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MSU economists lay out good news and bad news related to Sandy’s financial impact

October 30th, 2012 No comments

The economic damage from Sandy, which meteorologists and scientists dubbed “Frankenstorm” before and during her strike on the Northeastern U.S. Monday, will likely take months to calculate.

Mississippi State University economists said Tuesday that, like the storm surge in Manhattan and along the Jersey Shore, Sandy’s financial impact could be historic. Part of that will be the losses incurred by the New York Stock Exchange’s closure Monday and Tuesday.

“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 markets closed due to weather was 1888. Officials announced Tuesday morning that they would reopen Wednesday.

Based on history, Highfield said the reopening could produce less-than-desirable results. “Many times we see a fall when the stock market does reopen, mainly because of the event itself which caused the closure.”

Because Sandy made landfall among the heavily populated Eastern Seaboard – New York City got a direct hit, and Washington, D.C., and Philadelphia were heavily impacted – Highfield said an economic loss of $20 billion just in property dame is possible. Factor in loss of tax revenue from wages, lost work time, and a general loss of commerce, and that figure could rise to $60 billion, he said.

That could make for a short-term economic slide, but it could also present investors with opportunities in the industries that support rebuilding. That was the case along the Gulf Coast after Hurricane Katrina, spurred mainly by Gulf Opportunity Zone Bonds.

Sandy’s death toll as of Tuesday morning had climbed over 30. “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 said in a school press release.

If the storm’s track made it potentially more expensive, it could also lead to good news within the oil and gas industry. Gas prices soared in the immediate aftermath of Katrina. That probably won’t be the case with Sandy, said Jon Rezek, associate professor of economics and director of Mississippi State’s international business program. Sandy did nothing to cause supply interruption at any of the Gulf Coast’s 54 refineries. The Northeast is home to only six such facilities.

“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. “In total, these facilities in the Northeast refine only about 6 percent of the country’s crude oil. 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.”

Tuesday, the price for a barrel of benchmark crude oil rose 55 cents to $86.09. The average price for a gallon of gas fell one cent, to $3.53, more than 11 cents cheaper than two weeks ago.

 

Gene Taylor is not in this to make friends

September 17th, 2010 5 comments

Gene Taylor has had an eventful week.

Last weekend, the Democrat who has represented the 4th District for two decades was quoted in the Sun Herald in Biloxi railing against the insurance industry’s recruitment of the U.S. Chamber of Commerce to oppose his multi-peril insurance legislation, an issue he has been pushing since shortly after Hurricane Katrina. His efforts to push the bill, which would allow the federal government to offer wind and water coverage to homeowners in hurricane-rich areas like his district, through Congress have stalled. A big reason for that is the U.S. Chamber of Commerce and the insurance industry’s adamant stance against it, and the subsequent unleashing of their armies of lobbyists to kill it.

“It will, unfortunately, probably take a major East Coast hurricane, with some other people suffering as we suffered, for us to pass insurance reform,” Taylor told the Sun Herald in its Sept. 11 edition.

A favored tactic of the business lobby when it runs into opposition is to label its opponents “anti-business.” Most politicians, from both parties, are terrified of that label. Some Republicans would rather kiss Nancy Pelosi than be slapped with it.

That label won’t stick to Taylor, though.

Because five days after his insurance rant, he became the first Democrat to join the GOP’s effort to repeal the recently passed Patient Protection and Affordable Care Act, commonly called healthcare reform. It was a major victory for Democrats this summer when it passed, and its repeal has become the centerpiece of many a campaign this fall. Business groups and trade associations hate it, and want it gone yesterday. So does Taylor.

“I didn’t vote for it, people don’t want it, and the taxpayers cannot afford it,” Taylor said in a statement issued on his website.

In less than a week Taylor has called out one of the biggest, most powerful and richest segments of the business lobby over one of his pet projects, and likely enraged his party leadership over one of theirs.

Say this for him: He believes what he believes. That’s pretty rare in a politician these days.

David Hasselhoff — promoting Coast tourism?

August 13th, 2010 4 comments

Observations and opinions to close out the week …

Gov. Haley Barbour announced in a press release this afternoon that the CW Network will air a one-hour special Aug. 27 that will “highlight the resilience and spirit of Gulf Coast residents.”

The timing of the event, designed to promote tourism, is right, considering Aug. 27 is two days before the fifth anniversary of Hurricane Katrina, and what with the oil spill and everything. Mississippi residents can even appear as extras.

What is curious, though, is the man who will serve as the event’s host — David Hasselhoff.

Knight Rider David Hasselhoff? Yes.

Lifeguard David Hasselhoff? You bet.

Cheeseburger aficionado David Hasselhoff? Yep.

The special will air from the Mississippi Coast Coliseum in Biloxi, which also happens to have a franchise of the hamburger joint Mugshots. Just sayin’.

Moving on, if you’ve read this week’s edition of the MBJ — and if you haven’t, what’s the hold-up? — you’ve read seen the efforts to lure the SEC Baseball Tournament to Trustmark Park in Pearl. Metro Jackson is fighting an uphill battle to land the tournament, for two reasons: The Confederate emblem on the state flag; and the size, or relative lack thereof, of Trustmark Park.

The Southeastern Conference has already said the flag will be a part of its evaulation, and Trustmark Park is the second smallest stadium of any involved in the bidding. Magnolia Marketplace would be surprised — really, really surprised — if the Tournament ended up anywhere other than Memphis. Memphis has made it known for years, basically ever since Autozone Park was built in the late 1990s, that it would like to host the event. With the biggest stadium of all the cities pushing to host, and with hundreds of hotels and restraurants in the area, many within walking distance of the park, it’s our guess that it’s Memphis’ to lose.

The SEC would take a lot of heat if it simply  handed the Tournament to Memphis. Opening it up for bids is probably a way of covering a few tracks.

In Gulfport, it’s hot but there’s no oil

June 15th, 2010 No comments

Magnolia Marketplace took a trip to the Mississippi Coast this past weekend to watch the wife compete in a tennis tournament.

Here’s what we know: It’s as hot as I can ever remember it being this time of year. But that’s about as bad as the news got as far as the conditions in Gulfport, where we stayed. The beaches are clear. The water of the Mississippi Sound is murky but it always has been. There was no oil that I could see anywhere — in the water or on the beach. There was no smell of oil that I detected.

So take that for what it’s worth.

This oil spill mess is going to affect just about every industry and its interests in Mississippi, and it will affect them for a long time, not unlike Katrina.

So this week we’re continuing our look at how some of those industries are adjusting their game plans and preparing for if/when oil reaches the Mississippi Sound or our beaches.

Toyota feeling less than Super

February 8th, 2010 No comments

So the Saints won the Super Bowl, Drew Brees won the game’s MVP, and according to various national media outlets, poverty, corruption and every other scourge on New Orleans is gone forever, or at least that’s what the hours of pregame coverage yesterday seemed to imply. And if there is anybody north of Memphis who is aware that Hurricane Katrina did her worst damage in Mississippi, I’d like to meet that person.

Moving on.

Toyota announced yesterday that it will unveil its plan of action for dealing with the problems that have arisen with the Prius’ antilock braking system. This is the latest blow in the wave of recalls to hit the company the past couple of weeks.

We have a message in to the Toyota Motor Manufacturing North America folks in an effort to get a few details on when they’ll make the announcement, and what exactly it will entail.

When we hear back from them, we’ll post what they have to say.

UPDATED AT 10:52 A.M.: Still no word from the stateside Toyota folks, but Kyodo News in Japan is reporting that about 300,000 Prius hybrids will be recalled. Details are here.

UPDATED AGAIN AT 12:53 P.M.: Magnolia Marketplace just heard from Mike Michels, spokesman for Toyota Motor Sales USA. He did not provide a timetable for when Toyota would issue its Prius solution, saying only that it would be “early this week. Otherwise, there’s nothing to report,” he said.

Categories: Hurricane Katrina, News, Toyota Tags:

Chaney addresses Stennis crowd

September 8th, 2009 No comments

I meant to post a reminder this morning, but the official server of Magnolia Marketplace was late to realize that the Labor Day holiday did not stretch into Tuesday.

Nevertheless, Mississippi Insurance Commissioner Mike Chaney keynoted today’s monthly luncheon of the Stennis Capitol Press Corps. Chaney hit on a number of things during his roughly 35-minute presentation that featured a slideshow. The biggest news, and it wasn’t really news, is that Chaney said there was “no way” the Mississippi Insurance Department was going to grant State Farm’s request for a 45 percent rate increase in homeowner’s insurance policies on the Mississippi Coast. Chaney had made that assertion shortly after the company formally asked for it a couple weeks ago.

The MID is also freezing some open positions, including those that would inspect mobile homes in the state, while the budget situation remains unsettled. Chaney did say that he would issue a request for proposals “in the next 14 to 21 days” to private companies to perform the inspections.

The rest of the Chaney’s time at the podium was spent running down the details of the State Fire Academy. Chaney, by statute, is the boss of it, and it looks pretty interesting. There are several cars and even an airplane submerged in a lake on the premises that act as training aids for rescue operations that require underwater maneuvering around cars and/or airplanes.

Pretty neat, right?

Governor, First Lady salute Katrina volunteers

August 27th, 2009 No comments

As we mentioned yesterday, Gov. Barbour and First Lady Marsha Barbour were scheduled to honor two volunteers who helped Mississippi out a whole bunch after Hurricane Katrina. Honor them they did.

Ellen Ratner and Cholene Espinoza, two New Yorkers who work for Talk Radio News Service, were at the Governor’s Mansion this afternoon to be recognized for the work they did after Katrina. Barbour said for the first 12 months after Katrina, the state was able to capture the names and addresses of 600,000 different volunteers who helped with the recovery.

“They came from literally every state in the country and many from outside the United States,” the governor said

Ratner and Espinoza played a big part in the building of the Marsha Barbour Community Resource Center in DeLisle in Harrison County. “They took the bull by the horns and they raised the money and put the team together, the team on the ground,” Gov. Barbour said.

Dedication for the Center is Saturday. It will feature a swimming pool, computer lab, a medical room to treat minor medical issues, a basketball court and everything else a community center needs.

“The only way I can reconcile the images of Katrina is if something good came of it,” Espinoza said.

Ratner, in her role as the host of a liberal-leaning talk show, has known Barbour a while. She had a lot of good things to say about Marsha Barbour and her work immediately after the storm.

“This is an amazing story and it’s an amazing story of true leadership,” Ratner said.

Ratner and Espinoza are only two of the army of people who spent their own time and money to help South Mississippi get back on its feet. As big as the storm was, the helping hand we got was even bigger. That’s probably one of the most important things to remember as the fourth anniversary approaches.

So to Ratner, Espinoza and all the others: Thanks, ya’ll.

Governor, First Lady holding press conference

August 26th, 2009 No comments

Gov. Barbour and his wife Marsha will hold a press conference tomorrow afternoon to recognize some of the volunteers who have helped South Mississippi with the recovery from Hurricane Katrina and who have had a hand in the development of the Marsha Barbour Community Resource Center in Pass Christian. If you’ll remember, the First Lady was on the frontlines during and after the storm. The details of the press conference will be posted as soon as it’s over.

The four-year anniversary of Katrina is this Saturday. Hard to believe. Magnolia Marketplace is playing in a charity golf tournament in Gulfport that day, a day that should carry a lot of emotions for our fine folks on the Coast.

State Port at Gulfport

August 19th, 2009 No comments

Moving forward there hopefully will be a new post before this time every morning, but Magnolia Marketplace has just gotten Internet service back after losing it late yesterday afternoon. The final tally: One replaced ethernet cord and one very patient, helpful and probably frustrated IT guy at the corporate office in Minnesota. To some news …

My trip to Gulfport last month for the “ground-making” ceremony at the State Port was one of the neatest things I’ve done since I started here.

Several college buddies live on the Coast, and I’d passed both Port entrances probably 100 times, but the ceremony was the first time it had registered. What jumped out immediately were the hundreds of tractor trailers that had the Chiquita Banana logo on them.

Anyway, the Port is undergoing a rebuilding and expansion as part of the recovery from Hurricane Katrina. Word came yesterday afternoon that the Mississippi State Port Authority had awarded a contract to Pennsylvania-based Geospatial Holdings to map the Port’s underground pipeline utilities. Geospatial is part of a team that includes Mississippi Engineering Group, part of Jackson-based Waggoner Engineering, and Pickering Engineers, which is based in Memphis but has offices in Jackson, Pearl, Southaven and Biloxi. The group will eventually map above-ground and underground utilities before the heavy lifting of the 20-acre expansion can start.

By itself the underground mapping contract, according to a press release, is expected to be worth about $3 million over three years. The overall cost of the expansion is $22.5 million, paid for with federal money. Along with expanding it, the Port will eventually be elevated to 25 feet above sea level to minimize damage from future hurricanes. Gov. Haley Barbour’s decision to set aside $570 million in Community Development Block Grants to pay for the elevation has drawn a lawsuit from the NAACP and criticism from several Democrats in Congress who want that money used for low- and moderate-income housing. The lawsuit is ongoing.