10/31/2012 6:45 PM ET|
Will Sandy blow down the economy?
Damages and lost business are estimated at $50 billion. But by rattling consumers and Wall Street, the storm's real toll could be much greater.
Damage from Hurricane Sandy in the Rockaway neighborhood of Queens, New York.
All at once, the plans of men were made to look meek as one of the most powerful Atlantic storms on record roared ashore Monday night. Hurricane Sandy knocked out power to lower Manhattan, flooded the financial district and caused chaos in our nation's largest city. The superstorm cut power to about 8.1 million customers.
One early estimate put overall damage and lost business at roughly $50 billion; that could grow once those miles of subway tunnels are drained of seawater and an army of insurance adjusters puts boots on the ground.
But Sandy will hit the economy in much deeper ways. No, we're not anywhere near the impact from the earthquake/tsunami/nuclear meltdown that hit Japan last year. But given the fragile state of the economy, Sandy could pull growth of the gross domestic product down from 2% toward 0% in the months ahead. Over six months, that could be a loss of output of roughly $140 billion
Combined with other negatives, from the looming "fiscal cliff" in Washington to the ongoing European debt crisis, this will only make life tougher for investors. Here's where trouble will arise, as well as a few ideas on how to protect yourself:
The direct costs
I see three big ways Sandy will affect growth.
The first is through the economic losses that come as damaged and flooded cars are scrapped, furniture is thrown out and subway systems repaired. Initial estimates from Eqecat put this drag at $20 billion -- far from the $280 billion losses incurred in the triple-threat Tohoku disaster in Japan last year. Still, if these initial estimates are correct, Sandy will be the fifth-worst hurricane on record, accounting for inflation, according to the Insurance Information Institute.
In the context of other recent disasters, Sandy is roughly equivalent on this measure to the Russian wildfires caused by the heat wave of 2010, which destroyed nearly 3,000 buildings. (The human toll was much higher in Russia, though, with more than 50,000 people killed).
Both Japan and Russia took hits to their GDP growth rates a result of those disasters. Russia's growth dropped from 1.7% in the second quarter of 2010 to 0.3% during the disaster, before bouncing to 2.3% in early 2011. In Japan, the growth rate plunged to negative 2% before rebounding late last year as government rebuilding efforts revved up.
The consumer impact
The more important consideration, and the one that I think will be have the larger impact on the U.S. economy, is Sandy's influence on consumer sentiment heading into the critical holiday shopping season.
Already, shoppers have been propping up the economy up as businesses pull back. Manufacturing activity has stalled. New orders are down. CEOs have cut back on plans to invest and hire. Inventories are down.
The regional Federal Reserve manufacturing activity reports make for depressing reading. The latest out of the Dallas Fed shows a nasty combination of rising materials costs and plunging new orders.
Yet in the latest report, the Conference Board's Consumer Confidence Index has jumped back above the 70 level (1985=100) for only the third time since the recession ended. More consumers are making plans to buy things like cars, appliances and televisions.
Credit Suisse economists note this is a big reversal from the early stages of the recovery as GDP categories like housing and consumer durables spending have "punched above their weight in the recent quarter" while "business investments and exports have slackened."
To put it in numbers, consumer spending jumped 2% and residential investment surged 14%, while business investment dropped 1.3% and exports fell 1.6%,
The key in all this is that households remain unconcerned about the fiscal cliff -- the package of tax hikes and spending cuts worth some 5% of GDP set to hit on Jan. 1 unless Washington acts. CEOs are acutely aware of it. CEOs tend to have a better read on the situation during major economic turning points. They were nervous in the middle of 2007 before the recession and financial crisis struck, and they were confident in mid-2009 as the recovery was starting. Households were confident in 2007 and nervous in 2009.
I've been expecting consumer confidence to come down later this year as the media starts covering the fiscal cliff in earnest in November and December -- after the election. Sandy's impact could pull it down even sooner, dragging on GDP growth in the fourth quarter.
Again, the Japanese experience is illustrative. Consumer confidence dropped hard from 40.6 during the March 2011 disaster to a low of 33.4 two months later as people watched the mismanagement of the Fukushima reactor meltdown and the slow pace of rebuilding. Consumer spending cooled, as did retail sales. On a year-over-year basis, sales dropped 8.3% in April of 2011 and an additional 4.8% that May.
A similar, if less severe, drop is likely as America's most populous city recovers from record flooding, fires and power outages. Experiences like these lay bare just how fragile modern society is and how quickly things can devolve. Since the economy lives and dies by decisions made on the margins, it's hard to see how this won't have a negative impact as people decide it's best to save a little more rather than splurge.
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Man, oh man ---- the next thing we know, our economy will be catastrophically blown away by the Yankees losing in the playoffs. What kind of article is this? Ya know ---- it's ok if you don't have anything with substance to say. Take a day off and do some deeper investigation into all of the stocks your review, or take a walk and think about what can be done to get the economy running stronger, or stay home and make some homemade soup. Jeeeeeeeeeze, I used to look at your articles for something with substance, but substance today should be in the form of a few more carrots in that soup...
The problem with lyin Willardo is what he owes the government in taxes that he has evaded. He has yet to report one full year of any federal tax return. Once the government found out that he has hidden accounts overseas, he did not release his 2011 returns as it was not reported in there. His accountants are working on it now. When he does release the last 5 years, he may be arrested for tax evasion.
The only reason people open overseas numbered bank accounts is to evade taxes on unreported income. It is estmated by some, that lyin Willardo, the Mexican Mormon Moron tax evader, bankrupter, draft dodger, job outsourcer and Etch a Sketch champion has hidden about 32 million in numbered accounts in the Cayman Islands and Switzerland. Unnamed workers at these banks sent this info to the IRS.
Hopefully, they will arrest this right wing criminal tax evader before the election.
This is why he won't release the last 5 years of his tax returns.
I wonder if that is where he keeps his Mexican birth certficate also
Even totally braindead repuke fruitcakes have to admit that lyin Willardo would be suing Reid if the allegations were not true and showing his tax returns to prove it. He can't, because it is true. Reid really wants the lyin'Mexican Mormon Moron to sue him, so he will have to open up his tax records to the public. Brilliant move. Then off to jail for lyin Willardo. Hopefully, they will send this tax evading criminal back to jail in his birthplace in Tijuana. We don't want to pay for his jail expense here.
The true backers of the right wing nut party.
The repukes need someone exciting and different, someone like Mark Sanford, the former Governor of South Carolina, who cheated on his wife by going to Argentina to see his soul mate. He told his wife that she should not mind because Jesus said it was okay to do it. Or maybe the head of the Westboro Baptist Church who protests at dead soldiers funerals that they deserved to die, or maybe Senator John Ensign of Nevada, who screwed one of his best friends wives. Then apologized and paid them both off not to say anything about the affair. The he seduced her again. Or maybe you mean "Toe Tappper" in the toilet stall, Senator Larry Craig, who wanted to have sex with someone in a public restroom toilet. This Craig duped his evangelical nutcase followers by telling them that he was a god fearing man. So he tapped the foot of the guy in the next stall several times. Unfortunately for Craig, the guy was an undercover officer and he got arrested. Now we have another evangelical rapist. Dale Richardson, who is a pastor or priest in SC who was supposedly cured by Jesus, has been arrested for raping 3 women. I guess Jesus gave him the wong message.
Or should we look forward to the current Governor of Alabama who said he would not help anyone who is not Christian.
Of course we can't leave out Herman (9Kamph) Cain, the dress slitherer. He claims he never did anything wrong. Another lyin Willardo, the Mexican Mormon Moron tax evader, bankrupter, draft dodger, job outsourcer and Etch A Sketch Champion.. And how can we forget Clarence Thomas, the womanizer, who the repukes put on the supreme court, despite Anita Hill taking a lie detector test saying she was telling the truth.
However, I think the best repuke candidate with excellent morals is Arnie Schwarzenegger. He jumps anyone he can.
Speaking of no record to run on-
Of course, lyin Willardo can run on his record of tax evasion, bankrupting, job outsourcing and draft dodging.
The congress had a 23% approval rating before the right wing radical cracked teanut dopes were elected. Now it is about 11%, the lowest in history.
The first two thing these repuke freaks did when in congress was to try to get two bills passed making Creationism the equal science of evolution and abortion banned. Nothing about jobs.
Even Ron Paul drops the "lying, cheating, criminal" repuke dunce party.
This is great news. Gary Johnson may take away some of the Mexican Mormon Moron's votes.
This is great news for Obama. Ron Paul has "washed his hands" of the republican party after 30 years. He claims they are liars, cheats and criminals. His backers will probably not vote for lyin Willardo, the Mexican Mormon Moron tax evader, bankrupter, draft dodger, job outsourcer and Etch a Sketch Champion. This should easily allow Obama to win. His backers are considering drafting Gary Johnson, the former governor of New Mexico to run.
Johnson, in my opinion, is too honest to win. He is truly, the only decent candidate the repuke freaks had, but they shut him out. Repukes - the party of voter supression.
"The irony of the announcement by Congressman Paul is that it was the Republican party who first rejected him, long before Paul's decision to wash his hands of the GOP. During the primary campaign season, multiple Republican committees in states across the country used rule changes and local law enforcement to ensure the Texas Congressman did not succeed in winning primaries. Couple this with the fraudulent attempt to keep Ron Paul from being nominated at the Convention by stealing his delegates in Maine, and in other states, and it is no surprise that the soon to retire Congressman has had enough of the corrupt political party he supported for more than 30 years."
So who do we have faith in?
The smart sharks who run everything, and are making sure China and India profit while they sell out this country, OR the voting public -- largely a bunch of obese morons who watch the Jersey Shore and Kardassians?
This country is going the way of the corrupt Romans or Ottomans - to eventual collapse.
Its a shame there wasn't a military coup years ago to get rid of the corruption.
The economy was, as you say, ruined, well before Sandy. In fact, you could say that the economy was 'ruined' when Nixon uncoupled the dollar from the gold standard in 1971, allowing the growth of the
bakers and rather imaginative financial alchemists to conjure up all kinds of pretend wealth schemes, such as monetized debt. Debt became the new fiat currency because there was not enough real wealth in the world to make all the people who want to be rich, actually..well...rich. Now, everybody who wants to can feel rich with huge fat portfolios and bank accounts can certainly do so. Unfortunately, all this toilet paper 'wealth' must vaporize back into the thin air from which it was conjured. The Fed cannot print enough Benny Bucks to prevent a 'correction' from occuring. The aftermath of Sandy is just one of those tipping points of reality. Acutal destruction requires actual CHEAP materials and energy to rebuild; we are out off both in this country.
The catholic nuns really helped turn this race around for Obama, in my opinion, when they started their bus tour to explain to people how Lyin Ryan and Lyin Willardo were going to destroy medicare and healthcare as they know it.
When nuns and bishops speak out against the criminal repukes, they should be congratulated for it.
This "Baindead" pick of Ryan is going to cause lyin Willardo, the Mexican Mormon Moron to lose the nun and bishop votes. They HATE Ryan and his lies.
Any senior or anyone else on medicare who votes for a pathetic, psychotic, facist repuke for president is cutting their own throat. Your medicare costs will go up about $6,000 a year, and your secondary insurance will skyrocket. This is according to the CBO. The National Council of Bishops who support the lying repukes only because of abortion, have highly cr iticized the Ryan voucher plan as being cruel and harsh and can't support it. It gives an average $250,000 tax cut to millionaires while cutting medicare.
There is a group of nuns travelling around the country who call themeselves "Nuns on a Bus". Their goal is to correct all the false information and lies spread by Paul Ryan that his plan is going help anyone but the wealthiest 2%. They also claim the the Ryan plan is a disaster for the poor and needy people in this country and that you should vote against the republicans.
Once the medicare funds get into the hands of the repukes corporate criminal backers, it will be destroyed.
Repukes are typical right wing dunces that listen to Fox Lies with Eric Bowleggs, David Axxwipes and The Sludge. Even Miss Piggy has more brains than these braindead repukes, as she knows that Faux News is only a pretend news channel and is only a poor excuse for a comedy channel.
There had to be a reason that Rick the Dick Sanitarium and Nut Gingerhead, the criminal lobbyist both agreed that lyin Willardo is the worst person to ever run for president in U.S. history, that he can't be trusted and will destroy our country.
They both brought Etch A Sketch boards to their news conferences to prove their points.
Lyin Willardo, also known as the Slapped Axx Mexican Mormon Moron after Candy Crowley corrected him after one of his lies. He truly looked like the slapped axx that he is.
Now he was outed by GM and Chrysler after his lies about Jeep closing down and moving all of their jobs to China.
Lyin Willardo, the Mexican Mormon Moron tax evader, bankrupter, Etch A Sketch Champion, job outsourcer and draft dodger may be the worst repuke dunce of all. This guy has yet to provide his tax returns for the last 5 years. It should show how much he has evaded in taxes and how much unreported income he has stashed away in Cayman Island and Swiss bank accounts. He is your typical right wing thief.
There have been many rumors going around that little lyin Willardo was seen in a baby carriage in Tijuana. with a bottle of Corona Light in one hand and an Etch A Sketch in the other. The side of his carriage had the name "Little Lyin Willardo" on it. So when we see the long form of his birth certificate and it says Willardo on it and not Willard, we will know something is wrong.
Isn't it funny, that his new buddy Fox Top Trump never asked lyin Willardo for a copy of it?
What a joke. Less and less of the stupid right wing nuts come out to back lyin Willardo, the Mexican Mormon Moron tax evader and bankrupter and they rave about it. As most people know, the evangelicals consider the mormons an evil anti-christ cult. The mormons have been converting dead jewish people, without their knowledge to become mormons to enhance their religion. They baptise them when they are dead. These sick aholes were caught when they tried to convert Anne Frank to be a mormon. These repuke dunces best bet is to bring back Herman (9Kampf) Cain, the dress slitherer. He can draft Jerry Sandusky for V.P. Who cares what they have done in the past, they are against abortion, that is all that counts.
CAIN/SANDUSKY 2012. The true repuke family values candidates.
The repuke dunce party. A disaster wating to happen.
Ban abortion, Ban contraceptives. Have biblical fairy tale Creationism taught in all schools as a true science, force women to have vaginal ultrasounds.
The true goals of the radical cracked teanuts and their bosses Groper Nutquist and slapped **** lyin Willardo, ther Mexican Mormon Moron tax evading draft doger.
Can you imagine what might have happened if the Pope's boy Rick the Dick Sanitarium became V.P. under lyin Willardo, the tax evader, of the right wing radical cracked teanuts, the gay, rapist, pedophile catholic priests and the braindead evangelical nuts that listen to them. Men will no longer have to purchase condoms, as they will no longer be allowed in this country. All mens sperm must be used to create babies. Cameras will be in every bedroom. Catholic priests don't have to worry however, because, according to the testimony of former raped little boys, they don't use them.
The Pope's first order to his boy would be to release all catholic rapist pediophile priests from prison as the Pope is running out of people to continue the process of shearing his sheep. He is running out of collection pot fillers. After all, he needs the money to fight off all of the lawsuits against the church worldwide.
His second order to RickyDickyDo would be to move the White House to Vatican City.
Even lyin Willardo's Mexican daddy knew what he would be like when he grew up So he gave him his first name "Willardo" after the large movie rat. He gave him his middle name after an old baseball glove that they found in the family outhouse that was full of shxt. They shortened lyin Willardo's first name to Willard and their last name from Robberos to Romney when they smuggled little lyin Willardo over here from his birthplace in Tijuana.
He is now known by most people as Mitt Robme.
It is amazing how these right wing nuts believe that lyin Willardo, in any way is going to do anything but destroy our country again. He is going to eliminate regulations so that his corporate criminal masters can rob and steal from us once again as they did under Bush Bin Lyin and his criminal gang led by President Cheney.
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