I hate to say it folks, but I think Katrina may bring a recession

[WCGreen]

to US before we know it...

There was a sense of panic tonight at the local COSTCO as the lines snaked out along the access road. People we're fidgety, worried....

The rumors were running all over that gas was going to jump as much as a dollar by weeks end....

This is going to really crimp on everything....

And then, the insurance companies will be teetering on the brink because of the disaster.....

Construction will continue but look for the costs to grow exponentially as new construction competes with repairs in the wake of Katrenia....

I don't know, it just seems to get worse and worse the more I think about it.....

I know this should be over in GD or somewhere else but I know more people here and feel more comfortable airing my despair....

[In_The_Wind]

1. Every bad hurricane brings shortages ...

this may be worse than most ...

[WCGreen]

24. I believe you are correct.....

Becuase there is so much building already going on........

the competition will just drive prices through the roof...

One of my clients waited until early this August to get his house fixed down on Sanabel Island.....

[brokensymmetry]

2. We were already headed for a recession...but the fuel...

not just gasoline, but natural gas...are going through the roof. Home heating is going to be a very big problem this winter. Food distribution may be problematic, and it will be expensive.

I think we're going to see a bumpy road. Maybe very bumpy.

[WCGreen]

4. Yep. And this isn't gonna help much.......

[justabob]

9. Maybe a dumb question

and slightly off topic (sorry)....Is the increased price of petroleum filtering down to stuff like plastic, and non-fuel products yet? There are hundreds of things not related to fuel made with petroleum products, but I haven't heard a peep about these kinds of things, and I wondered if anyone else had.

[Swede]

3. Kramer said buy buy buy insurance stock.

"Take advantage of those idiots who always sell insurance stock during hurricane season,cause the stock always bounces back." Insurance companies have actuaries that take hurricanes into account,so don't worry about them.

[WCGreen]

6. He usually is dead on....

Krammer is much better away from Krudlow

[Dave Reynolds]

5. I've been looking for numbers,

one unsourced post put 26 Gulf oil platforms presumed lost, with 24 listing.

I cannot substantiate, but if it turns out to be true we may well see $4 gas this fall. (Just my woithless opinion, though).

[justabob]

10. I heard that on the Weather Channel

this morning.... maybe late late last night

[CaliforniaPeggy]

7. Oh, how I hope you're wrong, my dear WC!

But I have the same feeling...

And you know it, the oil people are already pumping up (pun intended) gas prices...although I did hear on the news tonight that the price of a barrel of oil did drop after having gone up earlier in the day...

And our dipwad * said he might open up the oil reserves in order to ease the shortages that will be caused by the storm...

We must sit tight and do what we can...

:hi: :loveya:

[WCGreen]

8. The oil went up today becuase specualtors were looking

to make a quick buck....

That is why it slipped back to a more realistic price....

[CaliforniaPeggy]

12. Thanks for your input....

Always nice to hear what's really going on from one of our in-house experts...

:pals:

[Scout1071]

11. We've been in a recession for months.

I work in advertising and I can guarantee that ad sales are down across the board. I've been trying to tell my managers for months that we were in an "economic slowdown" nearly equivalent to spring and summer of 2001. Today Time Warner announced a hiring freeze. Others are not behind. Then the layoffs begin in time for Christmas.

Sorry to be a downer, but I'm telling you that major advertisers are clearly pulling back and they have been for months.

[WCGreen]

14. I saw that on CNBC a little while back...

All these little things, well cut backs in ads aren't little, but all of these things are starting to compound...

Katrena may be the tipping point...

[Scout1071]

16. They are all saying the same things to me -

Things are rough this year. Our budgets have changed. They are cutting back on some of the fluff that comes with a lot of advertising. And these are national advertisers with huge budgets.

[WCGreen]

20. I think they are also worried about where they should

put their money...

Traditional venues are losing their prominence and so the job becomes much more difficult....

[swag]

13. If the spendthrift US consumer gives up, global game over for now.

One very prominent (and traditionally bullish) economist recently pointed out to subscribers that the recent run-up in crude prices to $60/barrel effectively shaves off a full percentage point of annual US GDP growth. We all know that NYMEX crude bid well past $70/barrel yesterday.

The US consumer, who has been keeping that globalizing economy motoring right along with his/her oblivion to everything from his/her own savings/debt ratio to possible impacts of depressed home values, rising interest rates, domestic job erosion, environmental impacts, international crises, (to name only a few of the broader concerns) could very easily have his/her mental bubble popped by something as simple as the $3.00/gallon gasoline threshold.

And if the US consumer's mental bubble is popped, so much would skid right into the shitter.

And if you think international tensions ease at such a point in time, you're mistaken.

[swag]

15. Notes from the Cassandra of 21st Century economists, Steve Roach:

http://www.morganstanley.com/GEFdata/digests/20050829-mon.html

This is where today’s uniquely lopsided strain of globalization comes into play. In a US-centric global demand climate, the world has no effective backstop in the event of a pullback by the American consumer. There is, of course, a big debate on the US consumption prognosis in the face of an energy shock. Predictably, Dick Berner is not all that worried and, equally predictably, I am (see Dick’s 22 August dispatch, “Energy Risks and the Economy” and my 15 August dispatch, “Beneath the Surface”). But irrespective of who is right, record US current account and trade deficits leave little doubt that the American consumer is the principal engine on the demand side of the global economy. Given the sharp acceleration of global trade in recent years -- with our estimates putting total exports at a record 28% of world GDP in 2005 versus 19.7% in 1990 -- any sputtering of that engine would quickly leave externally-dependent economies elsewhere in the world in serious trouble. Again, that points the finger squarely at Asia -- the world’s most rapidly growing trade dynamo and, therefore, the region that has the most to lose in the event of an energy-related capitulation by the American consumer.

[WCGreen]

17. As always, Swag coes through.....

[swag]

21. . . .with my big mouth.

You started it. Your anecdotal evidence of the consumer's mind having snapped is scarier than even the gloomiest econo-reports I've seen lately.

I think you're right on the money, and it ain't gonna be any fun.

So thanks. Forewarned is forearmed.

[swag]

18. A good summation from WaPo, fully supporting WCGreen scenario

http://www.washingtonpost.com/wp-dyn/content/article/2005/08/29/AR2005082901428.html
. .
Economists, while emphasizing that few concrete damage assessments have yet been made, said the major hurricane that struck the country's key Louisiana energy gateway would help sustain high oil, gasoline and natural gas prices.

A seasonal downturn in demand expected after next weekend and a higher-than-usual build-up in inventories ahead of the North American winter had led to forecasts energy prices might ease in coming months.

Some economists said U.S. gross domestic growth had been already showing signs of easing and may now slow more rapidly if fallout from Katrina boosts oil to $100 a barrel for a month, or U.S. gasoline prices to $3.50 a gallon, for a few months.

"The impact on the consumer spending in such a scenario would be very dramatic, cutting the growth rate by as much as 3 percent and push real GDP growth in the fourth quarter closer to zero," Global Insight said in a preliminary analysis.

. . . more

[RPM]

19. Buy PPG

after looking at all those broken windows, i would imagine that PPG (pittsburgh plate glass) will make a killing in the second half

[miss_kitty]

22. My friend and i discussed how this will fuck things up economically

yesterday. Gas prices will go up, insurance will have to pay out and premiums for everything insured will go up. The taxpayers across the country will foot the bill to rebuild and repair a bunch of stuff, including the superdome, which for the most part is how federal taxes are supposed to work. Except not everyone who can afford to pay taxes are paying taxes, or enough taxes. A lot of fly by night rip off artists will steal from the people and the gov't. A lot of the usual suspects will charge the gov't (us) up the ass to repair stuff.

Shit for Brains said he was considering releasing some of the gas reserves. Just 'considering' it, pres Asshat?

And you know what, some group of rich fucking assholes started running ads tonight to get people to call our senator to get the ESTATE TAX dismissed. That only kicks in if you have over a million + when you die, death taxes. Those tight-fisted fuckers don't even want to give it up when they're dead...

[WCGreen]

23. Don't get me started on the Inheritance Tax...

It is nothing more than a tax free way for the rich to get richer and their offsprings accumulate untaxed wealth without lifting a finger to do anything...

Just think, those two chuckle-headed twins of satin spawn will never have to pay any tax on that stack of money W. stole from the taxpayers of Texas when he sold the Rangers.....

[Porcupine]

25. I think the word is Depression. We're in a recession

I am annoyed at the daily dose of happy economic news we all hear every morning. The absolute truth is that the only thing fueling the U.S. economy is continued extension of debt.

To be in a recession you have to be spending less of the money you have already. We're already spending 6 percent more than we have anually. Try that on Sim City and see how far you get before you crash. Costs are up to the average consumer and wages are flat or falling. The savings rate (exclusive of the tulip, er, housing bubble is zero)

The only place the U.S. has to go is depression.

[enigmatic]

26. We'll know in the coming days how bad this is

And despite the "Hey! It wasn't THAT bad" folks, it's going to be very bad.

Recession will be a given; depression is likely.

[CaliforniaPeggy]

27. Hi enigmatic....

Permit me to jump in here to wish you a very good night...I meant to speak to you in the Nighthawk thread...but got diverted....

I'm glad that we have so many intelligent folks here to explain what's happening in this global economy...otherwise I would be completely clueless...

Thank you for your input.... :hi:

[enigmatic]

28. Hey Peggy!

And if you don't call me "My Dear enigmatic" anymore I'm going to cry like a spoiled child;) :hug:

[CaliforniaPeggy]

29. MY DEAR ENIGMATIC!

ROFLMAO! Is that better, my dear? I hope so...You are such a special guy, and I feel so fortunate to know you...and to have you know me....

I am surrounded by terrific people, and you are one of them....

:loveya: :hug:

[enigmatic]

30. That's better!

:) Goodnight! :hug:

[CaliforniaPeggy]

31. Goodnight back atcha!

:hug:

[swag]

32. With today's view of energy infrastructure damage, it looks worse.

Your scenario of recession, at least, seems very likely. "Best Case" in article below implies energy prices that shave at least a point and a half of growth from GDP, all else equal. Amplify that by the gas-pump shock to the consumer.

All of this is miniscule in comparison to the human toll in terms of death, sorrow, and suffering that is being experienced right now, mind you, nevertheless

from the NYT (via Star Tribune):

http://www.startribune.com/stories/484/5587987.html

At the national level, the already stressed energy supply system is considered the most critical sector to watch. According to Behravesh, in a best-case scenario in which oil and natural gas supplies fall by 2 percent or less, oil prices are likely to stay at $65 to $70 a barrel for the next couple of weeks while gasoline prices climb to $3 a gallon for a couple of months.

Yet he noted that if the disruption is deeper, oil prices could spike to $100 a barrel and gas at the pump could soar to $3.50 a gallon.

[WCGreen]

33. That will definatly put a crimp.....

Although, this could be the impetus to really embrace the information Superhighway......

Think about it swag....

Might be time to invest in the tech sector again.....

[In_The_Wind]

34. GAS PUMP SHOCK ~ Stewarts $3.59 per gallon, Hess $2.95 ...

[WCGreen]

35. I went out monday night and got gas for $ 2.30 a gallon