Katrina & the DOW

[Books Worst Enemy]

Is anyone else perplexed by the way the market is completely ignoring Katrina?

I mean, we just lost an NFL/NBA town. I can already hear the CEO's on their quartely conference calls blaming the next four quarters on Katrina. There is no way eliminating 1/2 million jobs and forcing a 1/2 million people out of their homes and losing all those assets will not hurt corporate america.

Yet the market hasn't even noticed. In my opinion this is far worse than 9/11 long term. The market completely tanked after 9/11 and for the next year and half CEO's were using 9/11 as their excuse for a bad quarter. This will make 9/11 look like chopped liver from a corporate view point.

How much will this cost Bell South? Harrahs? Time Warner? Countless small business were forced into chapter 11 over night. Can creditors expect to be repaid on all the loans that were oustanding in New Orleans or will they be greeted with BK paperwork? How much will Berkshire and the other insurance players pay out on this deal?

This is a much bigger deal, financially, than 9/11 ever thought about being and the market is UP since last Friday's close.

The more I think I know about the stock market, the more I find out I really am clueless. This will cost corporate america HUNDREDS of BILLIONS!

Later,
Books Worst Enemy

 

[trytrytry]

i took my 401k out of the markets on Tuesday I expect some serious down turn over the course of the next couple months. its more of an economic slow drain not the sudden shock of 911.

 

[Jimmy Hoffa]

There's and old stock market saying that goes, "Bad news on main street means good news on Wall Street".

Expect higher profits for Lowe's, Home Depot, lumber producers, etc...

Major companies doing business in the south will have business interruption insurance. Insurance companies take a hit but get it back with higher premiums for the rest of us.

There will be alot of jobs and income created by the rebuilding efforts also.

 

[Hitman26]

BWE:



Good post. I believe that the market is getting ready to shave off about 10-15% over the next year (S&P 500, not the Dow). Gas prices and Katrina are gonna be the main factors. Volatilty is hovering around all time low right now and that is why the market is shaking off all of this bad news. When earnings start rolling in and the blue chippers start downward guiding for the next year then the market will start to hurt. Volume is light right now and light volume makes for yawner sessions. Right now is a good oppourtunity to either get out or better yet to go short and make some profits.