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Lou Dobbs Moneyline

America's New War: Economic Impact

Aired September 14, 2001 - 18:04   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: In New York, the president today inspected the devastation and the rescue efforts under way in downtown New York City. Because, for all that it is, ground zero, the devastated World Trade Center complex, it is, in point of fact, the battleground, the first battleground in what the president has termed America's new war.

The president today visiting the scene of the terrorist attack on America, the worst attack ever. The president has called Tuesday's terrorist act an act of war. A war, he said, "not of our choosing." The conflict, he said, began on the timing and terms of others, but Mr. Bush said it will end in a way and in an hour of our choosing.

The president made his way through the still-smoking rubble here in New York, and he came with words of sympathy for the families of victims. He came with words of approving for the rescue workers who continue to search for survivors and victims. And he came to reassure a shaken public of this nation's strength and its resolve.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: America today is on bended knee, in prayer for the people whose lives were lost here, for the workers who work here, for the families who mourn. This nation stands with the good people of New York City and New Jersey and Connecticut, as we mourn the lost of thousands of our citizens.

UNIDENTIFIED MALE: George, I can't hear you!

BUSH: I can hear you!

(LAUGHTER)

BUSH: I can hear you, the rest of the world hears you. And the people...

(CHEERING AND APPLAUSE)

BUSH: And the people who knocked these buildings down will hear all of us soon!

(APPLAUSE)

CROWD: U.S.A.! U.S.A.! U.S.A.! (END VIDEO CLIP)

DOBBS: Martin Savidge is at the rescue site now, and has more on the story -- Martin.

MARTIN SAVIDGE, CNN CORRESPONDENT: Lou, we're in the area of Reed (ph) and Greenwich Street, that is about three and a half blocks north of the World Trade Center, or at least where the World Trade Center used to be. In the background, the cloud of smoke you mentioned still billowing high into the sky, replacing, once where those twin 110-story towers stood.

This is a vital checkpoint of getting in supplies, getting in critical material that is supporting the rescue effort, the ongoing search for survivors. Sadly, there were no reports of any survivors being pulled from the rubble today, and in fact, there have been fewer reports of even contact with anyone that may still be alive.

That hasn't dimmed the hopes. Weather was the biggest problem today. It was stormy in New York overnight. It was wet and windy and cold in New York when the sun came up. It made the job of the rescuers very difficult, very slippery, very treacherous. Those, literally digging with their hands on the debris pile that now stands about 100 feet tall. On top of that, it was the winds that was also a concern. Towering over their heads are at least three buildings that are thought to be critically unstable that could come down. They weren't sure if they could take the wind loads. They are still standing now, they are still digging now.

Then came the president of the United States. It was critical to the White House that his visit not disrupt the search for survivors. It did not, but he did go around shaking hands, congratulating those that were working on the job, and telling them that they are heroes and they have inspired a nation. He shook about 400 hands, and according those who were there, they say they liked what the president had to say.

After he left, well, the cordoned-off area where we are standing now has begun to resume some normalcy. They want to get back to work, not just to support the effort to find survivors, but to try to get this area, the financial district, back on line. Monday is a critical day. Power is still out, communications disrupted. They worked all day on that effort, which is also critical as well.

And finally, sailing up the Hudson River at this very moment, the U.S. hospital ship Comfort. It will bring comfort and supplies, and critical medical supplies to this area, that right now could use all the help it could get -- Lou?

DOBBS: Martin, thank you very much. Martin Savidge.

As Martin just said, Wall Street is working mightily to prepare for an opening of the stock market on Monday morning. That is a difficult and arduous task by any standard. Those workers struggling to restore telecommunications, putting those phone lines back up and getting them running, essential to the return of the markets. Computer technicians are working hard. Over the weekend, they are scheduled to be testing software and hardware and communications. Everything from lights to running water must be restored, and it must be checked. Not to mention the actual stability of several of those endangered buildings.

From that rubble, Wall Street's key financial institutions are determined to rise, and to be fully operational, if not fully recovered by 9:30 a.m. Eastern Time Monday.

Greg Clarkin is here now and has more for us on that part of the story -- Greg?

GREG CLARKIN, CNN CORRESPONDENT: And, Lou, this tragedy really has brought together rival exchanges, and they're all working now with the one common and one shared goal of restoring trading by 9:30 Monday morning.

(BEGIN VIDEOTAPE)

CLARKIN (voice-over): They washed away the dirt and the grime, hoping to cleanse Wall Street of the remnants of the attacks on the World Trade Center. But inside the New York Stock Exchange, the challenges to restoring trading ran deeper. There are monumental telecommunications obstacles, including making sure electric and phone service will be intact. And then there was the main issue, making sure the sophisticated network that handles the trades of the NYSE can be processed.

RICHARD GRASSO, CHAIRMAN & CEO, NYSE: The challenge is recreating the network, the interconnected infrastructure that brings 85 million investors individually, and another 10,000 institutions from all over the world.

CLARKIN: The New York Board of Trade was located in the World Trade Center complex. It will have a new facility come Monday.

MARK FICHTEL, PRES. & CEO, NY BOARD OF TRADE: Well, the major issue is we have to make sure that all of our clearing members are able to receive the trades and to clear them. It's one thing to trade, but if you don't match them and clear them, you've got a serious problem.

CLARKIN: All of the trading exchanges will be undergoing extensive testing this weekend, to spot potential problems.

HARDWICK SIMMONS, CEO, NASDAQ: We've got to make sure we have adequate power, we have adequate access to downtown, and that we have the telecommunications capability necessary to carry all of this.

(END VIDEOTAPE)

CLARKIN: Now, the New York Stock Exchange already has stringent security measures in place. They will be upgraded even more, and this goes for tourists, employees, just about everybody there. And, Lou, as Dick Grasso, the CEO at NYSE said, he instructed his security force: If Dick Grasso were to arrive without the proper I.D., send him home.

DOBBS: That is all well and good and appropriate. How realistic is it that we can see this stock market, as represented by the New York Stock Exchange and the Nasdaq, open for business Monday? I know they're making a heroic effort. What would you rate the odds at right now?

CLARKIN: I think pretty good, Lou. After being down there today and speaking with Grasso and some of the other heads of the various exchanges, they are adamant that they believe they will have trading up and running. Speaking with Verizon, handling the telecom side of it, they say they believe they will have service. The question, really, is the level of service that will be available. And right now they'll be working through the weekend, spot-checking things, looking for potential problems and any bugs.

DOBBS: And of course there are number of reasons, not the least of them, the symbolic reason, to restore the world's largest equity market to trading after this vicious act of terrorism. But the fact is that the world economy depends on these markets, the New York Stock Exchange accounting for some $13 trillion in market capitalization. That market alone dwarfing all of the other exchanges in the world, whether Tokyo, whether Frankfurt, or London.

Greg, thank you very much.

Well, when those markets do resume trading, there is, of course, some fear amongst many that a big sell-off might occur. Christine Romans has been taking a look at the implications of that possibility and has the report for us -- Christine Romans?

CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, it will be normal trading hours here on Monday, but anything but a normal trading day. The opening bell will ring at 9:30, there will be two minutes of silence, and then New York's financial community will try to -- try to swallow its pain and trade stocks. Many fear a sell-off soon after the bell.

There is the uncertainty lingering after Tuesday's terror attack, and now signs of the economic fallout. Ford will shutter several North American plants, and said third-quarter earnings will far more than expected. Disrupted freight service has caused a part shortage there, so there will be a short shattering of some plants.

General Electric warned World Trade Center related losses, that its reinsurance will cost G.E. four cents a share in the quarter. And some analysts fear the economy will tip into recession.

(BEGIN VIDEO CLIP)

ROBERT REICH, FMR. LABOR SECRETARY: Undoubtedly, even before Tuesday, the economy was precarious. Consumers were getting nervous, their debt was very high. They were seeing higher unemployment figures and mass layoffs, and the global economy also was not in all that healthy a position.

(END VIDEO CLIP)

ROMANS: A week ago, the Standard & Poor's 500 closed at a three- year low, and pundits were searching for any sign of economic recovery. Still, there is hopeful talk that corporate buy backs could counter any selling on Monday. Also, Lou, players are reporting a so- called gentlemen's agreement to limit short sales. After four days of no stocks trading, no one's really sure how markets are going to react. But many players are very quick to note that the initial reaction could be violent, but prices tend to smooth over from there over next few weeks -- Lou.

DOBBS: And of course, we saw that violence in overseas markets immediately following the tragedy at the World Trade Center. But the fact of the matter is, we're also seeing a lot of economic signs that suggest some tempering of immediate reaction, aren't we, Christine?

Retail sales for the month of August -- just as all of the pundits and gurus and savants were suggesting this economy is going into recession, suddenly we see retail sales move higher in August.

ROMANS: And there are analysts who are saying be careful about getting too far the downside, because maybe if we are here at the bottom of the economy, you could be hurting yourself longer term.

DOBBS: There is another factor at work here, and you alluded to it, Christine: a gentleman's agreement, if you will, amongst the major firms to if not altogether not conduct any short selling, at least to constrain it, so that there will be limited pressure on the downside.

ROMANS: Absolutely. And some folks are saying that so many sectors are already trading near 52-week lows, that maybe they are already undervalued here at these levels. It will be very interesting to see what happens on Monday morning.

DOBBS: And, Christine, I can't wait to tell you and all of our other viewers, share with you, some of the comments, the many comments we've received from viewers about what they're going to do Monday, and what they recommend that others do.

Christine, thank you very much.

The Treasury Department announced that it has established a team to target terrorist fund-raising. Officials saying that that task force will include representatives of the FBI, the CIA, as well as, of course, the treasury. The Treasury Department saying that team will eventually become a permanent, a permanent foreign terrorism asset tracking center, meaning they're going to try to find out where the money for terrorists comes from, and precisely where it goes.

For more perspective now, we turn to Jeremy Siegel. He is professor of finance at the Wharton Business School. He joins us tonight from Philadelphia. Jeremy, good to have you with us.

JEREMY SIEGEL, WHARTON BUSINESS SCHOOL: Good evening, Lou. DOBBS: As a student of these markets, certainly one the country's ablest and most knowledgeable observers, give us your judgment about the likelihood that we're going to see these markets open Monday, that importance of that event, and of course, what will happen.

SIEGEL: Well, certainly, I think opening is important. I think trying to get back to normal -- we'll never be normal again, I think. But in a functioning mode is very important, and I hope they will be able to do it. I also hope, Lou, that the Fed will act very aggressively. I'm actually hoping that before the opening on Monday, that they may lower the Fed funds rate by 50 basis points.

DOBBS: Fifty?

SIEGEL: I think that would be very important, yes.

DOBBS: Why do you see that as so important, as compared to providing all of the liquidity that the Fed is making available, both in the international banking system as well as in our American banking system?

SIEGEL: Well, they're providing the cash that individuals want to take out of the bank. That's what the liquidity is. It's very much like Y2K, when people wanted to take out funds. That's all well and good, but that doesn't actually lower the interest rates. And you've been looking at the treasury markets. They're expecting sharply lower rates, and will be disappointed if the Fed does not follow through.

DOBBS: Jeremy, I think one might even say, in addition to expecting, almost demanding, as we look at what is happening, with the two-year note, in particular.

SIEGEL: Absolutely.

DOBBS: What is your best guess? And we acknowledge, I think, all of us, including certainly you, perhaps you first among all, that any prediction here is simply that, a guess -- what is your guess as to what the markets will do, what investors will do come Monday morning?

SIEGEL: I think there will be huge trading. I think trading might set an all-time record on Monday. I think there will be extreme volatility. I can see the Dow maybe opening down 3-, 400 points, then surging up 100, and back down -- swings that we really have never seen before. I think it would settle down at the end.

I think we have to settle down at a lower level, because if you take a look at Europe, if you take a look elsewhere, you will see that there hasn't been a recovery in other markets. And I don't think we'll get one here.

DOBBS: Jeremy, let me throw a contrarian, bullish outlook at you to see what you would make of it. As we watch what were remarkable services all over the country today -- a rather inspiring, I must say, display of patriotism in this national day of mourning -- is there, in your judgment, room here for some of the experts to be surprised, and to see a positive outlook, an economy and a society in this country assert itself more positively? A stronger level of confidence rather than a weaker level of confidence?

SIEGEL: It is really heartwarming to see how people come together, and certainly that is the strength of America. But if we look back, there's no way that this can be positive, economically.

DOBBS: Right.

SIEGEL: For our country. And as a result, I know -- I've been hearing some things, you have to, "be patriotic and buy." The problem is, you know, if people do that, and then the market goes down later, they're going to feel very resentful. Because finally, the level of the prices is going to be what the level of the economy and the earnings are, no matter, really, who buys and sells on Monday.

DOBBS: Jeremy Siegel, as always, good to have you with us.

SIEGEL: Thank you very much, Lou.

DOBBS: Well, trading today did resume in the New York Mercantile Exchange, but not without some serious problems. Electronic trading did begin at 2:30 this afternoon Eastern time. It was halted just moments later because, as you would not be surprised, because of some technical problems. Light sweet crude oil soared more than 8 percent in those minutes of tradings, gaining more than $2 a barrel.

The action resumed at 4:00 and ended just minutes ago. We don't have an official close yet, but light sweet crude oil was higher, up again just about $2, as of about 15 minutes ago.

Bonds today surged in price for the second straight day. And investors are continuing to look for a safe haven. Lisa Leiter in Chicago with that story -- Lisa?

LISA LEITER, CNN CORRESPONDENT: Lou, for the second straight day here at the Chicago Board of Trade, the mood was somber and trading was thin. But trading was orderly, and that's something that traders say was very important, and prices were much easier to come by than they were yesterday.

And in the early going, the government went ahead and released regular new reports on retail sales, producer prices and industrial production, although those reports went largely unnoticed in the bond market. Instead here, traders spent a lot more time talking about their friends and colleagues in New York. They swapped survivor stories, and they showed their patriotism by hanging a pullout section from the "Chicago Sun-Times" with the American flag on it.

Again today, Lou, like you said, investors sought the relative safety of short-term government debt. The two-year note surged, with that yield falling to a historic low of 2.86 percent -- Lou.

DOBBS: Lisa, thank you very much. Lisa Leiter from Chicago. And now joining me to give us some perspective on this bond market and, in particular, the activity and what we can expect in the days ahead, Kathleen Hays -- Kathleen?

KATHLEEN HAYS, CNN CORRESPONDENT: You know, there have been so many interesting things touched on, I really don't know where to start, because I think there's two important themes coming out: How is the bond market functioning, and how is the economy functioning?

In terms of the bond market, let me start there. And let me try to explain to our viewers: "The bond market. That's not necessarily my market. I'm not going to trade there." But remember, this is really kind of where the lifeblood of our financial system flows, through the bond market, through the credit market. It has to be functioning fully an well for this financial system to be fully back on its feet. Like this entire city, people are trying to get there.

And in fact, as Lou just said, second straight day of trading, two days of rallies. But there are some little glitches beneath the surface. People are working out of back offices. Back offices are not like full offices. The computer systems may not be fully operative. Brokers, in fact, are not able to look at screens. Dealers are not able to look at screens, as they were, except in very limited market- making ways. In fact, one guy I talked to today said, "I'm doing this like I did 15 years ago. I'm calling on the phone to ask about prices." You know?

In terms of the economy, let me say quickly, I think you're very wise to point out this contrarian view. The markets are calling, Jeremy Siegel calling for this aggressive rate cut on Monday. Remember, Bob Mintier Wednesday gave a speech, said it's too early to judge the macroeconomic consequences. I think that's going to be the story, that we may not get that cut as quickly as people seem to want it.

DOBBS: OK, Kathleen, thanks. Kathleen Hays.

Well, the disaster at the World Trade Center has of course affected almost everyone, and certainly the people who often offer guidance and some direction and advice right here on "MONEYLINE." Economist Diane Swonk, principle among those, and she joins us tonight from Chicago.

And Diane, just a few days ago, was outside the World Trade Center, running for her life as that first plane crashed into the World Trade Center.

Diane, it is good to have you with us. And we're glad you're safely back in Chicago. Tell us, if you could, first, what happened?

DIANE SWONK, CHIEF ECONOMIST, BANK ONE: Well, briefly I was in the World Trade Center. And thankfully for Kathleen Hays, I had someplace to go, because Kathleen put me up for the last couple days. And as much as I love staying with her and her family -- they were wonderful to me -- I'm glad to be in home sweet home Chicago. We had -- it was an incredible event. It felt like an earthquake. The Marriott was incredibly good at getting us out. Only thing I kept thinking the entire time was I felt somewhat responsible. As a leader of the National Association for Business Economics, I had chosen the World Trade Center as our location. I had some students with us, and we were -- the whole time, I just kept trying to get people to keep moving forward.

As people looked back, they began to panic at what they were seeing, which was a horrendous site. And what I kept doing was getting people to move forward, move forward, move forward, until finally everyone was placed and taken care of. At the end of the day, I had to walk my way all the way up from Battery Park to our offices at Bank One, and then to Kathleen's house up in upper Manhattan.

DOBBS: And then you, by automobile, back to Chicago, because of course, no airline travel.

SWONK: I got a limo back to Chicago that broke down. My father had to come pick us up. They also tried to gouge us, but I came to work today for a very important reason. One, my people needed to see me there, and I wanted to prove a point, that you can't take us down. We have to keep moving forward and move on. And that's why I'm here today.

DOBBS: Well, Diane, the markets trying to reopen, certainly the equity markets, Monday, for much that very reason. Your judgment, your best judgment about what we should expect over the course of the next several weeks?

SWONK: Well, I think Kathleen made some very good points about this issue, that the Fed should cut at the onset. We need to see what's going to happen first, before the Fed moves. They will move, they stood up and said we're ready to move. Congress is going to be pouring money into this economy at an extraordinary pace, moving from 20 to 40 billion now, just allocated to this crisis alone -- increased expenditures on security.

The outcome for the economy, although the upfront losses are clearly there -- for this market, there's also signs for a ray of light at the end of the tunnel, or the silver lining to the horrible gray cloud I walked through. And I think those things will help keep the market calm. We've seen orderly -- Lisa used the word "orderly" bond market trading.

I think there is a real attempt here to try to keep these markets as calm as possible. And we may not see the big price swings, the big dramatic effects that people are looking for, because I think there's a real resilience and a real attempt to agree to that right now. And I think that's very important.

DOBBS: It is good to see you, Diane, and we're glad you made it safely out, along with all those who did. And I know, you, like we here, join those who lost friends, family, loved ones and colleagues who did not make it out.

Diane Swonk, thank you.

SWONK: Thank you.

DOBBS: The attacks on the World Trade Center brought the financial district down. Millions of square feet of office space have been lost. That means lots of companies have to find a place in which to do business. And Peter Viles has that story.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I think what we can simply do there is -- if we have space, is just put two people in the same room, temporarily.

UNIDENTIFIED FEMALE: I think the cubicles.

UNIDENTIFIED MALE: In the cubicles, yes.

PETER VILES, CNN CORRESPONDENT (voice-over): CEOs do not typically worry about who shares a cubicle, but these are not typical times. This is the old American Express headquarters -- structurally sound, but damaged. Ken Chenault is moving 5,000 workers, some to this new headquarters in Jersey City, others into two larger leased spaces in the Jersey suburbs.

KENNETH CHENAULT, CHMN. & CEO, AMERICAN EXPRESS: Fortunately, all of our core operations and processing are outside of our New York headquarters building, all around the world, so we have had virtually no interruption of service for any of our businesses across American Express.

VILES: Fifteen-point-five million square feet of office space was destroyed. Another 12 million damaged, meaning the city's businesses are now look for 27 million square feet of space. American Express has already located nearly one million square feet for itself. When you include suburban office space, metropolitan New York has 46 million square feet of vacant space available. The problem is finding enough large spaces to replace what has been lost.

STEVEN SWERDLOW, CB RICHARD ELLIS: It is a game of musical chairs right now, where the major companies are out, really in a frenzy, looking for the larger blocks of space. And commitments are already being made as we speak. So the -- we will be essentially out of large blocks of space by next week.

VILES: The scramble to find that space, though, is overshadowed by rescue missions. This staging area is just footsteps from the new American Express headquarters.

UNIDENTIFIED MALE: The focus has really been on the victims, their families, the rescue workers. And that, I have said to employees, should be the primary focus. The business issues pale in comparison.

(END VIDEOTAPE)

VILES: Another gentleman's agreement to report tonight, Lou. We understand that several large landlords have made an agreement, an informal agreement, to keep their prices at last week's level, essentially an effort to stop any price-gouging of commercial real estate in the city before it starts -- Lou?

DOBBS: Profiteering is not going to be a popular activity, nor a very smart or healthy one, I think, in these times. Peter Viles, thank you very much.

Chicago's Midway Airport, a private airport south of Chicago, was shut down today after police detained two people for questioning there. Police have not yet said why those were detained.

Elsewhere, most airports were operational, but at only a fraction of their normal capacity. Of course, all of this has had a major impact on the airline industry, but it does appear tonight that some help is on the way. Congressman Richard Gephardt talking about $12.5 billion in direct support for the industry.

Kitty Pilgrim is here and has the story -- Kitty.

KITTY PILGRIM, CNN CORRESPONDENT: Lou, Congress is requesting a major bail-out for the airline industry. And Wall Street estimates that it's about $4.4 billion in losses this year alone. Airlines absolutely have to start flying.

Let's go through the numbers on what's going now. United Airlines, which lost two planes in the tragedy, completed 84 flights yesterday, scheduled 500 today. And that's out of 2,300, normally. American scheduled 800 flights today, but then had to cancel to New York, because of delayed airport openings, and they completed 147 flights. Delta's typical 2,500 flights, 467 completed. Thursday 1,200, flying Friday.

But this ground stop is not really the only the issue for the airlines. Now the new FAA guidelines for safety also have a great cost in personnel, and labor for the airlines is very expensive.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Right now, the airlines are looking at all these rules, saying, well, how do we restart our operations when we have all these new rules to cope with.

(END VIDEO CLIP)

PILGRIM: Now, commercial airline pilots also serve in the reserves, and we have these numbers: 50,000 reservists are approved for active duty, 3,500 will be in the initial wave, 13,000 are for Air Force duty. And Air National Guard pilots are needed to man the fighter jets that the Pentagon has put on alert nationwide.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We've had people who are knocking on the doors seeking to help. They want to serve, they want to be a part of this, they are very emotional. (END VIDEO CLIP)

PILGRIM: Now, United says some of their employees have been activated. Delta says they're sure they're going to be involved and they're going to cope with it the same way they did in the Persian Gulf. And American, Lou, says many of their pilots have a military background, and they are sure that they will be involved in this reserve call-up.

DOBBS: Just as they were in 1990 and 1991. Kitty, thank you very much.

And we have, by the way, just received word that Midway Airport has just within the last few moments now reopened.

Joining us now to talk about how his company is faring after these attacks, a man who runs a very large business dependent upon air travel and the operational airport around this country is Jim Kelly, he is the chairman and the CEO of UPS. Good to have you with us.

I know these are for almost everyone extraordinarily difficult times. There is -- so much importance attached to what you do and your competitor, your industry, because so many companies, businesses in all areas of life depend upon your overnight services, your air mail services. What is the status first of that service tonight?

JIM KELLY, CEO, UPS: Well, first of all, Lou, I mean, our biggest concern, of course, is for our people, and certainly the victims of this horrible tragedy. We extend our sympathy and our prayers to their families. We were fortunate not to lose any of the many people that we have working in that area.

But us, our system ran pretty strong considering the circumstances. People worked very hard. We deliver about 10 million ground packages a day, and two millionaire packages a day. And with the airline down, of course a lot of that merchandise went into our ground system, some of that was delayed. But last night, we were up and running and pretty much back to normal.

DOBBS: And when you say "normal," "pretty much back to normal," is that 80 percent of normal, put a number on that for us, would you?

KELLY: Well, today it would be 95, close to 90-plus percent. As a matter of fact, we will be reimplementing our guarantee to our customers as of Monday, so as of Monday we expect we'll be 100 percent back. We are getting our worldwide business, our international business up today and over the weekend.

DOBBS: And what is your best judgment about the effect on your company and others of the reservist call-up ordered by the president today?

KELLY: Well, I think the American people of course are very resilient, and I think that a lot of people continue to do business this week, even during this horrible tragedy. Most business was conducted in our country this week, and I think it will rebound fine. I think the economy of course was weak before the tragedy, and I think it will improve going forward.

DOBBS: OK. Jim Kelly, chairman of UPS, thanks for being with us.

KELLY: Thank you.

DOBBS: We're going to go now to our MONEYLINE contributor William Cohen who is also a former defense secretary. Bill, good to have you with us.

WILLIAM COHEN, FORMER DEFENSE SECRETARY: Good to be here, Lou.

DOBBS: Today, we witnessed a president leading this nation through, it seemed to me, two phases, declaring as he did yesterday a national day of mourning. You and your wife Janet I know were at the national cathedral for the prayer services, and this president here with a bullhorn in his hand talking about those who will soon hear from all of America, those who had been responsible for bringing down the walls of the World Trade Center and those other buildings. Is that -- is that right? Have we entered a new stage? Is America now engaged in war?

COHEN: Well, I think quite clearly the president's indicated acts of war have been perpetrated upon the American people, and I think he also made it quite clear that we will respond at a time and place of our choosing, and I think he's going to be very careful with his national security team to evaluate all the options available -- military, diplomatic and economic, and then seek to effectively respond to against those who have caused this.

So it, in effect, is a call to arms, so to speak, to stiffen the spine of the American people, to tell them that a great sacrifice has been required of them in the past, great sacrifice will be required in the future.

DOBBS: And let me ask you in one front that probably a lot of people are not going to talk about. But intelligence work is going to be so critical a part of the president's war. Do you believe that the United States will be successful in tracing terrorist money through the international banking system? Is this country, in your judgment, prepared to demand that of international banks around the world?

COHEN: I believe that this administration, this country will call upon all the international community, financial and otherwise, to contribute their support to rooting out terrorism and the financial network that supports terrorist organizations. I think that the administration will call upon them, and I believe that given the international expressions of support to date, that we have a very good chance of achieving that.

DOBBS: Bill Cohen, as always, thanks for being with us here.

I'm Lou Dobbs, thanks for being with us, and good night from New York.

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