The Chicago Mercantile Exchange (CME) has teamed up with the reinsurance company Carvill to create a new Hurricane Index (and related futures and options contracts) that should help insurers lay off risk.
The index is designed to improve on the popular Saffir-Simpson scale, which ranks hurricanes on a scale of 1-5. The inadequacy of that measure was revealed by Hurricane Katrina, which merited only a “3” rating, but caused untold destruction.
What ideas do you folks have about what kind of equities that this new "index" may contain?
Bus manufacturers? Mobile homes? Home builders? Any kind of construction? Water sellers? VISA card (for giving out a quick $200/head?)
Part-Owner of Texas
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