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Scott Minerd
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As Chairman of Investments and Global Chief Investment Officer, Mr. Minerd guides Guggenheim’s investment strategies and leads its research on global macroeconomics. Prior to joining Guggenheim Partners, Mr. Minerd was a managing director for Morgan Stanley and Credit Suisse. He is involved in... More
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Guggenheim Partners
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  • Natural Disaster Economics 0 comments
    Nov 16, 2012 6:23 PM

    #Sandy is going to wreak havoc on certain economic indicators like retail sales but I still expect a strong 4th quarter

    - Scott Minerd (@ScottMinerd)

    For the first time in 124 years, U.S. exchanges were closed for two consecutive days due to severe weather. My thoughts are with all of the people who have lost or suffered due to the tragic events that have unfolded in the Northeast so far this week.

    This storm is going to wreak havoc on certain economic indicators like retail sales. One question is whether there will be an upward distortion in the data for October because of the sudden urgency to buy defensive materials, or if that will be offset by the lost week of shopping at the end of the month, which traditionally has been an important time of year for retailers. Regardless, there will be a great deal of uncertainty concerning monthly data until this is sorted out.

    Another consideration is that the costs for this event are being estimated at upwards of $20 billion. This is versus the $16 billion that Irene cost. As construction efforts get underway, however, the boost in employment and the resultant increase in disposable income could actually act as a stimulus in the coming months. Hurricane Katrina caused a quarter of subpar economic output, but two or three quarters after the event, the economy in the region picked up because of the spending on the recovery. With Sandy, it appears that there will be a downturn in economic activity for two or so weeks, meaning a rebound in spending could come online before the end of the fourth quarter.

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