Special Update Live From Houston
Rodney Johnson, Houston, Texas
ECONOMY & MARKETS August 28, 2017
It’s not over yet. Hurricane Harvey made landfall on Friday night, and almost no one cared.
We had rain. Big deal. Then more rain on Saturday as the storm sat, almost stationary. Harvey lost power and was demoted to a tropical storm.
We went out to dinner, noting the water was over the seawall in some parts of our waterfront neighborhood south of Houston, north of Galveston. Then we had more rain.
Overnight, a weakened Harvey meandered a mile this way and that, pulling moisture from the gulf, dumping it in our laps and homes.
My sister texted at 6:45 a.m. Sunday. Water in their house and rising. They salvaged what they could and took the dogs upstairs to wait.
It kept raining. Water crept toward our home. All we could do was watch.
Again, my sister called. The water was 15 inches high. They turned off the electricity to avoid fires and electrocution. Her 2015 Corvette, electric blue with chrome rims, floated aimlessly in the garage alongside her daily driver, a Nissan Maxima. Their Chevy Tahoe sat in the driveway, with water up to the wheel wells.
The nursing home full of elderly sitting in three feet of water in their wheelchairs is five miles away. Neighbors are helping neighbors. City officials and emergency responders are asking anyone with a boat or tall vehicle to please help. It’s Texas. We have a lot of those vehicles. And they all want to help.
By Monday morning, all 22 drainage ways in the Greater Houston area, from ditches to rivers, were reported at or over flood stage. We expect them to crest at 500-year, or even 1,000-year, flood levels.
Some of that flood water will pass by my neighborhood. Combined with the continued rain, it might get in my house. It might not. All I can do is wait. Which gives me time to think.
As the rain pours outside and rescue efforts fill the television screen, I see the days and weeks to come. There will be heartbreak and heroics. And then there will be the long effort to restore what was lost.
The energy industry will grab the headlines. It’s Houston, after all. The latest report I’ve seen expects 11% of refining capacity to be offline for weeks. I’ll pay more for gas. For a while. But that’s very short term.
Right now my sister and brother-in-law are cutting out carpet. They are starting to clean up before the storm is over. They’re not alone.
They live in an upper-income neighborhood 20 miles south of Houston, along with hundreds of thousands of others. Harvey didn’t discriminate. We just heard that another subdivision is now under mandatory evacuation. It’s a nice place. Homes from the $200,000s to the millions. It is likely that they will all take on water. And then the owners will return and start cutting out carpet.
This isn’t Katrina. It’s bigger. The damage is spread over a greater area. Harvey is now dumping rain on Louisiana.
The cleanup and restoration efforts will go on for months and years. In the tragedy, I see jobs. I see commerce. I see forces combining to use this for their own ends.
People will need new floors. And furniture. There’s no doubt my sister will have to cut the bottom two feet of sheetrock from the entire first floor of her home and wait for the walls to dry out before replacing. Now multiply that by hundreds of thousands of homes. Home Depot won’t be able to keep up. Think of all the refrigerators that will be replaced, along with dishwashers and TVs.
We should see our unemployment rate fall as close to zero as possible. Any capable person should be able to land a job at least hauling debris, if not actually renovating homes.
And the cars.
GM, Ford and other automakers were struggling this year. This will bail them out. But maybe not all of them.
I’d be surprised if GM CEO Mary Barra, Ford Chairman Bill Ford, and President Trump weren’t in touch over the weekend. The auto execs see a chance to help possibly one million Americans get back on four wheels by putting them in new vehicles, which also helps their bottom lines. The president gets to help Americans while spending relief dollars on a sympathetic cause. It boosts the economy.
And he can make it better. The President can create another “cash-for-clunkers” program that favors cars built on U.S. soil. No one wants previously flooded cars on the used car market, so this helps the entire system.
Those with affected vehicles get bonus cash toward a new car when they turn them in to be destroyed. Maybe the program is limited to Fords and Chevys, but perhaps you can also buy a BMW made in Spartanburg or a Mercedes made outside of Tuscaloosa.
It’s still raining.
And now the wind is picking up. Harvey went back out to sea, and is expected to wander north again, coming right over my house. It might be a good thing, since this would keep the bulk of the rain to our east and north. But that means more flooding in Louisiana. And more north of Houston. That water has to go somewhere.
We’ll spend the next few days dealing with this terrible disaster, and then the next several months and possibly years dealing with restoration and replacement. The money has to go some where, too.
As the healing and rebuilding begin a few days from now, opportunity will emerge, too.
I’ve spoken with experts and they agree that a historic natural disaster like this means it’s almost inevitable that sectors like infrastructure, home improvement, autos and more will get a considerable bump.
We had rain. Big deal. Then more rain on Saturday as the storm sat, almost stationary. Harvey lost power and was demoted to a tropical storm.
We went out to dinner, noting the water was over the seawall in some parts of our waterfront neighborhood south of Houston, north of Galveston. Then we had more rain.
Overnight, a weakened Harvey meandered a mile this way and that, pulling moisture from the gulf, dumping it in our laps and homes.
My sister texted at 6:45 a.m. Sunday. Water in their house and rising. They salvaged what they could and took the dogs upstairs to wait.
It kept raining. Water crept toward our home. All we could do was watch.
Again, my sister called. The water was 15 inches high. They turned off the electricity to avoid fires and electrocution. Her 2015 Corvette, electric blue with chrome rims, floated aimlessly in the garage alongside her daily driver, a Nissan Maxima. Their Chevy Tahoe sat in the driveway, with water up to the wheel wells.
The nursing home full of elderly sitting in three feet of water in their wheelchairs is five miles away. Neighbors are helping neighbors. City officials and emergency responders are asking anyone with a boat or tall vehicle to please help. It’s Texas. We have a lot of those vehicles. And they all want to help.
By Monday morning, all 22 drainage ways in the Greater Houston area, from ditches to rivers, were reported at or over flood stage. We expect them to crest at 500-year, or even 1,000-year, flood levels.
Some of that flood water will pass by my neighborhood. Combined with the continued rain, it might get in my house. It might not. All I can do is wait. Which gives me time to think.
As the rain pours outside and rescue efforts fill the television screen, I see the days and weeks to come. There will be heartbreak and heroics. And then there will be the long effort to restore what was lost.
The energy industry will grab the headlines. It’s Houston, after all. The latest report I’ve seen expects 11% of refining capacity to be offline for weeks. I’ll pay more for gas. For a while. But that’s very short term.
Right now my sister and brother-in-law are cutting out carpet. They are starting to clean up before the storm is over. They’re not alone.
They live in an upper-income neighborhood 20 miles south of Houston, along with hundreds of thousands of others. Harvey didn’t discriminate. We just heard that another subdivision is now under mandatory evacuation. It’s a nice place. Homes from the $200,000s to the millions. It is likely that they will all take on water. And then the owners will return and start cutting out carpet.
This isn’t Katrina. It’s bigger. The damage is spread over a greater area. Harvey is now dumping rain on Louisiana.
The cleanup and restoration efforts will go on for months and years. In the tragedy, I see jobs. I see commerce. I see forces combining to use this for their own ends.
People will need new floors. And furniture. There’s no doubt my sister will have to cut the bottom two feet of sheetrock from the entire first floor of her home and wait for the walls to dry out before replacing. Now multiply that by hundreds of thousands of homes. Home Depot won’t be able to keep up. Think of all the refrigerators that will be replaced, along with dishwashers and TVs.
We should see our unemployment rate fall as close to zero as possible. Any capable person should be able to land a job at least hauling debris, if not actually renovating homes.
And the cars.
GM, Ford and other automakers were struggling this year. This will bail them out. But maybe not all of them.
I’d be surprised if GM CEO Mary Barra, Ford Chairman Bill Ford, and President Trump weren’t in touch over the weekend. The auto execs see a chance to help possibly one million Americans get back on four wheels by putting them in new vehicles, which also helps their bottom lines. The president gets to help Americans while spending relief dollars on a sympathetic cause. It boosts the economy.
And he can make it better. The President can create another “cash-for-clunkers” program that favors cars built on U.S. soil. No one wants previously flooded cars on the used car market, so this helps the entire system.
Those with affected vehicles get bonus cash toward a new car when they turn them in to be destroyed. Maybe the program is limited to Fords and Chevys, but perhaps you can also buy a BMW made in Spartanburg or a Mercedes made outside of Tuscaloosa.
It’s still raining.
And now the wind is picking up. Harvey went back out to sea, and is expected to wander north again, coming right over my house. It might be a good thing, since this would keep the bulk of the rain to our east and north. But that means more flooding in Louisiana. And more north of Houston. That water has to go somewhere.
We’ll spend the next few days dealing with this terrible disaster, and then the next several months and possibly years dealing with restoration and replacement. The money has to go some where, too.
As the healing and rebuilding begin a few days from now, opportunity will emerge, too.
I’ve spoken with experts and they agree that a historic natural disaster like this means it’s almost inevitable that sectors like infrastructure, home improvement, autos and more will get a considerable bump.
The opportunity is just too obvious… and the profit potential too great.
Thanks,
Rodney
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