The New York Daily News is calling New Orleans the lost city, swamped, being looted and now under martial law. The disaster is being compared to the 2005 Asian tsunami, Hiroshima, and Pompeii. In terms of property damage, this is surely reasonable, though the fact that there was significant advance warning and a concerted evacuation effort will hopefully mean that the loss of life will be nowhere close.
Eighty percent of New Orleans is under water along with both airports and the flood waters are expected to rise further through the broken levees. CNN just reported that the 12-15,000 people in the Superdome may be stuck there for up to a week without working plumbing or air conditioning.
Corporations are stepping in, with Geico suspending billing and advertising its contact information on the radio and the big three automakers are allowing customers to defer car payments for up to 90 days. Obviously, people without mail service are going to need to be proactive about making contact with the companies as phones become available.
... "Apart from refineries, some pipelines may also have been damaged," said Englund. "Companies can switch over production to other refineries but it's not a quick process. It's very likely that we could have a short-term gas crunch which will keep prices elevated."
Hidden benefits lurking?
J.P. Morgan senior economist Anthony Chan agrees that higher energy prices will curb both regional and national economic growth in the near-term.
"I think a 0.2 percent decline in economic growth due Katrina's impact on oil and the regional economy is a realistic assumption," Chan said. Longer-term, Chan believes hurricanes tend to stimulate overall growth.
Said Chan, "Preliminary estimates indicate 60 percent damage to downtown New Orleans. Plenty of cleanup work and rebuilding will follow in all the areas. That means over the next 12 months, there will be lots of job creation which is good for the economy."
Prof. Doug Woodward, with the Division of Research at the Moore School of Business at the University of South Carolina, has researched the economic impact of hurricanes.
"On a personal level, the loss of life is tragic. But looking at the economic impact, our research shows that hurricanes tend to become god-given work projects," Woodward said.
Disasters are good for the economy, he said. Within six months, he expects to see a construction boom and job creation offset the short-term negatives such as loss of business activity, loss of wealth in the form of housing, infrastructure, agriculture and tourism revenue in the Gulf Coast states.
In a note late Tuesday, Standard & Poor's estimates that Katrina could "shave a few points off our forecast of 3.7 percent growth." ...
Oil hit a new peak at over $70/barrel and who knows where it will stop:
... At least seven oil drilling rigs were adrift in the Gulf of Mexico yesterday and two companies said they couldn't find their rigs and platforms after Katrina plowed through the area.
... Katrina closed the Louisiana Offshore Oil Port, which usually handles about 1 million barrels of crude oil a day, or 11 percent of U.S. imports. It consists of mooring buoys, platforms and pipelines.
The port will not resume oil shipments until power is restored, scheduling manager Mark Bugg said. Entergy Corp., which provides power for the pipeline system connecting the port to refineries, said it will take weeks to rebuild its electricity network in Louisiana.
Shell, Europe's second-biggest oil company, said its Capline crude oil pipeline connected to Gulf of Mexico offshore production was shut because of power failures after the storm. ...
DKos: Pictures and more. ColdFusion04 talks about the ebb and flow of media coverage and the spreading PTSD. While the disaster was slowly sinking in yesterday, the president decided to play guitar, though he's now made the huge sacrifice of cutting his vacation short by two days to 'oversee' the cleanup, which I guess means that he'll be looking at it from a lofty perch and figuring out how to get on with his life.Posted by natasha at August 31, 2005 03:08 AM | US News | TrackBack(1) | Technorati links |