Irene's Legacy

So, Irene has come, done her thing, and said adios . . . but this is a relationship that people will remember and even though you think you've told little Miss Irene "it's over; we're not dating anymore" she may have other plans.

Here is my, very high level, "prediction" for what comes next.

Flooding -- of course, this is the legacy that Irene leaves behind -- lots and lots of water. In some areas, the water will recede very quickly . . . but where does that water go? So just as some communities see the spill off rush in to the Atlantic, in other places, that water has further to go and like trickle down economics, the water is going to accumulate in some places more than others . . . hence, the "damage" from Irene is, for far too many, still yet to come.

This will de-stabilize certain areas due to a number of factors. Some places are "over built" and the natural run-offs have been modified considerably in order to artificially level the ground, in order to build, build, build. We are talking about an incredibly dense populace here along the Atlantic coast.

People who take a deep breath and think they've dodged the bullet may find a week from now that water damage has ruined their homes . . . and so this is also likely to be something of an emotional roller-coaster for hundreds of thousands of people. I expect the true damage estimates to unfold over a period of weeks rather than days.

Also: The ground itself, through years of pesticides and other practices designed to weaken its resiliency, is not as "absorbent" as it might be and, after heavy rains, at some point the ability for the ground to soak up the water will simply end.

This will lead to a couple of potential problems -- a big one, I would assume, being the likelihood of mud slides or destabilazation of the foundations for existing homes -- especially those in valleys or closer to the coast line as the water makes its way towards the sea.

Creatures -- not only has this massive rainfall and splish splash from the Atlantic tides moved "stuff" around, it has also been "surf's up" for any number of little critters that you would prefer not to find on your living room carpet. But wet soggy places are neon "Vacancy" signs to a large group of bugs that will soon be rooming with people not used to seeing them. This also includes the possiblity of rats as well as larger animals who would normally stay away from the cities who may be forced to relocate in order to find food. Not a fun scenario, but one I expect will happen soon.

Sewage -- not to "rain on your parade" too much -- but the possibility of sewage or septic overflow is very high. This will not only be kinda messy, it could also, worst case scenario, add to the likelihood of airborne diseases. Seeing floating turds rolling down Main Street is not a fun thought -- but it is a distinct possibity in some places.

INSURANCE FRAUD -- and here boys and girls is where the pedal and the road collide. Many of the houses that are damaged will not receive ANY money from their insurance claims -- put residents of New Orleans or the Mississippi coast on speed dial and ask 'em how that feels -- and so the economic implications of this are massive.

Some homes will be destroyed, even though they are probably salvagable. This will be an emotional nightmare for people, especially if their homes are condemned when, to them anyway, they look perfectly fixable.

Some may find that the reasons for THEIR HOME being leveled and some one else's being saved is based on factors other than the actual mechanics of how to fix their problems. I expect vultures to soon sweep in to the East Coast, looking to make a quick buck at the expense of homeowners -- and renters -- whose property has been destroyed.

And what about small business owners who either find their shops are flooded and they can't stay open for business or they have problems with their homes that destroys their liquidity and causes them to go bancrupt -- and all their employees lose their jobs, as a result. A major re-shuffling is about to happen.

Housing shortages -- if many of the homes are no longer tenable, and the jobs are still there -- then what does this likely do to the housing market? It suggests, to me, that short-term housing costs will spike -- dramatically. Also, for commuters to the large cities, like Philadelphia or New York, who live in areas where roads are damaged or impassable, what will that do to them?

Lots of potential problems with transportation and logistics . . . a nightmare soon to unfold.

On top of that, clean up crews, salvage crews, construction crews etc etc etc will soon be moving in to stricken areas, which will only make housing issues even more complex.

FOOD -- having no power is not the best case scenario for keeping food in the fridge . . . long-term power outages will, on some level, add to the likelihood of short-term food shortages (and a spike in food prices) -- which will be a double-whammy to many who will have to pay to replace the food they've lost as well as pay higher prices going forward.

These are just the highlights.

And there is this other, side note: I believe there will be another major storm that hits the East Coast within the next 4-6 weeks. Actually, I expect 2 more major Irene-like storms to hit between now and Halloween so I will go on record as saying there will be at least one more big ka-wham-o to "blow through" between now and October. Probably one in about 2 weeks and then another one a month later . . . but at least one.

This is an economic disaster much more than a physical disaster and even though the destruction was nowhere near what happened with Katrina, the impact may actually be greater before it's all said and done.