September 7

September 7 –

The financial toll from the New Orleans disaster continues to grow.  Did you know that 40% of the exported agricultural production of the United States goes out the port of New Orleans?  Did you know that there is no port of New Orleans?  Do you know when wheat gets harvested?  Corn?  Anyone that thinks this is going to be good for the economy (and someone tried to tell me that yesterday) is nuts.  Stark, raving, nuts.

The suggestion was that at least builders were going to do well from this, which is sort of like saying that farmers do well when locusts eat everything in sight.  In the past few years there have not exactly been hundreds of builders in any part of the country hurting for work.  When those same builders – who were already working to capacity – have to stop building new houses and go back and replace old houses that weren’t paid for yet and now have to be paid for twice, that’s going to necessarily put a monstrous drag on the economies of two states.  And it won’t make the builders any more money; they were already making it as fast as they could.  Now they get to do the same work and be accused of taking advantage of people if they make any kind of profit.

Bonds are down in what appears to be a post-disaster stock rally.  We saw this after 9/11 as well.  People buy stocks to show solidarity with other Americans, a kind of let’s-get-through-this-together-the-economy-is-going-to-be-fine Pollyanna-ism.  That’s fine.  The underlying economy is not going to get through this without serious shocks.  Those shocks are going to keep bonds high.  At the moment, though, we’ve lost about a quarter point in price, though not enough to change rates any.  But another day of this, and we will rise an eighth (to about 5.875% on a 30 year).

My prediction about BYU (see below) was off a little.  So sue me.  I got BC’s score right.  And anyone out there that wants to tell me that they called the TCU game….

Meanwhile, the US men’s national team qualified for the World Cup again.  Standing invitation, anyone that wants to watch the matches next year (Deutschland ’06!) can come over and set up camp.  That month, there’s soccer 24x7 on the big screen.  You’d be most welcome.

Just to see who is reading this, I have two free tickets to Friday night’s Orem Owlz baseball game – first game of the playoffs – for the first person to email me.