Will Sandy's damage move the GDP needle?

At a certain level, a storm can affect gross domestic product. This time, the impact may be less than feared.

By Jim Cramer Oct 30, 2012 9:23AM

TheStreet.com logo

Digital Vision Ltd., SuperStockA bit bigger than Irene but not a Hurricane Andrew and certainly not a Katrina?

 

The initial reports, which are probably in the ballpark, are saying Sandy may have done as much as $20 billion in damage. To put that into perspective, last year's Irene was about $15 billion, Andrew was $55 billion, and Katrina came in at $108 billion.

 

Why do these numbers matter? Because at a certain level, a storm can move the gross domestic product needle, as Andrew did back in 1992 as a massive federal effort rebuilt thousands of homes in rapid fashion.

 

The Katrina response, while large, did not produce much of a bump, in part because it wasn't a simple private insurance and federal check infusion. But it did come close to wiping out a lot of insurers that simply hadn't laid off enough risk. That does not look to be the case, judging by the action in the large European reinsurers, which are trading as if this event will lead to higher premiums and more profitability.

Last year's Irene did produce the private-insurance-fed-check boost, but it didn't do much for stocks, and the usual suspects -- the insurers to the downside and the housing plays to the upside -- didn't move much.


What people have to remember is that the without-power stories do not affect the economy, even as they affect people's lives. The major economic impact to flooding is mold, and unless the wet wallboard is pulled immediately, there are long-term effects that can render a house uninhabitable.

 

But again, that doesn't produce a boost that would make you want to buy shares in any of the usual home improvement names.

 

I think right now the judgment will be that more businesses was lost than will be found and the stocks of companies with numbers that will be cut will readjust to new levels quickly.

 

Jim Cramer's Face

 

Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust.

 

 

 

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242Comments
Oct 30, 2012 1:27PM
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Jeff R said:  The states are more efficient and faster acting then our overreaching federal gov't. Same goes for the dept of energy and education. 

Ask Chris Christy if the State of N.J. have the resources, manpower and money to handle the damage of Sandy.......without help from the Federal Government.........Chris Christy highly praised President Obama for his help and support  and immediate assistance..........Your comment shows your lack of knowledge on the subject......You believing States can handle ALL natural disasters without help from the Federal Government shows your Stupidity.....
Oct 30, 2012 1:20PM
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ELECTIONS DO MATTER

ask Mitt Romney,   Global warming doesn't exist......   This Extreme weather is ALL BECAUSE OF GLOBAL WARMING........Mitt Romney isn't worried about rising ocean levels.....“President Obama promised to begin to slow the rise of the oceans and heal the planet. [Pause. Laughter.] MY promise … is to help you and your family,” Romney said.. Remember​ Mitt made that statement at the RNC..............Mitt Romney, NO VISION FOR THE FUTURE,,,,,NONE.....​.  Another REASON Myth Robme is BAD for this Country.....and cannot be elected...
Oct 30, 2012 1:19PM
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you are a real humaniktarian Cramer - even politics takes the day off - of course - I see that the rest of your followers are just like you - blahhh
Oct 30, 2012 1:18PM
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Romney's lies:

1. Romneycampaianing in Iowaon Sunday: “[W]hen the president went around at the beginning of his term and apologized for America around the world, it made us just heartsick.”

 

He’s lying; the president never apologized for America. Romney knows this, but he keeps making the claim anyway.'

 

 

Jeff the pea brain wrote:

Do you have a BS in revisionist History?=======================
 
 
PUT UP OR SHUT THE F UP!!!!

 

Oct 30, 2012 1:08PM
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Romney lie:

 

After winning the New Hampshire primary, Romney said of the president, “He lost our AAA credit rating.”

In reality, it was congressional Republicans who were responsible for the downgrade.''''

Oct 30, 2012 1:07PM
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emptychair displays all the wisdom of an empty chair. He criticizes other people and he/she or it doesn't even know that "there" is positional, as in the table is over there. He/she or it is also one of the nastiest offspring of femal dogs I have seen in any public forum.
Oct 30, 2012 1:00PM
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ELECTIONS DO MATTER
The Romney/Ryan Budget decimates FEMA and disaster Funding for STATES.....MItt Romney just recently  said,  LETS THE STATES HANDLE THEIR OWN DISASTERS......They would like to get rid of FEMA.....Their words, not MINE.....Go to YouTube and watch if for yourself.......Ask the people of the NorthEast, Ask Governor Christy if he believes that....Hell no, they would not.......Miit Romney the guy that wants to ADD TWO TRILLION DOLLARS TO DEFENSE SPENDING, spending that WAS NOT ASKED for by the PENTAGON....but WILL CUT DISASTER RELIEF TO STATES.......Reme​mber​r the Tornado damage this year in the MId West, Joplin Mo, Eric Cantor and  the Republicans voted against giving relief .....Eric Cantor did this to his Own district and will probably cost him his Job when he comes up for re-election....I remember RED states that did not get the help they wanted this year because the GOP congress cut funding.....and blamed it on President Obama......They want it when it affects them though.......It happened here in Oklahoma.....I thought it was kind of funny...Our republican Governor begged the Federal Government for disaster Funds after flooding and tornado's in Oklahoma, the same women who TOUTS small government and slams President Obama every chance she gets.....President Obama came to Oklahoma and she didn't even show up to greet him.or come to his event.....Not long after that the State needed Federal disaster Funds for tornado's and flooding and were turned down, due to lack of funds....

This is what the Federal Government should do, and can do,  is to help communities when the State government cannot.afford to....or don't have the resources to help and rebuild........ Mitt Romney and the Republican party SAY, LET THE STATES TAKE CARE OF OF IT....YOU'RE ON YOUR OWN..........

What is ironic is the RED States are states that can Least Afford to pay for Natural Disasters......If the republicans have their way, YOU AND STATES WOULD BE ON YOUR OWN..... 
Doesn't the term UNITED STATES of America.......mean.U​NITED....... Even the NFL knows they have to take care of the weaker financial teams for the whole league to survive and prosper..
Oct 30, 2012 12:48PM
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Lie

 

Romney in a new campaign as airing in South Carolina: “The National Labor Relations Board, now stacked with union stooges selected by the president, says to a free enterprise like Boeing, ‘You can’t build a factory in South Carolina, because South Carolina is a right-to-work state.’ That is simply un-American. It’s political payback of the worst kind.”

Romney has said this before, and he’s been told every time,he's lying.

Oct 30, 2012 12:48PM
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Jeff Romney, About half of all start up companies fail, out of the 35 Green Energy Loans, only three have failed, but go ahead and waste your time beating that dead Horse.
Oct 30, 2012 12:47PM
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Lie

 

Romney in New Hampshire on Wednesday said President Obama seeks “a ‘European-style welfare state’ to redistribute wealth and create ‘equal outcomes’ regardless of individual effort and success.”

This isn’t just a lie, it’s also "Glen Beck-level insane"

Oct 30, 2012 12:46PM
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Romney talking about his job recordon Fox News on Tuesday: “[At Bain Capital], we helped create over 100,000 new jobs.”

 

 

Actually, no he didn't"""

Oct 30, 2012 12:45PM
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Lie

 

 Romney on Fox News on Tuesday: “I’ve still got the same positions on the issues I had four years ago. My record as governor and my positions are pretty darn conservative.”

 

That’s not even close to being true.'''

Oct 30, 2012 12:41PM
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from jeff: In one week, you have a choice.

Vote for the Mormon
or
Vote for the Moron

A vote for romney covers both categories ........
Oct 30, 2012 12:41PM
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No doubt there will be infusion in home rebuilding and repairing due to this storm.  Insurance companies will dish out hundreds of millions on claims and this will create jobs in the industry.  A natural disaster that destroys properties usually helps the economy.  Let's not give any politician any credit on job creations after this storm.
Oct 30, 2012 12:39PM
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It is amazing how many baggers hate govt for providing services but are willing to accept right wing idealogues providing hatred and absolute govt control whenever they get a chance.
Oct 30, 2012 12:39PM
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Obama spent the night searching Youtube for videos that caused the storm.
Oct 30, 2012 12:38PM
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You all are worthless idiots.

 

I wish Sandy had blow Cramer out to sea.

 

The end is near. All hail Prez Mitt!

 

Har har har!

Oct 30, 2012 12:38PM
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In one week, you have a choice.

Vote for the Mormon

or

Vote for the Moron

Oct 30, 2012 12:35PM
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Romney's lies:

1. Romneycampaianing in Iowaon Sunday: “[W]hen the president went around at the beginning of his term and apologized for America around the world, it made us just heartsick.”

 

He’s lying; the president never apologized for America. Romney knows this, but he keeps making the claim anyway.'

Oct 30, 2012 12:34PM
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THIS PRESIDENT IS A DISGRACE TO AMERICA LIEING ABOUT PEOPLE GETTING KILLED AND EVERYTHING ELSE. WHAT A DECIEVER TELLS U WHAT HE THINKS U WILL LIKE TO HEAR. COVER UP EVEN ON FAST-FURIOUS.
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