WASHINGTON, August 25, 2017 – Drudge, CNBC and pretty much everyone else is hyping the allegedly pending weekend disaster confronting the Lone Star State, aka Hurricane Harvey.
Barreling toward the Texas coast – actually, meandering toward the Texas coast – Harvey is currently labeled as a Category 1 storm. According to the networks and assorted weather flacks, Harvey is almost certain to grow to a Category 2 before it makes landfall early in the a.m. on Saturday. All the weather mavens and fake news types are hyping impending disaster, convinced that Harvey will notch up to Category 3 before it strikes, completely obliterating coastal Texas, probably forever. This sort of possibility really excites them.
Here’s CNBC’s Friday opening take on this impending surefire disaster, which is apparently a lead pipe cinch to top Sandy and Katrina in death, destruction and mayhem:
“Hurricane Harvey could barrel into the U.S. as a Category 3 hurricane, an event which has historically tended to send utilities and insurance stocks lower.
“Harvey is quickly turning into the worst hurricane to hit the U.S. mainland in more than a decade, and is expected to strengthen from a Category 2 to a Category 3 hurricane when it hits the Texas coast in the next 24 hours. The National Hurricane Center expects Harvey to linger over the state for days. Both Houston and the Texas coastline could experience heavy flooding, authorities in the energy-producing state warned.”
Obviously, real reason for the hype here is twofold:
The weather people love to cheer on disaster, hoping for Emmys and Pulitzers for their overhyped disaster coverage; plus, the extra-added bonus of being able to credit the thoroughly discredited global warming climate change meme for the severity of the storm.
The MSM is setting up Donald Trump again. Fresh from his alleged Charlottesville “mis-performance” – he was only guilty of telling the truth – the media is preparing to tag him for “mismanaging” the Federal government response to the impending coastal Texas disaster, a mismanagement charge that will equal if not exceed the fake post-Katrina failure that was pinned on then-President Bush. Wait and see.
This absolutely for-sure impending Hurricane Harvey disaster – an apocalyptic event that will, with absolute certainty, rival Noah’s Flood – will dominate news coverage at least until the storm surge subsides and the damage can be accurately assessed. While a real disaster may yet come to pass, such pre-storm assessments are always 50-50 at best. But with the news and weather hype reaching a fever pitch, some stock groups will be affected one way or the other.
CNBC, of course, chooses to accentuate the negative, as the media always does. And sure enough, in the passages just cited, they correctly predict a negative influence on utility and insurance stocks should Harvey live up to his hype. That stands to reason, since affected utilities in the storm’s likely path will likely have a heckuva cleanup job in the days and weeks ahead.
Ditto the property insurers, who will with certainty have a load of big, fat claims to dole out as slowly as possible.
But what about the business positives? (Yes, there are some. It’s always darkest before the dawn.) No doubt Home Depot and Lowes (symbols: HD and LOW) will be selling out of copious piles of plywood for starters. And, if your Texas home isn’t too badly damaged, there’ll be plenty of follow-on business for these hardware chains next week when hundreds, perhaps thousands of DIY repairs get underway.
Grocery stores – even ones not owned by Amazon (AMZN) – will be selling out of bottled water and everything else. Filling stations will be marking up the price of gas legitimately or illegitimately, boosting profits. Hotels and motels will be booked solid as coastal Texans “go West” to escape the direct hit. And the list goes on.
As for lasting influence over the market – unless Harvey meets or beats the media hype, turning into a tragic disaster of epic proportions – things should settle down in the stock market by roughly the middle of next week when the damage and the repair bills are roughly finalized. And markets will get back to normal, though nobody knows what “normal” really is during this weird trading month of August. Things might not normalize until well after Labor Day.
Given all the surging Harvey hype this week, the non-news emanating from the big Federal Reserve financial confab at Jackson Hole, Wyoming has mostly been drowned out. Neither the EU’s money men nor the Fed itself seem to be spinning things very hard one way or another on Friday afternoon.
Economics aren’t behaving for the Fed as algorithmically predicted, casting considerable doubt as to the wisdom of these sainted monetary wizards. Inflation (except for food prices) in the U.S. is still essentially non-existent, counter to plan; and lending institutions are still tight-assed when it comes to lending money to the Deplorables, a situation that remains almost precisely the same as it was during the peak years of the Great Recession (2007-2010 by our lights).
Ten years after the economic dominoes started falling, wealthy banks, individuals and companies, who pretty much got all the free money the Fed has printed for a decade, are doing better than ever.
Meanwhile, what’s left of America’s middle class, plus the rest of this country’s Deplorables continue to enjoy the same flat salaries and declining benefits packages they’ve been enjoying for over two decades. Wonder where consumption, rapid growth and inflation have gone? Wonder no more. The world’s central bankers, however, seem to remain puzzled. So much for the value of all those Ivy League degrees.
At any rate, as in the good old days of the original Mickey Mouse Club, this Friday (and maybe next Monday) is “Anything Can Happen Day” on Wall Street. Place your bets, your stock market buys and sells and related puts and calls, on how much of Texas Hurricane Harvey will deign to leave in its wake. Then be prepared to rejoice and cash out, or be left in the gutter with your fellow losers, doomed to a collective weeping and gnashing of teeth.
It’s all nonsense, actually. But it’s the kind of “investment” climate we’re dealing with this summer.
Meanwhile, we’ll plan to post another column next Monday. Unless that storm surge somehow swells the Potomac to record levels, wiping out Washington, D.C. and its wealthy suburbs. Which, if you’re a real Deplorable in Flyover Country, might actually be a cause for great rejoicing.