There is something extraordinary about flying from Asia to the U.S. and crossing the international dateline. I left Hong Kong on Saturday morning, flew for 18 hours and arrived on the same day not far off when I left. I was curious: had the same magic of economic recovery that I experienced in Hong Kong flown ahead and beaten me there? Or was it taking the Slow Boat from China — and I would be arriving back in a grim, old world?
New York is the epicenter of the financial crisis. The toxic assets created by derivates may have traveled far and wide, burying themselves deep into bank balance sheets around the world, but most of these financial viruses have their genesis in New York (or London, where I am headed next.)
Seminal moments of the great recession can be traced to this city, notably of course the collapse of Lehman Brothers, the investment and trading powerhouse, whose downfall last September has become the defining moment.
To understand what is going on would involve consulting further and wider than economists and market analysts. I have always believed if you want to know what is happening just look around you.
My first experience was in the cab from JFK to the city. Pre-crisis, the driver took home $150 a night after expenses. Today, he makes $50 — which is an improvement on earlier in the year when he was lucky if he made $35.
My next victim was a good friend who is an architect with his own private practice. He recounted one horrible week earlier this year when four major projects were cancelled. He cut back his staff’s hours. He hunkered down throughout winter and spring.
In the heat of summer he was still looking stressed but this time it wasn’t because of lack of work — it was because there is now too much of it. The phones are ringing again. Wealthy New Yorkers who put off renovations are now ready to build. Rather than moving, they are primping and pampering themselves with real-estate makeovers. My friend offered to pay for dinner.
So it went on. Midweek, I went to dinner at an expense-account restaurant. The place was heaving, packed with people doing damage to corporate charge cards. The marketing director of the hotel where I was staying said the rooms were full, not at the rate she would like to charge, but with a bit of crafty pricing she could fill the hotel.
I heard tale after tale of “light at the end of the tunnel”. The gloom is beginning to lift and projects are being dusted off and considered. The anecdotal evidence was bearing out the economic numbers; confidence was returning, and there was a decided feeling that “the worst is over”.
Much of this cheer was, of course, being fuelled by Wall Street’s latest bout of exuberance. Even though to many tutored eyes the rally has little basis of support, you can’t argue with the facts. And so the rising tide of the stock market has carried with it the boats of optimism and hope.
I now leave New York and head to London for the final leg of NYLONKONG. My time in the city has been instructive indeed.
To be sure, NY optimism may be growing, but it is only an inch thick. Battered, bruised and beaten up, no-one is prepared to really celebrate just yet. There is a feeling that there could be another brush with disaster before this crisis is over. Which is why I told my architect friend to keep his credit card in his wallet. It was far too early to be offering to pay for dinner out of his own pocket. We looked at the bill, added on a generous tip… and went Dutch.
– End –
Richard Quest is a CNN correspondent based in London,
host of the weekday one-hour program “Quest Means Business”.
For program highlights and more, go to www.cnn.com/qmb
