NationStates Jolt Archive

The estimated economic impact of Katrina was this morning doubled from $26 billion to $50 billion in damage. This would make Katrina costlier than any previous natural disaster and more costly than the destruction of the Trade Towers in 2001.

Things in the U.S. are going pretty well overall these days; unemployment is low, inflation is low, home ownership is up, the Real Gross Domestic Product is expanding, and household incomes are up. Will Katrina slow things down? Will it be serious? How will it affect unemployment? Salaries? Is this a speed bump, or something more serious?

What are your thoughts/predictions?

The estimated economic impact of Katrina was this morning doubled from $26 billion to $50 billion in damage. This would make Katrina costlier than any previous natural disaster and more costly than the destruction of the Trade Towers in 2001.

Things in the U.S. are going pretty well overall these days; unemployment is low, inflation is low, home ownership is up, the Real Gross Domestic Product is expanding, and household incomes are up. Will Katrina slow things down? Will it be serious? How will it affect unemployment? Salaries? Is this a speed bump, or something more serious?

What are your thoughts/predictions?
It's going to sting. It will also pop the housing bubble in parts of the nation (pop being a relative term), and cost quite a bit as far as insurance goes.

It's going to be very volatile. There will be a lot of jobs created in the next few months for cleanup, repair, rebuilding, and the reestablishment of commerce in the destroyed regions. There may be some swings downward in unemployment and a spike in hiring like we saw after Ivan, followed by a return to the normal 190,000-200,000 job growth after these temporary positions are eliminated.

At the same time, oil prices will spike and then recover as everything comes back on line, which will temporarily slow GDP growth and manufacturing.

The Federal Reserve will stop tightening until the effects of the hurricane dissipate, and things will hopefully return to relative normality within the next few months.

It will be a short term slowdown with no chance of recession, and as long as the Fed doesn't become too aggressive it will work itself out. Oil prices are already being tamed by the tapping of the SPR, and hopefully this will put the importance of new oil refineries and infrastructure in the spotlight. We've got the crude, but can't refine it.

It's going to sting. It will also pop the housing bubble in parts of the nation (pop being a relative term), and cost quite a bit as far as insurance goes.

We're rather lucky in that the bubble's been deflated in enough regions to avoid and kind of 2000-style crash. A few regions will be hurt, but nowhere near as much as they were if it had happend in May or June.

Insurance will hurt but don't forget construction and equipment/supply industries will boom. This devastation creates a mandantory construction boom, and that insurance money will go back in to the economy via expenditures.

I'd bet we'll see a short term spike in inflation because of the increased costs of shipping goods across the country. Food will go up, and gas is already going up quickly. A lot of it will depend on how soon the refineries and the oil pumping facilities in south Louisiana can come back online--the longer it takes, the more severe the inflation, I imagine.

We're rather lucky in that the bubble's been deflated in enough regions to avoid and kind of 2000-style crash. A few regions will be hurt, but nowhere near as much as they were if it had happened in May or June.

Insurance will hurt but don't forget construction and equipment/supply industries will boom. This devastation creates a mandatory construction boom, and that insurance money will go back in to the economy via expenditures.
Housing bubbles don't crash, it's sorta like the rocket up feather down gas prices. Mostly, they don't go down at all, they just stay constant until inflation erode away at the value enough. However, staying the same is bad enough because the main engine of the economy would be shot dead, as consumer spending is mostly financed by debt, and there is only so much you can mortgage if the housing prices don't continue to rise.

Construction will go up, but most of that will end up coming from the federal government (in the end, it always seems to during massive disasters), which comes from the tax payer or debt. I don't think that there will be enough temporary jobs created to decrease unemployment, I'd be expecting a small spike in unemployment because of the severity of the storm and the size of it (a good million out of work can't just be waved away by temporary jobs).

In the short term, there will be a small global meltdown. Inflation will be higher than usual as shippers use more expensive ways to get us imports, and the price of oil will exascerbate everything. There will be a panic in the short term, as there is now. Gas prices in Atlanta are touching $5.
Deflation will result everywhere else, or at least disinflation. Less can be exported to the US, and prices will be cheaper as there is more oil available in the Eurasian market. We will thus see a volatile price of oil, even if gas prices rise.
In the long term, this will make the economy boom. Many jobs will be created as insurance money finances a helluvalota construction. I expect it to actually grow the housing bubble. And this may encourage a new spat of refinery construction, as oil firms may shy away from the Gulf Coast. Perhaps this may end up spurring activity in the St. Lawrence Seaway. It is just as able to bring goods into the country, and the weather isn't destructive.

In the short term, there will be a small global meltdown. Inflation will be higher than usual as shippers use more expensive ways to get us imports, and the price of oil will exascerbate everything. There will be a panic in the short term, as there is now. Gas prices in Atlanta are touching $5.
Deflation will result everywhere else, or at least disinflation. Less can be exported to the US, and prices will be cheaper as there is more oil available in the Eurasian market. We will thus see a volatile price of oil, even if gas prices rise.
In the long term, this will make the economy boom. Many jobs will be created as insurance money finances a helluvalota construction. I expect it to actually grow the housing bubble. And this may encourage a new spat of refinery construction, as oil firms may shy away from the Gulf Coast. Perhaps this may end up spurring activity in the St. Lawrence Seaway. It is just as able to bring goods into the country, and the weather isn't destructive.
How often do you hear the term "panic buying" being used to describe the floor of the stock exchanges :rolleyes:

How often do you hear the term "panic buying" being used to describe the floor of the stock exchanges :rolleyes:
Not necessarily on stock exchanges. I mean with gas, food, clothes, and anything else where prices may rise. I would like the Fed to put a temporary moratorium on circulating new dollars, or if that is too extreme, slow down the pace of circulation.

Not necessarily on stock exchanges. I mean with gas, food, clothes, and anything else where prices may rise. I would like the Fed to put a temporary moratorium on circulating new dollars, or if that is too extreme, slow down the pace of circulation.
No, but they should be the ones that know better then to be panic buying.

No, but they should be the ones that know better then to be panic buying.
They could always be swept up in it. Average consumers certainly will. I know that I have actually advocated for it, by telling everyone to fill up their cars now.

No, but they should be the ones that know better then to be panic buying.
Well, there comes a point, say, with gasoline right now as an example, where it makes sense to fill up long before you would normally, because you know the price is going to jump, and not 2 or 3 cents a gallon, but 30 to 50. For a lot of vehicles, that's a significant price difference hitting you all at once. For instance, I filled up today even though I only needed about half a tank because I found a station that hadn't gotten its new shipment and so was still at $2.73 a gallon. I'd already passed half a dozen stations that were over $3.00. If I'd waited till I really needed to fill up, I'd be spending at least five bucks more (because I have a small car with a small tank), assuming that gas hits what I expect it will next week, $3.50 a gallon. If you drive a monster, then it really pays off to panic buy, even to buy and store.

Man, this is going to RUIN the international economy, for the short term. Funny, the destruction of one singular american city will cause the increaced hardship for Thousands of people in the rest of the world.

If the gas shortage lasts long enough, though, it will be a net boon to the US economy, because it will reinvigorate US manufacturing. Cheap gas is part of the reason it's cheaper to get goods from China, etc than to make them here.

Gas prices are not even near the peak they will reach before the end of the year. With oil Refining already stretced to the breaking point before we lost ten refineries in lousiana and mississipi alone, thats a signifigant portion of AMericas oil refining capacity, and without refineries, all the crude oil in the world won't do us any good.

Shipping will also be affected, 60% of americas refined oil imports came through New Orleans and Baton Rouge, and who knows how much other shipping went through tose two ports.

I don't think we've seen the end of the economic damage, and I wouldn't doubt that oil hits 80$ a barrel before they start going solidly back down.

Well, I heard some good news on the economic front. There are currently two piipielines that went from New Orleans to the East Coast. They lack power to pump gasoline through, but they will be back running by this weekend. However, I don't know what good it will do.