PR Newswire: news distribution, targeting and monitoring
Oct 30 2012

STARKVILLE, Miss., Oct. 30, 2012 /PRNewswire-USNewswire/ -- In addition to the immediate physical impacts Hurricane Sandy promises the Northeast, economists say the storm also will bring intrinsic financial effects that are sure to unfold over the next few days and linger through the coming months.

Monday and Tuesday marked the first unscheduled closure of the stock market since the 2001 terrorist attacks on 9/11.

"It's very rare for the markets to close, even for a weather event," said Mike Highfield, associate professor of finance and head of Mississippi State University's Department of Finance and Economics. "The last time the markets closed for two consecutive days due to weather was in 1888."

Highfield said Monday that he expects the markets will reopen Wednesday, but noted those decisions are being made day by day.

"It's very costly any time the markets close because it removes liquidity for individuals who may want to exit a position," he said. "Many times we see a fall when the stock market does reopen, mainly because of the event itself which caused the closure."

He explained that because Sandy affected the metropolitan areas of Washington, D.C., Philadelphia and New York City, an immediate economic loss of an estimated $20 billion dollars could be felt because of property damage. He added that, overall, an estimated $60 billion economic loss could occur when considering lost work time, lost tax revenue on wages, a loss of spending effect and loss of commerce during business closures.

"When you consider how many people we are talking about in New York City alone, the impacts are huge. The economies of these heavily populated areas will essentially come to a grinding halt while we wait for the storm to pass," Highfield said. He added that while devastating storms come with an immediate negative shock, investors tend to rebuild vigorously with increased investing in a damaged area during recovery.

"After Sandy passes through, there will be opportunity for the construction industry and additional private spending. There will be initial devastation, but people will end up coming back, and reinvesting.

"In the short run, it can be very painful. In the long run, it may be somewhat of an economic shot, but it will take several, several months. In the meantime, there is a lot of agony and sadness from a human point of view."

Highfield noted that losses could be harder felt from Sandy simply because the storm is targeting an area that most often sees hurricanes as a television event as they hit the Gulf Coast. This time, a lack of storm experience may amplify the impact, he observed.

Associate professor of economics and director of Mississippi State's international business program Jon Rezek said he expects the storm will have a lower impact on the country's oil and gas prices than other hurricanes which have tracked through the Gulf Coast. Sandy's path has not impacted the nation's refineries along the Gulf, and so there has been no supply interruption, he said.

"For the most part, gasoline will flow from a lot of the refineries down here to the rest of the country, with fairly minimal impact in terms of a price increase," Rezek said.

He added the total number of refineries operating along the east coast is eight, compared to 54 in the Gulf region.

"In total, these facilities in the Northeast refine only about 6 percent of the country's crude oil," Rezek said. "Given the relative lack of refining capacity in the Northeast, a supply disruption there over the next few days will not likely cause near the disruption that Gulf storms have on national or regional gasoline prices."

For more information about Mississippi State University, see www.msstate.edu.

CONTACT: University Relations News Bureau, +1-662-325-3442, or Allison Matthews, amatthews@ur.msstate.edu

SOURCE Mississippi State University



RELATED LINKS
http://www.msstate.edu

Questions?

Can I help you? Drop me a line and let me know. 

Blogger Services

Customized Newsfeeds

Don't let the name PR Newswire for Journalists dissuade you. This is a great service for bloggers. Any content creator -- whether you're a journalist, freelancer or blogger -- can set up a customized profile to receive releases based on preferences. You also have access to hi-res photos, media-only content such as media advisories and embargoed releases, and experts via ProfNet.

ProfNet

Need expert sources? Check out ProfNet, a service that helps journalists, bloggers, authors, and other content creators connect with experts -- at no charge. Sending a query is easy: Just fill out a form detailing the kind of expertise you need, how you want to be contacted, and your deadline. ProfNet will do the rest. You also can sign up for a weekly "tip sheet" of experts and story ideas. Visit ProfNet for more info or go directly to the query form.

ProfNet Connect

ProfNet Connect is a free, interactive online community where PR professionals, experts, and media professionals can network and engage with one another. Via profiles, forums and blogs, subject-matter experts can position themselves as the go-to source for content creators and journalists. In turn, content creators can search the site by keyword to find the experts they need. The site also features enhanced profile capabilities, allowing users to easily add multimedia components -- photos, videos, white papers and more -- to their profiles.

News Widget

Our widget allows you to display PR Newswire content on your site with very little back-end programming required.  You not only get the headline, but also the body of text of the news release, keeping the user on your site at all times.  In order to do so, the difference between our Widget and other widgets is at the end of the sign-up process, you will be provided with two pieces of source code -- one for the page where the Widget itself will be displayed and one for the pages that will display the body of text of each news release.  In addition, the sign-up process allows you to have 100 percent control over every aspect of the Widget's appearance, so that the Widget can blend in fully with the look and feel of your site. Still not convinced? Here's what one blogger had to say about the widget.

Search
  
  1. Home
  2. News Unfiltered
  3. Blog Posts
  4. Blogger Services
  5. Blogger Events
  6. Contact Us