10-31-2012 07:16 AM
Still a very weird feeling around the trading floors this morning here in Chicago. Finally getting the whole world opened up and get a little bit of normal back in our daily lives.
Stocks opening higher. End of month so keep an eye our for any crazy stuff.
Oil up. Gold up. Euro is up. Everyone happy to be trading again and its reflected in the price board this morning. I don't think it will last long.
Corn is up 3, beans and wheat are up 6. Demand stories doing the rounds on the wires giving everything a boost.
You think you have seen a lot and then a storm like Sandy comes along....
10-31-2012 08:39 AM
Sandy has me wondering. They are saying 30 billion in damage(not including economic). There is massive damage from Sandy. Roads, transit, home, businesses, power grids, etc. All have to be rebuilt. Yet, it is only 30 billion. I say only, because the stimulus was almost a trillion dollars....which makes 30 billions chump change. Where in the world did all that trillion go?
10-31-2012 11:59 AM
I don't know exactly which effort you might have in mind, or all of them, but infrastructure was built by buying materials and paying wages. I know on the West Coast it seemed like in the space of two years every bridge on I-5 the length of the West Coast was rebuilt. I drove it two years. After that the more minor freeways and interstates in the West were rebuilt. You couldn't hire a big crane for love nor money. Lot of dozers and other construction equipment was bought.
Then there's all the paper the Fed bought whose value at any point in time depends on the recovery - bonds, loans ands obligations no one would buy as they had no cash. So paer and cash were swapped and it provided liquidity to keep things a float.
In that sense the value of the stimulus was traded for infrastructure and assets that are still there. You drive over 200 bridges on the freeway in a day you never notice - unless they're working on them.