Ignore the Pundits -- Katrina Will Hurt
Editor's Note: This is a bonus column from Barry Ritholtz, whose commentary usually appears only on RealMoney
. It was published at 10:41 a.m. EDT. We're offering it today to TheStreet.com
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Forget most of what you may have heard or read in the financial press about the post-Katrina recovery. This is an unprecedented U.S. disaster that will be felt most acutely by the domestic U.S. economy, but it will have far-reaching global repercussions also.
Katrina's Timing Mixed BlessingThe Gulf catastrophe came at a time when the consumer was already starting to look haggard: Pressured by high energy prices, squeezed by inflation and no gains in real wages for five years, and increasingly less able to convert home equity into spending cash, the consumer was beginning to look shopped out. (For an extensive look at the state of the consumer, see last week's discussion between Andrew Samwick, the former Chief Economist of the President's Council of Economic Advisors and myself).
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