As many as 2 million customers are without power as Sandy slammed into New Jersey and New York.
The markets will be closed again on Tuesday but may resume on Wednesday, the final trading day of the month. New York’s mass transit system remains shut and it is unclear when service will be restored.
Here is an Image of Hurricane Sandy from Space from a New York Post Tweet.
Large Nor’Easter on Steroids
Accuweather (Premium) says Northeast Catastrophe Unfolding.
An extremely rare and dangerous storm, “Sandy,” has roared in from the Atlantic Monday evening. Inundations have already occurred and will get worse through the first part of Monday night.
According to Expert Senior Meteorologist Steve Wistar, “Sandy is unfolding as the Northeast’s Katrina in terms of impact.”
There is the potential from the central New Jersey coast to New York City and western Long Island have some of their worst coastal flooding on record with Sandy tracking into New Jersey.
High Winds, Power Outages and Downed Trees
Sandy will not be your typical hurricane as it moves in from the southeast. Hurricanes are small and compact. Damaging wind gusts will reach from Boston to Washington, D.C., and inland to the central Appalachians.
Sandy will be more like a large nor’easter on steroids. It could have the impact of a Category 2 hurricane in some locations.
85% of Atlantic City Flooded
The Wall Street Journal reports Flooded Atlantic City Feels the Early Brunt.
“This is the worst-case scenario for us,” said Tom Foley, Atlantic City’s director of emergency management. “In 28 years, I’ve never seen weather this bad.”
Officials called for a mandatory evacuation of the entire county, closed the casinos, closed county and municipal roadways, installed a curfew of 6 p.m. to 6 a.m. and summoned the National Guard to assist with a rescue effort in Atlantic City that grew increasingly urgent as the storm bore down.
Agence France-Presse/Getty Images
About 3,000 of the city’s 40,000 residents people stayed, Mr. Foley said. One woman had a fatal heart attack as she tried to evacuate, Gov. Chris Christie said. Her name wasn’t immediately released.
New York Subway in Jeopardy
Please consider Salt Water Puts Subway ‘In Jeopardy’
Before Hurricane Sandy was expected to make landfall Monday, the Metropolitan Transportation Authority worked to seal off openings that could allow corrosive salt water to sweep into the system and incapacitate trains into the coming weekend. Still, the threat of an extended shutdown loomed over a system that carries 5.2 million passengers a day and is essential to the city’s economy.
The subway system is “in jeopardy,” MTA Chairman Joseph Lhota said Monday. “Our subway system and salt water do not mix.”
The MTA closed down its entire regional network of rails and buses on Sunday evening and expect it will remain dark at least until Wednesday morning. Agency officials couldn’t say how quickly the subway could be brought back into operation if the storm left the system awash in water from what were predicted to be surges as high as 11 feet. They said a timetable would depend on the amount of water that actually reached the 14 subway tunnels under the Harlem and East rivers, where the system is most exposed to catastrophic flooding.
Klaus Jacob, a research scientist at Columbia University’s Lamont-Doherty Earth Observatory, wrote in a report last year that it could take as long as 29 days to pump out a full inundation of the tunnels.
“You can’t order a part from Westinghouse or General Electric GE that is 100 years old,” Mr. Jacob said. MTA workers will have to clean and test flooded equipment, “then you cross your fingers and hope that it works,” he said.
Broken Window Fallacy Yet Again
With every catastrophe comes some economic illiterate talking about the stimulus benefits of it all. Presumably they have not read about the Broken Window Fallacy.
For a discussion of the broken window theory, please see Government Bailouts and the Stock Market – The Seen and the Unseen.
With the broken window in mind, please consider some complete economic nonsense in the Reuters article Economy may skirt direct hit from Hurricane Sandy.
Economists say some of the impact caused by businesses closing will be offset by reconstruction efforts, and point to catastrophic storms like Katrina, which devastated New Orleans but did not deal lasting damage to the national economy.
Peter Morici at the University of Maryland estimates that Sandy will cause about $35 billion to $45 billion in losses and damages but then be followed by as much as $36 billion in recovery spending.
Evan Gold, a senior vice-president at Planalytics, a Philadelphia consulting firm that advises businesses on weather-related matters, was more realistic as was Mark Zandi at Moody’s.
Zanzi estimates regional GDP is $2.5 trillion and the cost to the region is about $10 billion a day if the region’s economy grinds to a halt.
Evan Gold states “If consumers in this part of the country are spending hundreds, if not thousands, of dollars to buy things like generators, or after the storm, to do clean-up, that is likely going to cut into budgets that people might have for their holiday shopping“.
Broken windows and floods have a net economic cost, not a benefit.
In general, it is never of economic benefit to have productive assets destroyed. It is also never of economic benefit to waste money on stimulus programs that have no realistic payback.
Keynesian clowns still have not figured this out.
Mike “Mish” Shedlock