9/11 was laden with profit for ultimate insider

Finance | Andrew Wong 13 Sep 2021

I have talked about black swan events that are rare but do occur. The 9/11 attacks 20 years ago can definitely be called a classic black swan event since no one could ever have predicted the twin towers would fall in a terror attack.

Only, this black swan event was carefully planned and effectively implemented by Osama bin Laden and his terror group, so some could still have predicted it in hindsight.

If those led by bin Laden had other considerations, then others, too, can come up with vague predictions of some crisis in the markets by looking for clues, such as anomalies in the financial markets.

Of course, it is difficult to envisage predicting a 9/11 event with anything remotely accurately, but to hedge one's exposure by reducing one's holdings is possible.

In fact, a lot of evidence showed that Laden's al-Qaeda group knew, before carrying out the attacks, that 9/11 would trigger financial market turmoil.

They used the futures market, included buying a large number of short options in the American aviation industry, hoping to make huge profits after 9/11.

In the wake of the event itself, the world's aviation market was in a panic.

People had doubts whether it was safe to use civilian planes.

The US aviation sector was hit especially hard, sinking into a depression, while bin Laden made huge profits by short-selling airline stocks, becoming one of the few who could benefit from the event.

Of course, that should not be surprising or worth boasting about since bin Laden had masterminded 9/11 after all.

However, it is still interesting today and well worth studying, for it offers a case study on how airline shares were sold short before 9/11.

The way the Biden administration handled the withdrawal of American and allied troops from Afghanistan is so poor, especially with a suicide attack occurring at Kabul Airport during the retreat that caused a large number of casualties.

That attack and other misreadings reflect serious shortcomings in US intelligence, so is it at all possible that the United States will be the target of another 9/11 attack?

For a sign of that, investors will have to watch out for any changes in the financial markets.

I will talk about them next week.

Andrew Wong is chairman and CEO of Anli Securities

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