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Lou Dobbs Moneyline

Dow Declines 140.40 to 8,235.81; Nasdaq Tumbles 47.74 to 1,423.19

Aired September 21, 2001 - 18:00   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: Good evening, everyone. The human toll from last week's terrorist attacks continues to climb. The total cost may never be known, but the effects on Wall Street are altogether too easy to calculate. Nearly $1.5 trillion of market value lost just this week.

The Dow Industrial average plunging nearly 1,400 points. This, the largest one-week point drop ever for the Dow. The Nasdaq, down 272 points on the week. The S&P's loss on the S&P 500, 127 points.

Last week's terrorist attacks have cost the nation's airlines billions of dollars, but some critics wonder if the federal government should bail out an industry without first asking airline executives to cut their own salaries. We'll take a look at whether or not that is a fair request, when we look at airline CEO compensation.

And as the costs related to the attacks continue to rise, many are wondering how the federal government will pay for it all. We'll have a report for you from Washington.

We'll also hear from General Electric's chief executive officer, Jeffrey Immelt. He is promising double-digit earnings growth, despite this environment.

And what does all of this mean for gasoline and heating oil prices? We'll be talking with the chief executive officer of oil giant British Petroleum.

Here are the latest developments in America's new war. Scotland Yards, saying three men and a woman have been arrested now, in connection with the attacks on the World Trade Center. The three were arrested in London, the fourth was arrested in the West Midlands today.

The United States has rejected the Taliban's latest request for proof of Osama bin Laden's involvement in the attacks. The White House says President Bush's demands simply are "not negotiable, not for discussion." Meanwhile, the Bush administration continues to build the international coalition to fight terrorism. Secretary of State Colin Powell met with China's foreign minister today. Intelligence experts from China and the United States will meet next week. The FBI is searching for than 230 individuals in connection with the attacks. The FBI has already received more 134,000 tips. Dozens of people have been detained or arrested.

And Attorney General John Ashcroft and FBI director Robert Mueller today toured the World Trade Center wreckage. Afterwards, the attorney general pledged an additional $10 million to assist the New York police effort.

Well, on Wall Street, the Dow Jones Industrials dropping more than 14 percent on the week, the Nasdaq down 16 percent on the week. The S&P 500 down more than 11 percent. We have, in fact, just erased the last three years of gains in these markets. Christine Romans, Greg Clarkin join us with more.

Christine, to you first at the New York Exchange.

CHRISTINE ROMANS, CNN CORRESPONDENT: And, Lou, when you look at the percentage basis of this week's loss, it is worse than back in 1987 and back in 1929, when we saw those market crashes. Today the Dow lost another 140 points, closing sharply lower for to week, 8,235 is the level there. The Dow losers this week were many, and the losses were severe.

Take a look at some of these. United Technologies, 35 percent of its value, wiped away in this one trading week. Honeywell International down 32 percent, Boeing, down 31 percent. Eastman Kodak, down 28 percent. There were losses across the board -- airline stocks getting hammered this week. Traders saying they are worried about a recession, Lou, and they're worried there could be more losses next week.

DOBBS: Christine, thank you. Well, including this week's losses, the Nasdaq composite index is now 75 percent off its all-time high. Greg Clarkin joins us now from the Nasdaq marketsite -- Greg.

GREG CLARKIN, CNN CORRESPONDENT: And, Lou, this was the worst week for the Nasdaq since the crash of October, '87. It was down 16 percent on the week. Now, what we saw today was sharp selling at the opening, then the Nasdaq settling into a very quiet trading pattern. It ended up losing 47 points on the day.

Big caps, again, under big pressure. A lot of folks not wanting to be in stock positions heading into a weekend -- that's two days of uncertainty, there. But also, the airline stocks, as Christine mentioned. Take a look at the weekly losses for Northwest, Mesa, Skywest and Amtran.

Now, one little pocket of strength today: fuel cell companies. These are companies that develop electricity from hydrogen. With concern over possible fuel sources in the wake of the terrorist attacks, these stocks all rose today: Ballard Power, FuelCell Energy and Plug Power. But again, the bright spots were few and far between today, Lou, and the Nasdaq wraps up its third-worst week ever.

DOBBS: The fuel cell in gains there, that you point out there, Greg, are remarkable in that the experts that I've talked with say that fuel cells, as a practical application, are years away.

CLARKIN: Exactly, and that has been one of things that have been nagging at those stocks, if you will. In the weeks -- over the last few weeks or so, last few months, that this technology is nowhere near coming to market, but still today, a lot of folks looking around, maybe, for somewhere the tuck a little money, and they chose those stocks.

DOBBS: OK, thank you, Greg.

Even before last week's terrorist attacks, layoffs in this country running at a record pace. Now the situation has worsened, and worsened considerably. Allan Chernoff has the report.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): At New York's LaGuardia Airport, there is a new fear. On top of that anxiety over terrorism, now, worry about layoffs.

LUCINDA MELEDANORI, CONTINENTAL AIRLINES: Everyone -- they're scared. They're scared. They don't know what's going to happen.

CHERNOFF: Never before has the airline industry announced so many layoffs so quickly, 80,000 since the terror attacks. And Delta plans a huge reduction next week. As executives cancel flights, they say job cuts are unavoidable.

GORDON BETHUNE, CEO, CONTINENTAL AIRLINES: We've only sized our airline to 80 percent, even though we only need about half of it today, given the demand.

CHERNOFF: Airlines are postponing orders for new aircraft, leading Boeing to plan cuts of up to 30,000 workers. Other industries that rely on airlines now are considering cutbacks: in-flight caterers, travel agencies, and retailers at airports.

VICTOR LOPEZ, BROOKSTONE: There's not that many coming through here, so not a lot of people are eating. Not a lot of people are in the mood to go shopping.

CHERNOFF: Hyatt Hotels tell CNN it may cut up to 1,200 jobs. It has already reduced schedules for hourly workers, as has Starwood- owned hotels.

BARRY STERNLICHT, CEO, STARWOOD HOTELS: I'd expect that our industry would see 40-50 percent occupancies for some period of time, until our response is clear. And we're basing our staffing levels on those kinds of occupancies.

CHERNOFF: Companies outside travel are also laying off, from computer storage firm, EMC and semiconductor equipment maker Applied Materials, and photo giant, Eastman Kodak. The latest tally of layoffs since the attacks at airlines, aerospace companies, New York- area hotels, high-tech and basic material firms: more than 178,000 workers. . RON BLACKWELL, AFL-CIO: Consumer spending is based on consumer confidence. And when firms start laying off workers in this mass scale, it's striking a blow at the only pillar that's holding this economy up.

(END VIDEOTAPE)

CHERNOFF: The layoff count for the year: more than 1.25 million jobs, a pace nearly triple that of last year. Corporate executives in a broad range of industries appear to be getting ready for a protracted recession -- Lou.

DOBBS: Or, Allan, one could argue, contributing to the prospect of a recession.

CHERNOFF: No question about it, Lou. These layoffs certainly could hurt consumer confidence quite a bit.

DOBBS: Allan, thank you very much. Allan Chernoff.

Well, not just layoffs, but costs are rising. From relief efforts to airline aid, to future security and a war on terrorism, the price could run to the hundreds of billions of dollars. And how will we pay for it?

Tim O'Brien has the story.

(BEGIN VIDEOTAPE)

TIM O'BRIEN, CNN CORRESPONDENT (voice-over): In outlining the U.S. war on terrorism, President Bush asked the American people for their courage and their patience. But the path on which the nation is now embarks will also be costly.

BUSH: We will direct every resource at our command to the disruption and to the defeat of the global terror network.

O'BRIEN: That will mean, among other things, reviving an expansive, and expensive, covert intelligence network.

BUSH: So tonight I announce the creation of a cabinet-level position reporting directly to me, the Office of Homeland Security.

O'BRIEN: But it's hard to put a price tag on the cost of coordinating the country's domestic response to terrorism. And should the lengthy campaign the president envisions develop into an open- ended conflict, its cost could become a blank check. Congress has already approved $40 billion in emergency relief, a down payment on what's to come. And the administration also wants untold billions: to overhaul airport security, to set up a relief fund for the victims of last week's terrorism and to increase the Pentagon budget.

And where will all the money come from?

SEN. KENT CONRAD (D-ND), BUDGET CHAIRMAN: There's no question about it. Social Security payroll tax monies will be used to fund other operations of government, and to a very significant degree, next year, and, unfortunately, for probably several years thereafter.

O'BRIEN: Given the sagging economy, some economists say there is no other prudent alternative.

RICHARD KOGAN, POLITICAL ECONOMIST: If you raise taxes now, or cut spending, you just give the economy another kick in the shins.

(END VIDEOTAPE)

O'BRIEN: A spokesman for House speaker Dennis Hastert said there were always two exceptions to the Social Security lockbox: war and recession. With the country now on the precipice of both, the lockbox is wide open -- Lou.

DOBBS: And, Tim, as the costs mount, in addition to of course the devastating human toll, but as the costs mount in the World Trade Center tragedy and at the Pentagon, the price may not seem so high in retrospect. Tim, thanks very much. Tim O'Brien.

Well, as the United States and its allies prepare for a global war against terrorism, what will be the economic implications? Kathleen Hays is here now and has a closer look for us -- Kathleen?

KATHLEEN HAYS, CNN CORRESPONDENT: Yes, I do, Lou, and I want to start by talking about the peace dividend. As you all know, the peace dividend, which occurred when the Cold War ended and the Berlin Wall fell, is a very important part of the 1990s economic expansion.

Government spending, for example, fell from over 5 percent of our gross domestic product, our economy's growth rate, to less than 3 percent over the 1990s. This helped fuel a private investment resurgence. Venture capital, research and development, high- technology development, that fueled a productivity boom. And of course, now economists are wondering if that's in jeopardy.

(BEGIN VIDEO CLIP)

RICHARD BERNER, MORGAN STANLEY: Really, it was a major factor contributing to the investment boom that we had. It contributed to national saving, and we freed up resources for doing other things. Now we're going to have to use those resources for defending our country and restoring security, and that's absolutely critical.

(END VIDEO CLIP)

HAYS: And of course, the good news is that we -- productivity was running so strongly when we went into the current era, the current episode we're facing now, that even if you shave it a bit, it's probably still in good shape.

There's another now. We talk a lot about increased defense spending being an economic stimulus, but war has costs, too. For example, we have a budget surplus that is shrinking. The more government spending rises, the more that surplus is going to shrink. That could put more pressure on long-term interest rates. Investor uncertainty, we're seeing that in spades this week in the stock market. People just aren't certain what will be the impact on consumption and production.

There's also a diversion of resources, away from some things we might want to produce to things we must produce.

(BEGIN VIDEO CLIP)

JOHN DUNHAM, AMERICAN ECONOMICS GROUP: War is paid for by people, which means that we're going to be paying money for uniforms, for tanks, for ships, that we would rather be spend on things like soda and movies and travel. And what's happening is there's a redistribution from uses that we want to uses that we have to do, but we don't want. So -- and those things that we're building are going to be destroyed.

(END VIDEO CLIP)

HAYS: It's interesting, when you think about the legacy of past conflicts. Vietnam was followed by inflation. the Gulf war by a recession.

DOBBS: Kathleen, as you look at those impacts, if you will, potential impacts, the fact is, these aren't rational economic choices we have. This choice is really forced upon us.

HAYS: Absolutely. I guess the good news, also, is that we've had a long expansion. We do have this big budget surplus,a highly- skilled work force. Our consumer confidence has been at high levels. It's taken the blow, but we have a lot of strength going into this, and you hope that it carries us through.

DOBBS: And historically, we have seen, with the first actions by the government, the military, that confidence usually is restored rather quickly.

HAYS: That's right. And I think some economists are hoping that's going to happen again, Lou.

DOBBS: OK, Kathleen, thanks. Kathleen Hays.

Well, the airline industry certainly, as it's been pointed out here, is not the only industry hurt by the dramatic slowdown in travel. Demand for New York City hotel rooms, theater tickets and dinner reservations have ground to a halt. Mayor Rudolph Giuliani is urging tourists now to help support the city's economy.

Fred Katayama has the report.

(BEGIN VIDEOTAPE)

FRED KATAYAMA, CNN CORRESPONDENT (voice-over): The signs get bleaker for the world's financial capital every day -- further declines on Wall Street, Times Square devoid of tourists, forcing a few Broadway musicals to sing their last song this weekend, and pushing the city's hotels to lay off 4,000 workers. JONATHAN TISCH, CHAIRMAN & CEO, LOEWS HOTELS: In the last couple of days, we've been reduced to about 40, 45 percent occupancy. So, about 50 percent of our business has just been wiped out.

KATAYAMA: The terrorist attack last week dealt a whopping blow to ground zero of New York's economy, Wall Street. It produces only 4 percent of the city's jobs, but accounts for 14 percent of output. Some economists estimate the attack cost $20 billion in physical damage, and 15 billion in lost economic output. And a further slide in the financial markets could deliver layoffs on the scale of the airline industry.

The city will directly receive roughly $20 billion in federal aid and $15 billion in insurance payments. But pessimists say that won't be enough to keep a $500 billion economy from sinking into a recession.

ROSS DEVOL, MILKEN INSTITUTE: We've lost, basically, a week's worth of output in the city itself, for the most part. And the tourism impacts, the hotels, the impact on the Broadway shows, and likely lower tourism as we enter the holiday season very shortly, it's very difficult to see how we won't see at least one negative quarter, perhaps two.

KATAYAMA: Economists say rebuilding New York will help its economy bounce back, possibly yielding 1/2 percent growth in the second half next year.

(END VIDEOTAPE)

KATAYAMA: And bond analysts say New York should not have trouble paying its bills, thanks to the federal aid. Consumers, they say, will bounce back and begin spending again once they see signs of rebuilding. The question: How soon will New York rebuild the city that never sleeps? Lou.

DOBBS: All right, Fred. Thank you.

Still ahead here on MONEYLINE, we'll go live down to the World Trade Center devastation. We'll bring you the very latest on the clean-up and recovery efforts.

As airlines ask for a multibillion dollar bailout package, should their chief executives be asked to take a pay cut? We'll take a look at their compensation and see whether or not that's a fair question.

We'll also hear from the new chief executive officer of General Electric: Jeffrey Immelt, promising investors today double-digit earnings growth.

And two weeks ago, oil prices were on the rise. Now they're hovering near $26 a barrel. We'll take a look at the future of oil prices and supplies next.

(COMMERCIAL BREAK) DOBBS: The latest developments now in America's new war. The Pentagon has announced it's invoking the Feed and Forage Act -- it goes back to the Civil War days. That, in order to cover costs resulting from the mobilization of the reserves, the call-up. That obscure law, allowing the military to spend more than Congress has authorized for things such as clothing, fuel, transportation, medical costs, including the call-up of the reserves.

Meanwhile, the European Union has reaffirmed solidarity with the United States. The E.U. saying it approves of targeted U.S. retaliation against countries harboring terrorists. French President Jacques Chirac saying, "To be clear, we will not sit on the sidelines in this battle against this scourge."

A Washington protest group says it plans to hold an anti-war march next weekend, around the nation's Capitol. The group saying its obtained permits for what it calls the first anti-war demonstration.

And in the wake of the terrorist attacks, federal securities regulators have decided to extend their order allowing companies to continue stock buybacks. It will allow companies to buy back their own stock in the first and last hour of trading, as well as bypass volume restrictions, through the end of next week.

Well, now let's go down to the devastation that was once the World Trade Center. Gary Tuchman joins us now and has more on the recovery and, one would hope, rescue efforts there -- Gary.

GARY TUCHMAN, CNN CORRESPONDENT: That's right, Lou, 24-hours, seven days a week for the foreseeable future, that will be the schedule for emergency workers behind me over at ground zero. It's been 10 1/2 days now since the disaster, and the numbers are still stunning. Six-thousand three-hundred thirty-three people are missing and presumed dead. That was the number yesterday.

Yesterday, we got a jolt when Mayor Giuliani, the mayor of New York City, raised that toll 900 because of other countries reporting citizens in the World Trade Center wreckage. But 6,333 is the current number, 252 bodies have been recovered. That's only 11 more than yesterday. That shows you how catastrophic the scene is.

The search effort does continue, as you look at new pictures that CNN shot today from the scene. There are people trained to look for survivors. They will stay on the scene despite the fact that it's considered very unlikely that anyone will be found alive.

Lou, back to you.

DOBBS: Gary, thank you very much. Gary Tuchman.

As Wall Street closes out the worst week since the Great Depression, 1933, there has been a flurry of buying in commodities. Gold and silver prices, rising again today. Gold nearing $300 an ounce, up $20 since last week.

And the CRB index of commodities slipping as oil prices retreat. Global economic concerns overtaking supply concerns, because of the rising military tension. Coffee prices continue to remain near record lows. Top coffee producers, such as Brazil, Colombia, Mexico, meeting today, planning to supply in an effort to lift their prices. Industry analysis warn there is an urgent need to address the problem, which is driving growers into bankruptcy and forcing millions out of work.

(BEGIN VIDEO CLIP)

GEORGE WILLEKES, HOLLAND COFFEE: I think eventually we will pay very dearly, internationally, and financially, particularly, to these countries in order to prop up their economies. So it's not in our interest at all, certainly, to let this go. Although, of course, we have to recognize that this doesn't make any headline news right now. So we have other issues which are very important. But ultimately, in the long run, something has to be done.

(END VIDEO CLIP)

DOBBS: Heating oil and gasoline futures extending their losses. One commodity trader in New York saying bluntly -- quote -- "You can expect prices will stay down until a real shooting war begins." End quote

With an apparent strike looming against Afghanistan, what are the possible effects on world oil supplies? How will those potential strikes affect the price of gasoline and home heating oil? Joining us now to discuss all of this and more, the chief executive officer of British Petroleum, Mr. John Browne.

John, good to have you with us.

SIR JOHN BROWNE, CEO, BP: Lou, very good to be here.

DOBBS: Let me ask you first, the security in times such as these has to be paramount. In your mind, is BP taking extraordinary steps here?

BROWNE: We have a well-practiced procedure, which, in times of crisis, we put up security at all our sites to look after the -- primarily, the safety of our staff, and secondarily, the security of supply. So that's in place, and it will stay in place for the foreseeable future.

DOBBS: In macro terms, if you will, how would you describe the world's oil supply situation now?

BROWNE: Well, right now I think the world is well supplied with oil. And I think that's evidenced by the dynamics of the price -- the price is coming down. And I think, looking at today's production levels, over a quite a few quarters, the world has ample supplies of crude being produced and delivered to consumers.

DOBBS: Now, what is your best judgment, as to what the impact of this war against terrorism? Looking, as it does now, that it will lead to strikes against Afghanistan, perhaps, one or two Middle Eastern countries -- but expressions of support from Saudi Arabia and much of the Middle East -- what will be the impact on the region, and that all-important oil supply in the region?

BROWNE: Well, I think the first thing is, it is tremendously heartening and very important, both politically and for business, that there is solidarity among 70 nations of the world, a vast number of nations. And it is in everybody's interest, of course, therefore, to produce a secure world. a world where people don't worry about security as quickly as possible.

I think if we look at our recent experience with the Gulf War, what I would say is this, is that there are many diverse supplies of crude oil. There's a lot of flexibility, which companies like us have, to keep supply lines open.

DOBBS: And for how long, in your judgment, would you be confident of doing that?

BROWNE: Well, I'm always confident for as long as I can see forward, and sometimes that varies, but right now I'd say, quite confident for some time.

DOBBS: OK. Sir John Brown, as always, good to have you with us.

BROWNE: Thank you very much.

DOBBS: Well, General Electric today further quantified the effect of the terrorist attacks on its earnings, estimating those attacks and their aftershocks will cut six cents off their profits per share this year, but the company says it will still deliver double- digit earnings growth -- and shares of GE climbing, as a result.

Peter Viles has the story.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): In a market in an economy desperate for confidence and visibility, the new chairman of General Electric provided both, saying GE, despite insurance losses and exposure to the airline industry, will deliver double-digit profit growth this year, and probably next.

JEFFREY IMMELT, CHAIRMAN & CEO, GENERAL ELECTRIC: Based on what I see today, which is a global slowdown plus a catastrophe, plus, you know, whatever we can tell about waging a war, we still feel comfortable with double digits in '02.

VILES: Immelt said GE's insurance, jet engine and cyclical businesses, such as broadcasting, will all suffer. But he called those problems, "manageable," and said they will be offset next year by profit growth in power systems, medical systems and GE capital.

Immelt as already under immense pressure to fill the shoes of Jack Welch, then the attack on the World Trade Center came on his second full day on the job.

MICHAEL REGAN, CREDIT SUISSE FIRST BOSTON: Jeff's performance was outstanding. On a scale of one to 10, it was an 11. VILES: But it was not entirely upbeat. Immelt says he does not see an economic recovery next year.

NICHOLAS HEYMANN, PRUDENTIAL FINANCIAL: I think his one comment about the outlook for next year was it's as bad as this year, or worse.

VILES: General Electric has donated $10 million to victims relief funds. Friday it ran this advertisement in newspapers.

IMMELT: It's a way for GE to say we love the people of this country. We love what they can do, and it's time to go to work. It's time to go to work and get us through this.

(END VIDEOTAPE)

VILES: Immelt repeatedly cautioned that when we're trying to analyze this economy, because it is in such an uncertain state, we should stick with exactly what we know with the data, with the facts. And he cautioned us to avoid what he called -- quote -- "thoughtless speculation" -- Lou?

DOBBS: How about thoughtful speculation?

(LAUGHTER)

VILES: He cautioned us against that, too. He said stick with the data. There's a lot of good data out there, and it showed that their business did not drop off dramatically after these attacks.

Peter Viles. Thanks very much.

DOBBS: OK. Jeffrey Immelt and Peter Viles, thanks very much.

Coming up next here on MONEYLINE, as the airlines await word on the bailout package, some members of Congress were scrutinizing airline company executive paychecks. We'll have that story for you and the surprising results, perhaps.

The nation's top law enforcement officials today touring the rubble of lower Manhattan. We'll bring you a live update. All that and more, still ahead on MONEYLINE. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Congress ready to vote on a $15 billion bailout package for the airline industry. Besides $10 billion in loan guarantees, that package will provide airlines with war risk insurance and $5 billion in directed aid.

Some lawmakers, however, want to make certain the airlines are being frugal, and that includes executive compensation.

Kitty Pilgrim has the story.

(BEGIN VIDEOTAPE) KITTY PILGRIM, CNN CORRESPONDENT (voice-over): When the corporate jet is an entire airline, just how do the executives get paid, and is it too much? That's the question Congress asked when the airline industry asked for a mulitbillion-dollar bailout.

UNIDENTIFIED FEMALE: I want to see some safeguards, to make sure it does not happen that some executive gives themselves an $11 million bonus.

PILGRIM: Airline executives pointed out their salaries are usually tied to a company's performance. That will not make them rich this year, when the industry is expected to lose billions.

LEO MULLIN, CHAIRMAN & CEO, DELTA AIRLINES: The executives in this industry are going to pay an enormous price for this. The vast majority of us have performance-based compensation as our principle component of compensation -- most of us have it at 75 percent or so. All of that would be clearly wiped out by this.

PILGRIM: A look at SEC filings backs up that statement. The top executives are paid under a million dollars a year, and options and bonuses are what put them in the millionaire status.

RAYMOND NEIDL, ABN AMRO: Compensation of airline executives that are going to be on bonus and stock options has evaporated. They're basically on base salary now.

PILGRIM: By comparison, one watchdog organization found compensation for semiprivate organizations runs much higher. CEO Franklin Raines of Fannie Mae earns 3.5 million a year, 16 million with options. Chairman and CEO of Freddie Mac, Leland Brendsel, earns 4.5 million, 12.6 million with options.

Analysts say compensation for airline CEOs will be a problem in the future: paying them enough to take the job.

NEIDL: If this goes on long enough, there could be a drain of top-level airline management to other industries.

(END VIDEOTAPE)

PILGRIM: Now, some comparison is being made to the government bailout of Chrysler back in the 1970s, and Chrysler chief Lee Iaccoca made the gesture of taking just $1 in salary at that time.

Lou, what's interesting, the Senate version of this bill that's going through has a provision about capping salaries. If you made more than $300,000 as an airline executive, they would cap your pay at the current level for the next two years. So, that is actively being discussed in Congress.

DOBBS: Well, with these kinds of federal dollars being put in support of companies in the industry, it perhaps is not altogether inappropriate.

Kitty, thank you very much Well, coming up next here on MONEYLINE, investors selling off heavily on Wall Street this week. We'll take a look at what was the worst week since the Great Depression. And we'll take a look at when there might be some buyers.

As sharp as the sell-off in the United States has been, the sell- off around the world has been even worse. We'll have a report for you on just how bad it's been. And as Americans dig deep to help in relief efforts, we'll take a look at how corporate America is helping, when MONEYLINE continues.

(COMMERCIAL BREAK)

DOBBS: Well, when looking back at the market during other times of crisis, Hugh Johnson points out that after the initial sell-off markets rise. But he cautions each case is different and advises investors to stay defensive. Hugh joins us now from Albany, New York.

Hugh, good to have you with us.

This is a...

HUGH JOHNSON, FIRST ALBANY: Nice to be here, Lou.

DOBBS: This is a remarkable week by any definition, the worst since the Great Depression. What is your best judgment as to what has taken place here?

JOHNSON: Well, you know, if there is anything that describes this week, it probably -- at least in my career I've never seen as much widespread fear among folks, particularly investors: fear of, you know, losing their jobs because they're worried about a recession. But most importantly, Lou, fear about the basically their nest-eggs, which are shrinking. So a lot of investors really just, I think, to some extent hit that emotional panic button, said: I've got to defend my nest-egg, I'm going to sell my stocks out and just hold on to what I've got.

You know, you had a very substantial, as you know, shrinkage in the net worth of households, almost 1.5 trillion as you mentioned before. That's an awful lot of money.

DOBBS: And it's a lot of money coming on one week, especially after we've watched over $4 trillion ripped out of the equity markets over the past year.

JOHNSON: No question about it. And obviously, that's what's raised so many worries among economists, well-founded worries, that that kind of shrinkage is going to send the so-called "wealth effect" into reverse or it's going to cause investors, who are also obviously consumers, to start to cut back on their spending, and then we'll have a full-blown recession, which looks like it's probably in the cards for the third and maybe the fourth quarters.

DOBBS: 80 -- 80 percent of economists surveyed now saying that they do expect a recession, as you know, Hugh. What is your best counsel to investors? We were talk before all of this started last Tuesday about a lack of visibility. If anything, visibility is diminished further.

JOHNSON: No question about that. The visibility is -- it's really hard. Investors are sending a very clear signal, and the signal is, is that they don't see any end to the slowdown, or worse, in this economy. The profits recession, there's no light at the end of the tunnel, and we're not getting anything said by companies that gives us any reason to believe that's going to be different, unless you listen to people like Jeff Immelt, which was very encouraging. That was probably helpful in stabilizing the markets today.

But you really need a much more visibility and you need it in the form of statements from companies that, look, the world is not falling apart. And hopefully, we'll get some of that over the course of the next month or two. We really need -- it's a confidence issue right now.

DOBBS: OK, Hugh, thank you very much for being with us, Hugh Johnson.

JOHNSON: My pleasure.

DOBBS: Stocks plummeting worldwide today, and that is the basis for an examination of just how bad things are in markets all around the world. Deborah Marchini with the story.

(BEGIN VIDEOTAPE)

DEBORAH MARCHINI, CNN CORRESPONDENT (voice-over): The mood in international markets is one of panic. At their lows, Germany and other European bourses were showing declines of 6 and 7 percent.

HENK POTTS, BARCLAYS STOCKBROKERS: The U.K. companies are exposed to the U.S. to the tune of 25 percent, and we have seen a massive sell-off here in London on what could be a historic and a horrific day in terms of the equity markets.

MARCHINI: The selling started in Asia. Tokyo's Nikkei average slumped more than 2 percent, bringing losses since the terrorist attacks to 6 percent. The Japanese got off easy. Frankfurt surrendered 19 percent, Paris is down 17 percent, and London off 12 percent.

It could have been considerably worse. European markets bounced off their lows not long after New York opened, when the Dow clawed its way back from a 300-point loss. U.S. stocks still finished sharply lower. In the first week of trading since the terrorist attack, the Dow has given up 14 percent, its worst one-week loss since the Depression.

RON HILL, BROWN BROTHERS HARRIMAN: We're getting into sort of the panic selling situation. That can feed on itself for a while. And so you have to sort of stand aside and let that exhaust itself, I think, longer term before you can really get aggressive again.

MARCHINI: Some analysts see a silver lining in what is literally a cloud hanging over Wall Street.

JOE BATTIPAGLIA, GRUNTAL & CO.: Investors priced the worst in stock prices, which means that expectations are the lowest they could possibly be. It looks like there is no good expectation for stock prices, and out of that may well be the salvation for the market.

(END VIDEOTAPE)

MARCHINI: Stocks may be cheap, but they could get cheaper still. Investors hate uncertainty. And right now, uncertainty, Lou, is about the only thing they can be sure of.

DOBBS: That's right. And we've just received the word that Conoco has issued an earnings warning, expecting those earnings to be some 25 percent below what had been earlier projected and what Wall Street had expected. Again, Conoco issuing an earnings warning.

Deborah, we thank you very much

Coming up on MONEYLINE, an outpouring of support from corporate America for the victims of the terrorist attacks against America: companies across the nation offering vast amounts of money and help to aid those victims and the rescue efforts. That story is next on MONEYLINE.

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DOBBS: Scores of companies have stepped up to offer help in the aftermath of the terrorist attacks last week, the corporate generosity unprecedented: donations of everything from cash to computers.

Hillary Lane has the story.

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HILLARY LANE, CNN CORRESPONDENT (voice-over): UPS donating its services to help get relief supplies where they're needed most, a contribution worth in excess of $3 million.

JAMES KELLY, CHAIRMAN & CEO, UPS: We have the capacity and the ability to use our vehicles and our aircraft, and the very generous support of UPS people to help with this relief effort.

LANE: Corporate donations in cash and kind have topped $120 million, the first big givers setting the pace.

DAVID VIDAL, THE CONFERENCE BOARD: A standard that is set in the peer group becomes the standard.

LANE: AT&T donating $10 million worth of prepaid calling cards for use by relief workers. Microsoft, 5 million in cash, 5 million in services, helping the Red Cross help others.

RICK BELLUZZO, COO, MICROSOFT: We have helped them, for example, to build a resource, a database, the ability to be able to bring missing people together, to be able to communicate. LANE: In addition to a million dollars in cash, BMW is giving 100 police motorcycles to help replace those lost. And eBay is asking every American to buy an item and sell one with all the proceeds and commissions going to the disaster funds.

MEG WHITMAN, CEO, EBAY: We turned company upside down, from product development engineers to our marketing folks, to our usability testing folks. Every part of our company got involved, and we frankly haven't even stopped to think about what it costs.

LANE (on camera): What's needed most now is money, and with many corporations matching contributions are adding up fast.

Hillary Lane for CNN Financial News, New York.

(END VIDEOTAPE)

DOBBS: And that is MONEYLINE for this Friday evening. We thank you for being with us. Have a very pleasant weekend. I'm Lou Dobbs. Good night from New York. Now Wolf Blitzer in Washington.

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