Harvey May Be "Costliest Natural Disaster In US History" With $190 Billion Price Tag

Tyler Durden's picture

Tropical Storm Harvey made its second landfall near Cameron, La. on Wednesday after slamming Houston with a staggering 50 inches of rain, the largest rainfall ever recorded in the Continental US. Given the unprecedented devastation, which will likely leave large swaths of Houston, America’s fourth-largest city, uninhabitable for weeks if not months, storm-watchers have scrambled to revise their initial forecasts for damages. Initially, the consensus projection was somewhere around $40 billion, with Moody’s forecast that property damage caused by the storm would total between $30 billion and $40 billion.

If accurate, that would leave Harvey as the fourth-most expensive hurricane in US history, after Hurricane Andrew (1992), Superstorm Sandy (2012) and Hurricane Katrina (2005). However, after five days of torrential rains, one forecaster believes the $30-$40 billion figure would barely cover a quarter of the damage.

Dr. Joel N. Myers, founder, president and chairman of AccuWeather, now believes Harvey could become the costliest natural disaster in US history, ultimately costing the US economy an eye-popping $190 billion in property damage and lost productivity once the "total destruction is completed." Such an astronomical price tag would be more than the combined costs of Hurricanes Katrina and Sandy, he said.

Here’s USA Today:

“Hurricane Harvey could be the costliest natural disaster in U.S. history with a potential price tag of $190 billion, according to a preliminary estimate from private weather firm AccuWeather.

 

This is equal to the combined cost of Hurricanes Katrina and Sandy, and represents a 0.8% economic hit to the gross national product, AccuWeather said.

 

‘Parts of Houston, the United States' fourth largest city, will be uninhabitable for weeks and possibly months due to water damage, mold, disease-ridden water and all that will follow this 1,000-year flood,’ said AccuWeather president Joel Myers.”

While many analysts are focused on southwest Texas and western Louisiana, Myers warned that Harvey could continue to inflict severe damage even after being downgraded to a tropical depression – which is expected Wednesday – the storm will continue to dump as much as 10 inches of rain on the Mississippi Valley.

“Though Harvey will slowly weaken into a depression as it tracks inland, it will still produce more rain – 3 to 6 inches from southwestern Louisiana up along the Arkansas/Mississippi border and into western Tennessee/Kentucky through Friday. Some areas could see as much as 10 inches of rain.

 

Flash flood watches are in effect for much of the Mississippi Valley due to the heavy rain threat.

 

‘AccuWeather cautions that the negative impact from the storms are far from over. There will be more flooding, damage, fatalities and injuries,’ Myers said. ‘We urge all citizens near the path of Hurricane Harvey to remain vigilant and be prepared to take immediate action if flood waters rise.’”

Accuweather isn’t the only firm forecasting damages that’re much higher than the national average. Risk Management Solutions believes the total economic loss could be somewhere between $70 and $90 billion.

While property damage is expected to account for a sizable chunk of this cost, some sell side analysts believe the storm could ultimately have a postive impact on GDP if it triggers a construction boom, which would be positive for GDP. Sell-side research analysts have offered conflicting views. So far, Citigroup and Goldman Sachs expect storm-related productivity losses will lead to a net negative impact on Q3 GDP, while. J.P. Morgan, meanwhile, predicts that the post-storm rebuilding will boost GDP in Q3 and Q4. Of course, the size of said boom will probably depend on how much money Congress earmarks for federal assistance. Trump, who has promised to swiftly pass an aid bill, is shaping up for a battle with Congress over the legislation as some conservative lawmakers will likely ask that any additional spending be offset by cuts elsewhere.

But with an estimated 30,000 Texans staying in shelters because of the storm, Goldman's Jan Hatzius, Goldman's chief economist, that due to the human tragedy from Hurricane Harvey, the odds of a govenment shutdown happening during the coming weeks have been again reduced back to Goldman's original estimate of 33%.

The Wall Street Journal appears to agree with JPM.

“Even the largest storms have typically not permanently damaged the U.S. economy. This is in part because storm often spark construction booms that employ tens of thousands of people to clean up and rebuild.

 

Gross domestic product, the main yardstick of economic growth, doesn’t account for property damage but it does account for rebuilding, so the measure can climb after storms due to activity involved in rebuilding.”

Harvey will also impact the economy in other less obvious ways.

“Other economic measures could be skewed in the weeks ahead. The initial weeks after similarly large storms have sometimes produced rising claims by waylaid workers for unemployment insurance. After Hurricane Katrina, for example, jobless claims climbed by over 100,000 per week, although the high-level of claims didn’t persist.”

FEMA Administrator Brock Long has said that Harvey will be “unfathomably expensive for both the private sector and taxpayers.” If Moody’s forecast is accurate, Harvey will cement its position as the fourth-most costly storm in US history behind Hurricane Andrew, which ravaged Florida in 1992.

Since the storm first struck Friday night, damage estimates have been in a state of flux. On Tuesday morning, disaster analyst Chuck Watson had pegged $42 billion as a reasonable estimate for the cost of destruction Tropical Storm Harvey would leave in its wake.

By the end of the day, he’d added another $10 billion.

To be sure, with rains expected to pummel Texas for the next few days, any estimate of the storm’s final total will likely be premature. One twitter user, a purported environmental engineer and Houston resident, believes damages could exceed $500 billion.

If accurate, JPM’s construction-boom thesis might not be far from the mark. Though, at that point, US insurers would likely begin to experience significant stress.

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Son of Loki's picture
Residents warned to ‘get out or die’ as Harvey unleashes new waves of punishing rains and flooding

 

http://www.msn.com/en-us/news/us/residents-warned-to-%e2%80%98get-out-or...

 

 

"But da Mayor Sylvester told us to stay....."

 

Shemp 4 Victory's picture

Somehow it seems that the $190 billions estimate will at some point be looked back on as optimistic.

SWRichmond's picture

So no doubt according to Krugman this will reflate the economy...

The Cooler King's picture

So what does Gartman do for an encore?

peddling-fiction's picture

HAARP the storm back for another pass.

NoDecaf's picture

190 Billion?

 

Now try to imagine the economic damage that QE3 was(is) doing at 85 Billion a month. At least with the hurricane the results are more immediate and tangible.

shovelhead's picture

We needed QE3

Bankers were dying in the streets.

Slack Jack's picture

Harvey May Be "Costliest Natural Disaster In US History" With $190 Billion Price Tag. How much to move all of Houston when the sea eventually covers it all?

So, why is the global rise in temperatures so worrisome?

For one thing, as temperatures rise good farmland will become desert (e.g., dust-bowl conditions will probably return to the American Midwest).

Another major problem is sea-level rise.

Have a look at http://pubs.usgs.gov/fs/fs2-00/

The U.S. Geological Survey people claim that;

The Greenland ice sheet melting will raise sea-level 6.55 meters (21.5 feet),
the West Antarctica ice sheet melting will raise sea-level 8.06 meters (26.4 feet),
the East Antarctica ice sheet melting will raise sea-level 64.8 meters (212.6 feet),
and all other ice melting will raise sea-level 0.91 meters (3 feet).

For a grand total of about 80 meters (263 feet).

So, what does an 80 meter (263 feet) rise in sea-level mean. Have a look at the following map of the world after an 80 meter rise. It means that over one billion people will have to be resettled to higher ground and that much of the most productive agricultural land will be under water. Fortunately, at current rates, the Greenland ice sheet will take over a thousand years to melt and the Antarctica ice sheet, much longer. However, the greater the temperature rise the faster the ice sheets will melt, bringing the problem much closer. Remember, the huge ice sheet that recently covered much of North America, almost completely melted in only 15,000 years (today, only the Greenland ice sheet, and some other small patches of it, remain). Since then (15,000 years ago), sea-levels have risen about 125 meters (410 feet), only 80 meters to go.

The ice sheets have been continuously melting for thousands of years. What is left of them today, is still melting, and will continue to melt. Human caused global warning will cause this remnant to melt significantly faster. This is a big, big, problem.

For HUGE detailed maps of the "World after the Melt" go to:

http://preearth.net/phpBB3/viewtopic.php?f=16&t=23

Global temperatures are increasing. And by quite a lot each year.

2016 is the hottest year on record for global temperatures.

This is 0.0380 degrees centigrade hotter than the previous record year which was 2015.

0.0380 is a large increase in just one year.

2015 was the hottest year (at that time) for global temperatures.

This was 0.1601 degrees hotter than the previous record year which was 2014.

0.1601 is an absolutely huge increase in just one year (at this rate temperatures would increase by 16 degrees in a century).

2014 was the hottest year (at that time) for global temperatures.

This was 0.0402 degrees hotter than the previous record year which was 2010.

http://preearth.net/images/temp-anomalies-1880-2017.txt

The conspiracy to hide global warming data.

The National Oceanic and Atmospheric Administration (NOAA) is given tax money to make global temperature records available to the public. However, certain people at NOAA continually sabotage this aspect of NOAA's mandate. For example, these people have (deliberately) sabotaged the web-page that delivers the temperature records.

Look for yourself:

Go to the page: https://www.ncdc.noaa.gov/monitoring-references/faq/anomalies.php scroll down to the The Global Anomalies and Index Data section and click the download button and see what happens. Well, you get the message:

"Not Found. The requested URL /monitoring-references/faq/anomalies-download was not found on this server."

I guess that the 2017 data must be truly horrible if they have to hide it away.

It turns out that this seems to be the case; NASA reports that:

July 2017 had the hottest average land temperatures on record.

The new July 2017 record was +1.20 degrees centigrade above the 20th century average (of the July data). The previous record average land temperature for July was just last year. It was +1.10 degrees above the 20th century average.

Did the media bother to tell you about this? No!

http://preearth.net/phpBB3/viewtopic.php?f=16&t=23

FireBrander's picture

The insurance companies are all smiles...

"I'm sorry, but your property was destroyed by a flood; your home owners policy doesn't cover floods".

FireBrander's picture

They love that "flood damage" excuse.

Poor local slob has a water main break in the street in front of their home...water rushes into the home...insurance company "we don't cover flood damage"...bastards.

Manthong's picture

 

Mother nature ain’t got nothing on Bush, Obama and Bernanke… talk about disasters.

And just wait until the big one in Kalifornia or Cascadia happens.

bobbbny's picture

How many once in 1000 year disasters have we had now?

SokPOTUS's picture

Pray he doesn't make any meteor predictions.

Kidbuck's picture

Any part of Houston that is now uninhabitable has always been uninhabitable by anyone but the reckless and idiots, and these places will forever continue to be uninhabitable by anyone but the reckless and idiots.

Who is to say next year won't bring an even bigger storm making even more of the city on a swamp uninhabitable?

Mr 9x19's picture

trump said " drain the swamp " or "flood the swamp" ? , i'm lost !?

EINSILVERGUY's picture

you forget the poor. Some areas are inexpensive and can only be afforded by the poor.

spastic_colon's picture

should be good for another 110 dow points..............and there you have it folks, green month all around for the indexes; right down to the wire.........again......its wonderful to be an american when you can profit from others severe misfortune.....and they made it to tomorrow, the 1st of the month on a friday no less..........we are so blessed................

GUS100CORRINA's picture

Harvey May Be "Costliest Natural Disaster In US History" With $190 Billion Price Tag

My response: BULLISH!!!!!

See what happens when you build America's 4th largest city on top of a Marsh and a Swamp.

I woke up's picture

Less than 3 months of QE at its peak.  Shows the craziest of the money printing that went on.

NoDecaf's picture

Great minds think alike, but you were 30 minutes ahead of me ;) I posted the same thought above.

lurker since 2012's picture

Look   LOOK ....... Broken windows.... we alll be RICH

Schmuck Raker's picture

Really? The San Franscisco earthquake of 1906 was just a flesh wound? Or was that man-made?

Edit: Damn, I'm wrong again:

$500,000,000 in 1905 = $12,964,801,590.30 in 2016
Pollygotacracker's picture

They killed off 50,000+ horses hauling off the debris. Pathetic.

Son of Loki's picture

I just read on USPS that dozens if not hundreds of post offices in Houston and the entire surrounding area still closed and many in La.

 

My friend in Houston says almost all fast food places still closed but some groceries open.

two hoots's picture

We should shutter all post offices as they are lossing billions delivering junk mail.  Time to go digital and let private companies do the grunt  work.  Another pension catastrophe.

Kidbuck's picture

The postal service is already moving to convert more of its employees to mimimum wage contractors, no benefits, no medical plan, no retirement. No reason to keep this white elephant on life support any longer. Even most government agencies don't trust the postal service with anything time sensitive or important and use Fedex instead.

SokPOTUS's picture

That's an improvement, yes?

EINSILVERGUY's picture

Depends on where yoy are.

Everything is normal for large areas of NW houston

hotrod's picture

Best thing to happen to the USA in years.  Fuck climate change we need more natural disasters to get this ECONOMY ROLLING.

beijing expat's picture

What's that, a couple weeks of Q eternity?

A months worth of NeoCon war scams?

swmnguy's picture

You just don't get it.  The War Machine gets $1 Trillion per year, counting all departments and off-the-books funding for the actual wars themselves.  Finance gets something like $16 Trillion over 4-6 years, counting the opportunity costs of artificially low interest rates and QE, etc.

That we can afford and we have to pay it because Freedom and America.

Fixing America's decrepit infrastructure, educational systems and finance (K-12 and Higher Ed), healthcare finance, retirement finance, would cost somewhere around $5 Trillion over a decade.

We can't afford that because that would be Socialism!

But allowing cronies to profiteer off of natural disasters with the taxpayer footing the bill is Freedom and America, too.  We'll have Blackwater supply the muscle and give the northwestern Gulf Coast to Amazon, on the taxpayer's dime.  We'll be Great again in no time.  As in The Great Chain of Being.  Feudalism, right out in the open, just the way many Americans seem to want it.

Now do you see?

konadog's picture

At $1T per year, more like 3 months ... but yea, puts the f*cking CIA and the MIC in perspective, doesn't it?

TacticalTrading's picture

Amazning how log it took them to figure this out. 

 

A. Boaty's picture

Washington DC has the same GDP as Dallas? WTF?

peddling-fiction's picture

Now if you take the lobbyist K-Street away, that number would drop considerably.

youngman's picture

Theres a lot of money in those paper sacks delivered to congress

two hoots's picture

Mayors and  Governor's, backed by builders and infrastructer  companies, are using this event, playing this event, as a opportunity to rescue/salvage their economies.   We must make all local and state governments responsible for approving building sites that have such risk.  It is unreasonable to always pass the responsiblity to Washington.  Of course all will work it for votes and popularity.   It's not fair to all concerned and needs a deciding remedy.   Who dare do it?   Sad for all affected. 

FoggyWorld's picture

What you are talking about is one good thing FEMA does.   They will map the entire area and then assign new building zones for every square inch.  If a town or city wants any money, they then will have to agree to use FEMA's rather tough building codes.  

It's a very expensive proposition but it's time to implement standards that work.   Most areas in the US to date have been controlled by politicans for the benefit of builders who avoid doing the right thing because it's more expensive.

It's sad that it takes devastation for people to wake up. 

swmnguy's picture

But zoning is pinko commie fascist socialist Rosicrucianism!  It's the Cathar heresy!  If we can't dump toxic waste on the ground and into the rivers, and shoot the mutant lizards with our unregistered arsenal, we might as well move back to Russia!

Colonel's picture

Awww how touching you think FEMA really cares for you. Organized crime to the rescue!

Alok's picture

natural disasters may be the best solution for the US, so it stop to spend money in wars and destruction of other countries, instead, put money to improve its own infrastructure...

Dratpmurt's picture

Science is fake, radiation is good for you, Toxic fumes are not toxic, You can look directly into the sun, no matter how much or what compound you add to the atmosphere it makes difference, Physics is fake, Trump is not a total moron.

CitizenPete's picture

Just 2 months of QE by the FED for the elite European stockholders of the primary dealer banks. Plus 6% guaranteed return by law.

buzzsaw99's picture

my memory must be failing because i swear the usa gubbermint alone gave those sandy maggots $200B to play with for almost zero damage.  harvey, andrew, and katrina on the other hand, they deserve every penny because they had actual damage.

totenkopf88's picture

some Jersey wops' beach houses got wiped out

shovelhead's picture

Geddafuggattaheah, you friggin mook!

 

Herodotus's picture

How does Washington, DC have a GDP?  They don't produce anything of value.

YUNOSELL's picture

The Real Estate & Houston Bubble