Recession from Katrina?

[JAYCEE]

It could go either way.

Lots of credit card payments and mortgages will go unpaid. Airlines will be hurt by higher fuel prices and fewer tourist destinations. Auto makers have lost a large chunk of business.

Loss of energy resources and loss of the largest port (by tonnage) are the main problems. No fuel coming in--no merchandise going out and no cash coming in. This is potentially a serious problem for the economy as a whole.

Supply-side shocks do cause economic damage. They cannot be solved by fiscal or monetary policy (demand side).

The refugees also present a potential source of instability. If looting and violence follow them, there could be wide-spread economic implications.

This is a deadly serious situation.

 

[oilyriser]

The economy needs to be slowed down a bit, to allow energy supply to catch up, but politicians don't like to do that because it increases the unemployment rate, leading to political instability.

 

[LubeOiler]

political instability : Now you said it not me!

What is that anyway INFLATION.

 

[Al]

quote:

---

Originally posted by Amkeer:
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. 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.

---

I agree with a lot of your points. The big thing you mentioned is another disaster. Thats the key right there. Our government is flat out broke. We are leveraged to the hilt.

If folks dig waaay deep into their pockets to help the NO situation..that could slow the Government going broke paying for it all. And you just know there are major law suits coming against the State and Feds for this boondoggle (People suffering in the heat for days in NO ) They won't fly on the Federal level..but might in State and especially City gov. Congress will likely try to do some idiotic thing like for the 9/11 survivors=we are screwed.