Anyone think a major economic recession may result from the fallout from Katrina? It will take some time to get refining back at full capacity and Winter is not far away. Soaring energy prices especially for home heating will take such a bite out of our wallets that consumer spending will take a nose dive.
Recession from Katrina?
- Thread starter haley10
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Maybe 800,000 jobs lost/moved. Some disruption of energy.
Naw - no recession nationally. But some large chunk of those folks will not move back - company and people wise.
Naw - no recession nationally. But some large chunk of those folks will not move back - company and people wise.
in Memphis, it was on the local news they estimate about 10,000 people from New orleans here. what about their kid's school? what about jobs? etc this is going to be a drain on local economy. the fear of gas shortage has rose gas here to 3.59/gallon. it was 2.49 before the disaster
The ripple effect is unfathomable at this this time.
In normal times the folks on the gulf coast would soon be building up stockpiles of home heating oil for Winter. There will be a disruption now, so I see natural gas and electric following the price up also.
The economy is very driven by consumer spending. With so many $$'s going for energy this Winter, people will get more conservative. It will have to hurt major retailers, upscale restaurants, etc., especially when increased transportation cost will have to be passed on to the consumer.
Maybe recession isn't the right word. Anyone remember when we had stagflation?
The economy is very driven by consumer spending. With so many $$'s going for energy this Winter, people will get more conservative. It will have to hurt major retailers, upscale restaurants, etc., especially when increased transportation cost will have to be passed on to the consumer.
Maybe recession isn't the right word. Anyone remember when we had stagflation?
Haley, I agree with a lot of that. The upscale restaurant part? Maybe not. Upscale retailers have not been hurt as much as Wal-Mart in the recent energy crunch.
Energy costs are inelastic for some.
Energy costs are inelastic for some.
Cultural difference Groucho. You have to remember I may be a redneck, so upscale is any restaurant that has plates and silverware.
Obviously won't be a problem for the champagne and caviar types and the truly upscale shops.
Wal-Mart may be an anomaly, since they have so many compulsive shoppers that are devoted to buying anything on sale and they may have to cut back. Downscale stores like Dollar General might actually pick up business.
Wal-Mart may be an anomaly, since they have so many compulsive shoppers that are devoted to buying anything on sale and they may have to cut back. Downscale stores like Dollar General might actually pick up business.
Haley, you're bad! LOL
The concern I have is how to relocate people for months and years before they can go back home. When you have no home for that long, you might as well move to another city or state.
Then comes the people bankrupting and defaulting on their loans, consuming housing in other area, unemployments, the money to clean up NO and rebuild the levees, increased home insurance nation wide, increased oil price everywhere, etc.
Once its chain reaction starts, everyone will be affected.
Then comes the people bankrupting and defaulting on their loans, consuming housing in other area, unemployments, the money to clean up NO and rebuild the levees, increased home insurance nation wide, increased oil price everywhere, etc.
Once its chain reaction starts, everyone will be affected.
In the Global economy there can't be a recession anymore.
There are pockets of strength here or there that keeps the $ pileing in the company coffers to avoid any real downside. The only reason we had a slight (.382%) pullback in 01 I think it was it was due a cycle. There was a bubble when things get crazy it pops. The housing market may be the next bubble, but even with terrorism the market is not effected. Another pocket of strength is Oil& Gas if a barrel of oil goes to $100 there is still a lotof upside to the oil stocks and drillers.
I agree Haley10, but I think we have stagflation now.
I have already seen articles predicting the upward pressure on construction material costs due to the re-building. This, along with the Fed raising interest rates, may break the housing bubble.
Knowledgeable economists have stated that the housing market is the main component to our current economic growth.
With both energy and housing taking a spike upwards, recession may be at hand.
I have already seen articles predicting the upward pressure on construction material costs due to the re-building. This, along with the Fed raising interest rates, may break the housing bubble.
Knowledgeable economists have stated that the housing market is the main component to our current economic growth.
With both energy and housing taking a spike upwards, recession may be at hand.
There will be a recession you can be guaranteed of this! You have a few things that are rearing their ugly heads. Real estate market has been hot and has been showing signs for a while now that its cooling down. You have a ton of speculators that will hurt the market when they realize that buyers are being vastly outnumbered by sellers. Competition as a seller is bad! The wealth and boom in this cycle has been driven off housing wealth or paper money. This money was used to do home improvements, vacations, autos, furniture, you name it. It was money to fuel a buying spree and stimulate the economy. Some forms of this money was used to speculate in real estate (leverage). Some people have maxed the value or equity of their homes to spend thinking values will continue to rise. This is false and very serious. When this "MAX CROWD" needs to sell they end up owing more than the value of the property and ultimately walk.
These things run in cycles and this will be a tough one.
These things run in cycles and this will be a tough one.
Yep, I sure do agree. Frankly, I wouldn't be surprised if we have some form of depression in this country- we have been skating on extremely thin ice for a long time now. I believe all it would take now is one or more additional medium-to-large scale disasters... Who's gonna pay the debt for all the folks who go bankrupt when they lose their income due to job loss, et cetera???????
Relax after Labor Day the price of gas will fall. There are now fewer houses to live in so the economy will be pumped up with the cleanup and rebuilding expenditures.
Prior to the hurricane, the economy has been booming. Latest August unemployment figures show many more jobs added and the unemployment rate down to a low 4.9%.
Where it goes from here? Probably not going to stop the economy from booming, but some segments may not do well. If the energy prices stay high, and already there are signs that they won't, consumers will cut back on Christmas spending and the retailers will not be happy. It's early September now and it's way too soon to consult the crystal ball.
Where it goes from here? Probably not going to stop the economy from booming, but some segments may not do well. If the energy prices stay high, and already there are signs that they won't, consumers will cut back on Christmas spending and the retailers will not be happy. It's early September now and it's way too soon to consult the crystal ball.
Actually I disagree with Amkeer on this one.
Guarantee is a strong word. Sure we will have cyclical recession in a few years. Caused by this huricane? Nope.
Guarantee is a strong word. Sure we will have cyclical recession in a few years. Caused by this huricane? Nope.
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