Sandy, the U.S. Economy, the Election, and “Our Portfolios”

I got on a call from the Investment Management Division at Goldman Sachs to learn what people had to say about Superstorm Sandy’s impact on the U.S. economy, today’s elections, and how it may affect investor portfolios.

Joel L. Prakken from Macroeconomic Advisors said that although the storm has been devastating for individuals, its effect on the larger U.S. economy would be “negligible.” “I have to say I’m uncomfortable talking about the small affects on the economy, when I see individual impact,” he said. He said Hurricane Katrina shut down a “high value energy industry” in the Gulf of Mexico (oil!) which caused the U.S. gross domestic product growth to slow down by half a percentage point during the last six months of 2005. Sandy’s devastation mostly impacted residential properties. Prakken’s message was basically: Catastrophic for individuals, but everything’s fine on a national level.

According to a research and director of global macro analysis at Eurasia Group, the storm would also have a minor effect on today’s election, and if anything would boost Obama a little after the positive media coverage he’s received.

Lastly, the call concluded with: “There are no actionable changes to clients portfolio.” No need to do anything with our portfolios, you guys. Sandy didn’t do a thing to them!

Anyway, let’s all go out and vote today.

Support The Billfold

The Billfold continues to exist thanks to support from our readers. Help us continue to do our work by making a monthly pledge on Patreon or a one-time-only contribution through PayPal.