Quick Update: Irma


by Karl Denninger, Market Ticker:

In “The Bar” on the Ticker, where the grandfathered can discuss various topics among themselves (part of what was formerly “Tickerforum”) as Irma was approaching I pointed out that if the storm took a somewhat-southerly path and impacted Cuba that due to the terrain there limiting inflow and the organization of the storm it would be materially disrupted — to the point that would much limit the damage the US would take.

That turned out to be exactly correct.

It wasn’t good for Cuba, of course.  We don’t know exactly how much damage Cuba took but there are reports that at least one of their airports was destroyed.  It’s probably fair to assume that anything on the northern coast or barrier islands where the storm traversed is either severely damaged or gone.  Of course Barbuda, along with other islands in the chain that took the full force were also severely damaged; St. Maarten (which I’ve visited before) is trashed.

I will also note for the climate screamers that Irma was not the longest-running “Major” in the modern record.  Ivan was.  We got hit by Ivan here.  This is not to denigrate Irma and the fact that as a Cat 5 she was a royal bitch, because she was — but let’s also remember that we’ve only had the sort of “accurate” watch on these things that we enjoy today since roughly the 1960s, when weather satellites showed up.  Prior to that you knew when there was a hurricane coming when…. well, it “got someone”, either a ship, an island, or it got close enough to either that you could see it on radar.  Prior to WWII there was no radar either.  So arguing that Irma broke a record, or that “climate change” is responsible is just flat-out bull****.

A friend of mine in Venice is apparently without water service due to a main break.  I’m sure there are more of those, and of course the power is off in a lot of places throughout the state.  Flying trees and power lines don’t get along very well.

The market seems to think hurricane impacts are bullish given the overnight hours.  Frankly, I think that’s nuts; destroying capital is never bullish and when the “response” will be to borrow more money we don’t have and spend it since there’s no capital surplus left anywhere, either among people or governments it’s even worse.  Of course among the “reinsurance” stocks everyone thinks it’s grand since rates will be going up (and probably a lot) in that regard, which of course is “bullish” too when everyone’s homeowner’s and business insurance costs will be rising whether they were damaged or not.  Yes, this will be good for “profits”, right?

Uh, no.

But boy it is good for certain people.  I have no argument with the linemen and women who are just waiting for the wind to die down so they can start restoring power, and who will be making $30,000 in the next month or so working 100 hour weeks.  Overtime is beautiful when you can get it like that, and it will certainly be good for them.  Think about that one when you local High School is pressuring your kid to go to college; instead, perhaps he or she ought to learn how to string wire.

But the idea that somehow our so-called “free market” will and should cheer events like this is sickening, especially when nobody has put back reserves for these events and nobody will in the future either.  Instead we’ll hear about how “wonderful” the market’s response is, and why paying $2.65 or more a gallon for gas that was $2.25 a couple of weeks ago is a “good thing” too.  The climate screamers will lie some more about CO2 and its impact (folks, more CO2 is good — unless you want people to die from starvation, that is!) and kill a few million more birds with their windmill follies (speaking of which, how do they hold up under Cat 3+ hurricane winds?) while Musk will snicker at all the Tesla owners who he “unlocked” for a week while they were trying to flee.  Speaking of that, how’s that going to work out for them when they try to return home with no power at any of the “Supercharger” stations?

Then there’s the hotels and such who have and will make bank; all good for them, but not so much for those who evacuated and didn’t get damaged.  They don’t get to claim anything from insurance for that evac; it comes out of their pockets.  How many of them can pay off that credit card at the end of month?  Since we know that 75{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the population lives paycheck-to-paycheck the answer will be almost nobody.  But that’s “bullish” too, right?  Wrong.

Anyway, ’nuff said.  The crooners will be “buy stawks, all the time” of course — that’s what they do.  The broken window fallacy will be out in force, as if the only capital goods destroyed were all old and worthless, thus replacing old with new will be a net positive.  There might be an argument for this in limited cases had there been capital surplus people and governments had accumulated over time, but between Obamacare and the rest of the government always spending more than they take in, along with the sorry and in fact near-bankrupt state of most individual Americans’ finances, this is utter horse****.

The political aspect has already started and will get worse.  But you might want to consider the perspective of those who have modeled the atmosphere and gotten it provably right instead of all the screamers who have done so and repeatedly gotten it wrong, which is true of all of the so-called “global warming” models and those pushing them like heroin to a credulous population and political class, all of whom demand more of their heroin and fentanyl like good junkies groveling before their pusher.  If we could find two functional neurons between 330 million Americans we’d hang the climate screamers trying to steal by using natural events as their “bait”, but we don’t and thus they’re all safe from said wrath.

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