Wednesday, August 31, 2005

Economic Impact of Katrina

This article from AP and Yahoo is typical of what I have seen so far of the economic projections from Katrina...

Katrina Expected to Disrupt Economy
By Jeannine Aversa, AP Economics Writer
Surging Energy Prices, Business Disruptions From Hurricane Katrina Threaten to Slow Economy

WASHINGTON (AP) -- Surging energy prices and business disruptions from Hurricane Katrina, likely the costliest natural disaster in U.S. history, threaten to slow what has been a steadily expanding economy.

While the damage has yet to be fully assessed, economists and other experts believe the disaster will rack up insured losses of up to $25 billion. That would surpass the $21 billion (in inflation-adjusted losses) stemming from Hurricane Andrew in 1992, analysts said.

"This will be one of the -- if not the -- biggest single event in terms of insured losses in U.S. history," said Julie Rochman, spokeswoman at the American Insurance Association.
Read more of this article...

I think there is also another way to look at it. There will be billions of disaster relief money flooding into Louisiana, Alabama and Mississippi. Where will all of that money be spent?
Here are a few places that may have a good quarter or so...
Home Depot HD up only 1.5% this week.
Lowes LOW
Tractor Supply TSCO I see a big boost to revenue.

Also furniture: Haverty HVTA, Aaron Rents RNT, Basset Furniture BSET, Chromcraft Revington CRC, Dorrell Ind DIIB, Furniture Brands FBN...

Also names like Mohawk Industries, MHK for carpet and flooring. There must be other good carpet companies. What's the first thing you replace after a flood?

Premanufactured homes:
MODTECH HOLDINGS INC (MODT) This will be a fast mover.


For the next few quarters anyone who can fill the demand for temporary buildings in the washed-out areas will make money. Longer term, home builders will have plenty of work. Luckily, there are alot of carpenters along this area of the gulf coast. Anyone who wants to swing a hammer will be able to get a job here.

So, with $25 billion of insured losses there will be alot of purchases of replacement homes and stuff. While this may be a drag on the economy in some ways, it will be a boost in others.


At 9/02/2005 06:06:00 PM, Anonymous Cristobal said...

Quick question about Houston's response- nobody's questioning the generosity of Houston and God knows Jesus loves football just as much as the next guy but didn't they just build a gigantic new stadium next door to the Astrodome? But seriously I'm not trying to be a self rightious rabble rouser but I'm seeing all this stuff on TV about the Astrodome being full. Honestly I'm surprised I haven't seen anybody ask this before on TV but couldn't you put another 20,000 people in the new stadium? Just a question here, I realise the blogger is not the mayor (yet wink wink if I win the 131 million dollar lottery here in NY who knows wink wink....)

At 9/02/2005 06:55:00 PM, Blogger Prospector said...

The issue of the other stadium has been addressed. There is quite the drama going on to accomodate all these people. The city was lready pretty much full from pre-storm evacuees.
The Reliant Arena, the huge convention center part of
Reliant park, is being prepared for more people.
The new stadium though, they say, is too small. Although it has alot of seats the field is only slightly larger than a football field. It would only hold less than a thousand people.
They are also getting George R Brown convention center near downtown cleared for more people.

I was also curious about all of the towns between NO and Houston. I checked the local papers online. Beaumont, Orange, Lake Charles, La, Lafayette, La, etc all completely full. Civic centers full, churches full, school gyms.
There are people parked everywhere!

At 9/02/2005 11:14:00 PM, Anonymous Cristobal said...

Well that answers my question. I guess I just assumed a $700 million dollar stadium could hold as many people as the one it replaced.

I must say though that in all the coverage I've seen of this, I have only heard good things about the job Houston (and Texas for that matter) is doing. Seems like you all had a pretty decent disaster management plan. You don't just house 12,000 people in the dome on a whim. I wonder if this was organized on the county, state or federal level?

At 9/03/2005 07:50:00 AM, Blogger Prospector said...

The 'problem' with the Astrodome, when Houston built the new stadium was that it was built for baseball. The field was too big for football.
They were only using the flat part of the stadium, not the seats. Although now it is starting to fill up more.

I agree that they have done an amazing job on such short notice. It has been a combination of the mayor, the govenor and the county judge. It is my understanding that the govenor calls out the state national guard in emergencies like this. I have heard...
"govenor has declared a state of emergency so he can call up the national guard..."
Mayor said, "I talked to Govenor Perry and he has agreed to activate the national guard..."

So, if this is true of Texas than is this not also true for Louisiana?
I think the mayors and govenor of Louisiana may have contributed to this terrible crisis in New Orleans.

At 9/03/2005 11:07:00 AM, Anonymous Cristobal said...

The governor of Texas does have very nice hair which may have helped also.


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