Nov

1

 I see an estimate of 50 billion to repair the NY subway system. "Many of the suppliers of equipment have been out of business for 50 years". All equipment damaged by salt water basically must be replaced. The loss of wealth from the flooding and the 3 million homes without power must represent enormous opportunity cost to the economy. At least 50 billion above and beyond the subway. The total goods that an economy produces represents the amount available to be divided up and would seem to be a good measure to total utility. These total goods are 100 billion less than they would have been. They say that one of the causes of the 1907 October crash was the San Francisco earthquake of April 1906. Big destructions in other floods and tsunamis would seem to have lagged negative impacts also. Total reductions in wealth like this have to be big negatives for the long term despite the tendency of calamitous events to have a negative impact the first day and bounce back by end of week.

Ken Drees writes: 

I like the reference to San Fran in scope and lag. Let's say it costs 200 billion to repair–it will be the only QE that cannot be afforded. A sad reality. 


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  1. astro the family dog on November 2, 2012 12:56 pm

    Lunch money in today standards.

    parts and such…will be ‘made in china’

    Have a nice NYC weekend..you guys need it.

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