Market reaction to Katrina.

[riskadverse]

Does anyone find the aftermath of Katrina and the behavior of the stock market to be at odds?  I can't help thinking this is not going to end well.     

 

[justin]

The market behavior doesn't seem that strange. Most of the losses are insured against, and through reinsurance, the risk is held at a national and international level.

With all the damage comes a surge in cleanup ($) and reconstruction ($$).

Or I'm wrong. Since I dollar cost average into the market and hold forever (until I retire), my understanding of the market doesn't really matter for my investment purposes.

 

[JPatrick]

Does anyone find the aftermath of Katrina and the behavior of the stock market to be at odds?  I can't help thinking this is not going to end well.     

I agree. Betting on lower markets ahead.  Sitting on cash and oil stocks waiting for the bell to ring.  They do ring a bell at the low don't they?

 

[greg]

I agree. Betting on lower markets ahead. Sitting on cash and oil stocks waiting for the bell to ring. They do ring a bell at the low don't they?

Yup, yup, yup. But you have to have your ear in Wall Street's butt to hear it.

--Greg

 

[brewer12345]

The market behavior doesn't seem that strange.  Most of the losses are insured against, and through reinsurance, the risk is held at a national and international level. 

With all the damage comes a surge in cleanup ($) and reconstruction ($$). 

I find the whole thing perplexing. The companes that will benefit from reconstroction (FRK, for one) are way up, as are any of the refiners and E&P guys who didn't get completely crushed in the gulf. However, $3.50 a gallon gas is a disaster for the "real" economy if it lasts more than a few weeks. I think we are in for a long, expensive winter, and if that is the case you can kiss the Xmas season goodbye for all but the highest end retailers.

 

[Brat]

Concurr.

MSNBC was commenting that construction related firms would be adversely impacted based housing prices.  I don't think so, it looks to me that there is a lot to be done as a result of the storm.  Material suppliers should be happy too.

 

[brewer12345]

In any case, the gas station frenzy I saw and the apparent widespread destruction of the refining and nat gas production capacity in the gulf does not make me want to be long anything economically sensitive, especially retailers that target the middle class or lower. Its got me rethinking my NLS position too. If I see another up day I may sell some covered calls on half my position.

 

[wildcat]

Seems as though many think this is aftermath will have a short life. Surprised to see the markets up. To me it will impact the econ a bit longer than expected. Ports shut down, gas up for a while, consumer nervousness, soft commodity crops will see some damage (i.e. MS cotton poof be gone) & increase prices, blah blah. I am signing off before I start too much like Greg

 

[laurence]

I find the whole thing perplexing. The companes that will benefit from reconstroction (FRK, for one) are way up, as are any of the refiners and E&P guys who didn't get completely crushed in the gulf. However, $3.50 a gallon gas is a disaster for the "real" economy if it lasts more than a few weeks. I think we are in for a long, expensive winter, and if that is the case you can kiss the Xmas season goodbye for all but the highest end retailers.

I didn't even think of that, cripes! X-mas is just around the corner, and many retailers get out of the red just from those six weeks of the year.

 

[Craig]

I agree ... I'm beginning to think that if we woke up tomorrow and heard LA was blown away by terrorists, the markets would be up 1% again.

Not only do we have the fuel / oil crunch ... the domestic auto OEM's were so desperate, they pulled ahead large amounts of business into July, Aug, Sept with their employee-discount programs ... hurt many retailers.

Some say all of this is already factored into market prices ... hard to believe.

But, this is another example of my complete inability to time markets.

 

[retire@40]

All I know about the market is that nobody is saying there is a bubble in equities, and most people are predicting sideways movement for a while. That's good enough for me to keep buying.

 

[Danny]

All I know about the market is that nobody is saying there is a bubble in equities, and most people are predicting sideways movement for a while. That's good enough for me to keep buying.

Retire - in 45 years of following the market, I've seen it take a dump whenever it wanted bubble or not, its unpredicability fascinates me...

 

[Martha]

Retire - in 45 years of following the market, I've seen it take a dump whenever it wanted bubble or not, its unpredicability fascinates me...

Yes! This is what bugs me about investing.

 

[brewer12345]

Yes!  This is what bugs me about investing. 

That's the tough part of being an investor in volatile assets: some days, it is your turn in the barrel.

 

[greg]

That's the tough part of being an investor in volatile assets: some days, it is your turn in the barrel.

I just read that evacuation from the Superdome has stopped because shots were fired at rescue helicopters. Hummm! Maybe JG should take some of that money he has made from credit card borrowing, send it to the NRA so that they can send guns to NO to pass out to citizens, then someone will shoot those dang shooters who have interupted rescue operations. Humm! Maybe not.

--Greg

 

[73ss454]

Yea, more guns!

What a great idea.

NOT

 

[REWahoo]

... Hummm! Maybe JG should take some of that money he has made from credit card borrowing, send it to the NRA so that they can send guns to NO to pass out to citizens, then someone will shoot those dang shooters who have interupted rescue operations....

Since we haven't heard from JG in almost a week, could be he's in NO making citizens arrests of looters & shooters. Can't you hear him saying "Go ahead...make my day"?

REW

 

[JPatrick]

I just read that evacuation from the Superdome has stopped because shots were fired at rescue helicopters.  Hummm!  Maybe JG should take some of that money he has made from credit card borrowing, send it to the NRA so that they can send guns to NO to pass out to citizens, then someone will shoot those dang shooters who have interupted rescue operations.  Humm!   Maybe not.

--Greg
[/quote

NOLA has a high crime rate, and really, high everything else bad rate.  No doubt they have 1000's and 1000's of people who are parole violators or have warrants on them for past deeds.  Then there's the 1000's who should be in that category, but have not been ID'ed yet.  With society functioning in a normal mode the opportunity to offend is perhaps at 20 on a scale of 1 to 100.  Take away the constraints and the opportunity pops to 80, 90, 100??
Given the same disaster circumstances, this sad situation could and probably would unfold in many of our major cities. Increased taxes for more prisons anyone??

 

[JPatrick]

I should add, that I do recognize the difference between looting for survival and criminal acts..Mommas are supposed to take care of their kids someway somehow.
If it takes looting to do that- - I say press on Momma

 

[maddythebeagle]

The mayor of NOLA is so mad about the looting and would rather see it stopped than to continue search and rescue? Who cares if people steal a tv, its not like they can plug it in and use it anywhere?

 

[greg]

Stock question: I'm thinking corn here. Lots of product coming down the Mississipi by barge and then shipped out of NO. Just spent some time looking for a barge company to short. No shipping facilities in NO, no product leaves, no barges get used up river. (Maybe I should be positive and buy a railroad stock.) Help. Anyone know of a barge/frieght company that might . . . help me pay for $4 gas?

--Greg

 

[brewer12345]

Stock question:  I'm thinking corn here.  Lots of product coming down the Mississipi  by barge and then shipped out of NO.  Just spent some time looking for a barge company to short.  No shipping facilities in NO, no product leaves, no barges get used up river.  (Maybe I should be positive and buy a railroad stock.)  Help.  Anyone know of a barge/frieght company that might . . . help me pay for $4 gas?

--Greg

If anything, shipping companies will do well. Chaos in the ports tends to increase congestion and therefore reduces shipping capacity. Less capacity with continued high demand means that charter rates go up. I would not be shorting shippers here.

Short anyone who depends heavily on low end consumers if you want to short.

 

[wildcat]

I don't think I would do many trades just based on Katrina. Forces you to chase hot money.