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I have good friends who live not far from where the World Trade Center stood. For weeks after the World Trade Center collapsed, they shuttled among hotels and the apartments of friends and family. Except for brief visits to pick up essential belongings, they were barred from their home. Even after the police cleared them to return, they stayed away. It hurt to breathe the air, which was filled with fumes from the still-smoldering ruins.

When they finally moved back home, the neighborhood struck them as changed forever. Stores were gone, buried under rubble or closed after months of too few customers. Schools had closed, with classes shifted to other neighborhoods. The streets were crowded with tourists who had come to see the hole where the buildings once stood.

My friends have just one wish: They want everything to be normal again.

They know that things can't go back to the way they were. Too much has changed. But they still long for a time when, however different the details, they feel normal. And they worry that they may never feel normal again.

A year after Sept. 11, I think that's what most Americans want. We want life to go back to the way it was


. But we also fear that the world we knew before has vanished forever. Sept. 11 put an end to a period and began something new. We don't yet know what that something new may be. We hope it eventually will stop feeling new and begin feeling normal, and we fear that it won't.

Last Gasp of a Golden Era

Investors know what I mean. It's not clear to me that the Sept. 11 attacks caused anything to unfold differently in the financial markets or the economy than it would have without the attacks. But Sept. 11 feels like it put an official end to an era in the economy and the stock market. The golden economic boom and the soaring bull market in stocks that dominated the 1990s are over. Whatever lies ahead will be different, indeed.

The world for investors had already changed radically. The bull market in


-traded technology stocks had ended in March 2000, and the

Dow Jones Industrials

topped out at 11,723 two months before that. By Sept. 10, the day before the attack, the Nasdaq Composite was deep into a ferocious bear market -- the index down 65% from its March 2000 high. The Dow had dropped into official bear territory in April 2001, with the index down 20% at the time from its January 2000 high. The Dow then recovered briefly but had tumbled again, so that by Sept. 10, 2001, it was 18% off its high.

Those drops were certainly unnerving, but for many investors (myself included), they didn't signal the end of the great bull market cycle that had ruled Wall Street since the early 1980s. On the contrary, this painful downdraft seemed to be another correction, like those of 1987 and 1990, which ended more specific bull market periods. And like them, it certainly didn't seem likely to put an end to the overall pattern of rising stock prices that had followed the long bear cycle that had begun in the late 1960s.

What the Economists Saw

It was easy at the time to believe in a quick market recovery. The economy looked likely to go through a brief and relatively painless slowdown before picking up speed again. It seemed to be a good thing that the overheated economy had slowed down; remember that the numbers showed the economy growing at better than 7% in the last quarter of 1999. Economists and Wall Street strategists were debating then whether or not the Federal Reserve would be able to pull off the so-called "soft landing" for the economy without sending the country into a mild recession. Both sides of that debate, though, saw healthy growth resuming quickly after any slowdown.

Belief that the good times would continue was so strong that the horror of Sept. 11 didn't really shake that vision. In an amazing display of resiliency and determination, Americans resolved to get on with their lives. By going back to living as they had before the attacks, Americans would show that the terrorists hadn't won. After a relatively brief period of shock, American consumers went back to consuming, and American investors went back to investing.

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The stock market, closed in the aftermath of the attack, issued its own rejoinder to the terrorist attack by rallying. From its Sept. 21 low, the Nasdaq Composite rose 44% by Dec. 5.

Was It Denial?

In retrospect -- now that the rally of late 2001 has failed and the stock market has fallen below the lows of September 2001 -- it's tempting to characterize that late-fall rally with a grief-therapist term: denial. There certainly was an element of that in our response to Sept. 11. Going about business as usual -- to the degree that we could --


a way of asserting that everything would return to normal relatively quickly.

But I think we sell ourselves short if we see it merely as that. It also was a reasoned response to the reality of the attacks founded on a faith in our country. In the midst of our grief at the deaths in New York, at the Pentagon, and in the airliner that never made it to its intended target, Americans recognized that their country and its institutions were strong enough to survive this terrorist attack.

Look at the numbers from a recent report by William Thompson, the comptroller of New York City. The attack on the World Trade Center destroyed 13 million square feet of office space and damaged an additional 17 million square feet at a cost of $22 billion. The city lost 83,100 jobs from September 2001 to July 2002. Because businesses were shut, airports closed and the stock exchanges shuttered, New York lost an additional $12 billion in business.

These are mind-boggling economic numbers, until you put them in the context of the immense size of the entire U.S. economy. In current dollars, the U.S. Department of Commerce says the nation's economy produced $10.4 trillion of goods and services in the most recent four quarters. The attack on the World Trade Center cost New York $83 billion to $95 billion -- less than 1% of U.S. gross domestic product.

By themselves, even if you add in the costs of added security and slower transit of goods and people, the terrorist attacks aren't enough to uproot all our definitions of what's normal -- even if you throw in last year's anthrax deaths, the bomb threats and the national security alerts. Yes, we might feel that we were a country facing attack, as we are. And yes, we might feel that our normal lives were threatened. On Sept. 11, 2002, we certainly would be holding ceremonies to honor the almost 3,000 people who died in the attacks and their aftermaths. And we'd be celebrating acts of selfless courage and mourning lives cut short.

More than Sept. 11

But I don't think the terrorist acts alone would be enough to make us feel such a profound sense that something has ended and can never be recaptured.

We feel that permanent sense of loss, in my opinion, because the attacks of Sept. 11 weren't isolated horrors in a time of otherwise normalcy. The attacks took place in the midst of what has turned out to be the worst stock market decline since the Great Depression. Whether they contributed to it or not, the attacks came during a remarkably stubborn economic downturn -- one that shows disturbing signs of not responding to traditional economic medicine: interest rate cuts, tax decreases and positive rhetoric. And they came during a period of profoundly disturbing financial scandals at





Global Crossing

and Arthur Andersen that have led many of us to question the basic fairness of our system. It's those outside events -- ones essentially unrelated to the attacks -- that have made it so hard to find the normalcy that we all crave in the face of horrors like those that occurred a year ago.

Just when we want to fall back on the normal basis of our lives as a way to cope with the "un-normal" terrorist attacks, that normalcy itself suddenly seems shaky. Want to put to rest fears about the new world facing our children? Well, it gets harder when their college funds suddenly seem inadequate. Want to sink into the daily routine surrounded by the comforting faces of co-workers and friends? Well, it gets harder when your job, or that of those co-workers and friends, is insecure. Want to feel OK about the future because you know that the leaders of our economy are honest and capable? Well, it gets harder when the 11 o'clock news shows clips of some of "the best and the brightest" being led off to jail.

And it's not like the outside world that spawned the terrorists has promised to leave us alone in the future either. No matter what you believe the source of terrorism is, it's hard to feel that there will be less of it in the world tomorrow than there is today.

Sources of Normalcy

Where does all this leave me as I think about Sept. 11, 2001, and what I want to do to commemorate that day?

It sends me back to the sources and symbols of normalcy in my life. Family and friends and community ground me, and I want to draw these people close, gather them together, and affirm what we mean to each other. I've spent a good part of the summer reading books that remind me of who I am, what I believe, and who were are as a people. For me that has included Melville and a history of the battle of Saratoga, the turning point in the American Revolution after one of the darkest periods of that war. And without any conscious plan, I've been looking up old friends that had dropped out of my community. I don't know quite why, but it has felt right.

I've tried to compensate for the un-normalcy of the economy and the financial markets by going back to foundations, too. That has meant doing the dirty work of revising family budgets and making sure that dollars get spent in the right places. It has meant taking on tasks like refinancing the mortgage and redoing wills. I don't expect anything bad to happen, mind you, but when so much else feels up for grabs, it feels good to know I've taken care of the things that I can take care of. And it means continuing to invest in stocks, even if only when the risk seems low and only when the price seems right, but also looking for a new set of stocks to lead the next market.

And finally, I've tried to separate what is truly new and different -- and often scary -- from what is really just an expected part of life. It has helped me this year to go through old family papers that included deeds and second mortgages that showed how close my grandparents came to losing their house during the Great Depression. They managed to get by just by the skin of their teeth at the bottom of an economic cycle -- and still somehow send my mother to college. I don't expect anything as bad as those years out of the current economy, but reconstructing their experience has given me perspective.

Good economies are followed by bad economies are followed by good. No one part of the cycle is "normal," but the progression through the cycle is. Change is constant, which makes it unchanging in a way. We can't go back and put our feet back in the same river; the constant flow of the water past where we stand insures that. But we can put our feet back in


river -- and feel the rush of the water, and dip a pail for splashing a child, and maybe even catch a fish

And that seems a good start toward "normal" to me.

At the time of publication, Jim Jubak owned or controlled shares in none of the equities mentioned in this column. He does not own short positions in any stock mentioned in this column.