There Won't Be War

The London FT 100 share index closed down 467.3 points at 2891.7, the largest fall on record since Meltdown Monday or the Wall Street Crash of 1929. The ECU was down 43 Kopeks against the Rouble, to an all-time low of 72 Kopeks to the ECU. Two hundred billion ECUs were knocked off shares Europewide in what commentators have been calling “the Greenback War.” The Russian surprise attack this morning caused complete havoc, catching virtually every European conglomerate on the hop. Long-term consequences are uncertain, but massive upheavals are expected in every market and a wave of panic-selling cannot be ruled out.

Among the most bizarre developments of today was the attack by IBM (US) on Mercury Telecom, which was hijacked—there is no other word for it—for an outlay estimated conservatively to be triple its market value. Just what strategic priority IBM places on Mercury cannot yet be assessed, but the sheer scale of the offensive, taking place within hours of the Soviet attack, cannot be a coincidence.

In the United States, the Treasury Department commented on allegations of an “unholy alliance” between IBM-Telecom and the computer and communications companies AT&T and DEC:

“All such allegations are specious and utterly untrue. We wish to make it clear that no American corporation would dabble in diabolism—you may remember the rumours concerning Proctor & Gamble’s trademark, which was subsequently changed following Moral Majority pressure. Any rumours of an ‘unholy alliance’ must, a priori, be considered to be malicious gossip and insider scaremongering. Rumours that we are investigating these corporations for monopolism will not be addressed at this date.”

There has been no official White House response so far, but a presidential aide has announced that President Jackson will make a substantial statement on the issue tomorrow. It is to be hoped that the President will bring to bear his usual combination of intellectual precision and raw charisma on the issue; at the very least his presence is expected to have a calming effect on the nation. The importance of this speech cannot be underestimated; as the first black president of the Republic, as its leading intellectual and the most popular supreme executive since John F. Kennedy, anything he says may make a decisive impact on the situation. Meanwhile the atmosphere in New York today is one of quiet tension as millions of stockbrokers and company attorneys stay glued to their screens watching the carnage in Europe unfold, and all of them must be asking the same question: “Will it be our turn tomorrow?”

The situation in London this evening is calm but tense, with rumours of imminent government intervention if the situation deteriorates tomorrow. The European multinationals are feverishly negotiating massive mergers which will put them temporarily out of reach of the Russian raiders, even though antitrust legislation will inevitably break them up within a matter of weeks or months; meanwhile, bank interest rates are expected to go through the roof tomorrow. Already estate agents in central London have been offered houses at less than three-quarters of their market value, in the first ripples to spread out into the broader economy.

Several smaller brokers ceased trading this afternoon, with three companies filing for bankruptcy. These firms were unable to invest heavily in ISDN communication systems and artificial-intelligence-based dealing desks; when SEAQ overloaded this afternoon their dealing error margin increased catastrophically until they were caught in the general maelstrom of disinvestment by panicked shareholders ...

NewsBurst:— 18:09 G.M.T.

Downing Street has announced the resignation of the Chancellor of the Exchequer, and his immediate suicide by hara-kiri over the events of this morning. The announcement from the P.M.’s office confirms rumours which have been circulating since late afternoon, It is believed that Bank of Europe officials informed the Prime Minister that the current rate of disinvestment could drive UK industry into bankruptcy in five days’ trading if strict monetarian policies were adhered to; knock-on effects could be expected to devastate the rest of Europe within a week at most. Despite her well-known attitude toward interventionism, the Prime Minister made a statement supporting certain preventative measures at her recent press conference:

“It has come to my attention that the current catastrophic situation in the markets is the result of a complacent attitude towards foreign investment and trade, coupled with a very aggressive, not to say unprincipled, foreign assault on our entire industrial capacity.