Even though this unprecedented meteorological phenomenon managed to shut down the New York Stock Exchange for two days now, is Tropical Storm Sandy the “October Surprise” the financial world is still ill-prepared to face?
By: Ringo Bones
Who knew that it would too a tragic natural disaster – like Tropical Storm Sandy – to throw in an October Surprise that insurance companies, career politicians and the financial world is probably ill-prepared to face. With the austere fiscal environment of our post subprime mortgage crisis world still concerned about the economic slowdown and economic turmoil in the Eurozone countries, many economists are now wondering on what will be the lasting effect of a “Frankenstorm” like Tropical Storm Sandy. Will it be the NYSE shutdown, the “bipartisan” last minute 2012 Presidential Campaign suspensions, the financial and actuarial costs of those cancelled scheduled commercial flights in the US East Coast, or something far worse?
Sandy managed to close down the New York Stock Exchange for two days now given that the last time the NYSE was closed for this length of time was back in 1888. The NY electric grid shutdown – make that the US West Coast Electrical Grid shutdown – will probably be Tropical Storm Sandy’s lasting legacy in the financial world as the NYSE top brasses are contemplating on opening for Wednesday, October 31, 2012 for the all-important end-of-the-month dealings – weather permitting of course.
As company earnings had been delayed due to the NYSE shutdown by Tropical Storm Sandy, it would be the insurance providers that will be hardest hit – business wise. With payouts projected to reach well over 20 billion US dollars in flood and storm damage claims alone, the up to 4 feet of seawater flooding the NYC subway system will probably paralyze New York City’s ability to go back to its normal business activity for a few days more. Not to mention that fire in Queens, New York that destroyed at least 50 homes will probably make a “mere” Category I Hurricane like Tropical Storm Sandy do as much financial devastation as Hurricane Katrina did – and the scores of deaths which are one death too many in its wake.