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.
3 comments:
I hope Frankenstorm Sandy didn't ruin Halloween for NYC residents.
Isn't climate change already a big business opportunity? After all, its been sometime that weather derivatives / climate derivatives are already being traded in the Chicago Mercantile Exchange.
If current climate change related disaster trends continue, "Climate Change Catastrophe Claims Adjuster" could become the fastest growing jobs market in the 2020s.
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