In the middle part of the last century, as the U.S. reeled from a tumultuous world war, President Franklin D. Roosevelt issued regular radio addresses to calm the nation. Bob Froelich, a well-known author who heads investment strategy for Zurich Scudder, hosted similar addresses last week for the same purpose.
In an effort to calm the public and become known as a key resource to financial advisors, Froehlich was expected to lead nearly a dozen conference calls last week, allowing executives to air concerns and ask questions about the markets. The conferences were not available to the public.
Response has been impressive, said Scudder spokeswoman Laura Trumble. As of Wednesday, a total of at least 800 executives logged into the conference calls. The number reflects the phone lines that connected to Scudder for the events; the company envisions several executives gathered around speakerphones, bringing the estimated number of participants much higher, Trumble said.
The conferences, which include analysts of the oil, airline and insurance industries, begin with a rundown of the day's events on Wall Street. Froehlich then rattles off the headlines he sees driving the markets. "Greenspan tells Congress not to rush to provide economic stimulus packages," Froehlich deadpans. "Pentagon deploying armed forces. Nineteen billion in emergency funds requested by Pentagon for weapons. U.S. rejects Taliban demands. Twenty-thousand jobs cut by American Airlines." The list goes on.
A Wednesday evening call included the company's head airlines analyst, Vic Khaitan, who solemnly noted that airline stocks are down 58% after the plane hijackings and ensuing attacks of Sept. 11. "It's a total disaster for any investor," he said.
Khaitan and Froehlich then fielded nearly a dozen questions about airline liability, government aid packages and what airlines need to do to dodge widespread bankruptcy. The questions came from across the nation, from Chicago to California.
"What about Southwest Airlines?" one executive asked. "What about new technology allowing ground control to safely land airliners remotely?" asked another, who quickly realized he was considering a matter of science fiction. "Is Boeing jumping the gun?"
There are no quick or easy answers, Froelich said.
Indeed, the conference was punctuated by calm voices with no sure answers at all. And the activity of investors has reflected that, said Scudder president Thomas Bruns, who also sat in on Wednesday's call. "The volumes have not been abnormal as we've rolled through this week," Bruns said. Unexpectedly few investors are calling the company. Purchases and redemptions are surprisingly few, he said. But Scudder has seen a "huge influx" of cash into money market accounts from institutional investors, he said, some $1.5 billion during the early part of last week, he said.