This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Hurricane Sandy Is Bullish for the Economy

NEW YORK ( TheStreet) -- The usual thinking is that human genes must have been loaded with an aversion to crisis. But what's often not discussed is that we actually get excited about crisis.

We didn't get to where we are today by sitting on the couch and gulping beer; we survived countless crises big and small, collectively and individually, over the evolutionary scale and in everyday life.

Look at the media coverage of hurricane Sandy. You could see the sparkles in the eyes of politicians and newscasters when they talked gravely about it, nonstop.

People are excited about this. Despite the tragic loss of life and property that will happen in some areas, let's face it: Deep in our hearts, we don't believe whatever damage we incur will really matter.





There will be insurance. There will be emergency crews. There will be neighbors and community help. There will be government subsidies. It is, viewed in a cold-hearted but accurate way, just a big, collective roller-coaster ride. People are genuinely scared. People are also genuinely excited, if only secretly.

The meaning of crisis has gone through tremendous inflation in the developed world. Whereas it used to mean life-or-death or at least grave hardship, nowadays in the developed world it means a manageable inconvenience for most people involved. This must be why disaster movies are popular in the developed world but not so popular in the developing world; out there it's too real for comfort.

In an economy not constrained by resources, such as that of the U.S., limited crisis means only two things at the statistical level: stimulus to individual and government spending; and stimulus to jobs.





Insurance companies will suffer in the short term, of course. But even they likely will benefit in the longer term as crises make people value the products they sell even more. Furthermore, since Sandy has been so hyped for so long, if it does not live up to the hype, even insurance companies will get a boost.

In other words, in the economic sense, destruction is constructive before reaching the resource-constraint boundary. It is no different from a boy's old, beat-up toy car finally getting totaled; as long as his parents can buy him a new one without meaningful impact to the family's lifestyle, it's a good thing, again not considering the emotional/sentimental aspect.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,461.32 -153.49 -0.92%
S&P 500 1,927.11 -14.17 -0.73%
NASDAQ 4,382.8470 -36.6310 -0.83%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs