Editor's Note: On October 4, leading industry observer Nick Murray gave us his thoughts on the implications for the economy and the stock market from the terrorist attacks. Murray, whose latest book, The New Financial Advisor, was just published, also spoke about client psychology and how advisors can succeed in these turbulent times.

Simonoff: Since September 11 and the week of September 17, we've seen a return to at least some normal level of economic activity and a rebound in the stock market. But there seems to be some serious damage to the nation's psyche, which probably is normal, but which clearly is related to the omnipresent and hidden nature of terrorism. Some people like Sir John Templeton would argue it's different this time. Is it?

Murray: It's new as Pearl Harbor was new, as the Cuban Missile Crisis was new. Vietnam was new, the Cambodian incursion was new, the killings at Kent State were new, the confluence of OPEC and Watergate were new, stagflation was new, the October '87 stock market event was semi-new, and Long Term Capital Management was new. There's a difference between new and different. My argument is that a contextless disaster is itself a context.

Simonoff: Many people who aren't worried about the economy or the stock market are worried that the world is entering a dangerous period. There seem to be a lot of people in the world who hate this country, and some are willing to sacrifice their lives to harm it, and turning that around isn't going to be that easy.

Murray: I'm not sure you ever turn that around, and I'm not sure it's going to take a lot to neutralize it. I don't think that is the operative variable.

Simonoff: What is?

Murray: Fiscal and monetary stimulus on a scale that I don't believe I've ever seen in my life.

Simonoff: I don't think the Fed has ever cut rates this hard this fast.

Murray: Up until September 17, this round of cuts was second to 1982. It no longer is. This is the deepest, fastest interest rate cut in American history, and on top of it you have a fiscal stimulus which, to pick a number off a bus, looks like $100 billion, plus or minus $50 billion.

Simonoff: Politicians in Washington sense that there is a crisis in confidence in the economy more than the stock market.

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