds David Bartholomew, associate vice-president of Merrill Lynch Futures in Chicago. ``Ten years ago I started making notes about certain policies that were being made. And the heading on that notebook was `Things I would do to create economic chaos.'''
Inflationary policies, programs that encouraged developing nations to take on additional debt - these and others went into Mr. Bartholomew's notebook. The latest problem policy, he says, is an Oct. 13 proposal to allow speculators in farm commodities at the Chicago Board of Trade to hold positions three to four times larger than the current limits.
That could cause one individual to have too much sway in the markets, Bartholomew says. But the policy won't be written down in the notebook because sometime around 1980 he stopped taking notes.