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This Time it's Different...Katrina

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By TMFRoZany
September 15, 2005

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Katrina was one of the worst natural disasters in U.S. history. We have all seen images of the path of the hurricane devastation and human suffering. The impact on millions of individuals defies description. The markets have withstood the immediate impact of the storm extremely well up to this point.

Have you figured out what makes Katrina different?
1. The storm hit an area that is critical to the nation's refining and distribution of petroleum products. Oil and gasoline shortages will be an issue. How severe was the damage to that infrastructure? How long will it take to repair those facilities? Answers are still coming in to the crippling effects of the hurricane. Good numbers given out today seem difficult to believe.

2. The displacement of a rather huge population in the New Orleans environs creates a monumental problem faced by that port city. The port provides 100,000 jobs in the New Orleans region. Displacement becomes a problem as the large port in the United States and cannot function without a city around it. So with further scrutiny it isn't so much about the oil as it is about the loss of workers. Power restoration in New Orleans (N.O.) is struggling because they cannot locate many of their workers.

Geography
Geography dictates location in the building of a metropolis. The port of New Orleans is the gateway to the Mississippi river serving 33 states. For that geographical reason N.O. was built in a terrible place, a place that is needed for existence by the United States. Katrina's effect was the complete loss of infrastructure -- water, electricity, transportation, telecommunications, etc. -- in a major city.

Nature took out New Orleans almost as surely as a nuclear strike. The ports of South Louisiana and New Orleans, which run north and south of the city, are as important today as at any point during the history of the republic. On its own merit, the Port of South Louisiana is the largest port in the United States by tonnage and the fifth-largest in the world. Louisiana port is the largest tonnage port in the U.S., handling nearly 200 million tons of commodities annually, including import petroleum products and export grain. The port also connects to six railroads; about 100 freight trains a day serve New Orleans. The port also ranks fifth in the country in terms of cruise ship traffic.

The Mississippi river provides relatively cheap barge transportation for steel, agriculture products, a hub for goods and travel. Steel is reportedly coming up with a surcharge as a result of Katrina.

Workforce
Unlike other disasters, a displaced workforce in N.O. cannot return to the region because they have no place to live, no schools for children, no hospitals for health care (healthcare workers need a place to live too), no grocery stores, no gas station, and no infrastructure let alone the probable feared contamination. Many of those who have left will have established new networks and may never return to New Orleans.

The tourism industry is trying to get hotels up and running in N.O. to house the workers needed to restore the infrastructure. Discussion includes setting aside 25% of the rooms for the hotel workers.

The arrival of the first cargo ship with containers of petrochemicals, rubber, plywood, and coffee is being supported by workers housed in a crane ship that arrived from Texas. Electricity will be needed to return the port to operational capacity.

Gary LaGrange, the ravaged port's president and CEO, says, "That ship is quite significant - more psychologically than it is from a cargo and commerce standpoint," he explained, "because it's indicative to the rest of the world. It's a message that we want to send that the Port of New Orleans is back up and we're open to business. The main issues facing the port's ability to handle cargo at the moment, he said, are "procuring labor to work the vessels; the distribution of cargoes due to highway connectors being damaged [the twin spans on the I-10 had sections lost and connectors in Orleans and Jefferson Parishes are under water] and initially used for recovery operations; and the ability of the river to receive vessels specifically at the southwest pass and the MRGO [Mississippi River Gulf Outlet]."

The port of Mississippi state obviously took a direct hit, unlike New Orleans, the east pier facilities have basically been gutted. No damage to the port of Baton Rouge.

3. It seems clear that many residents, especially the poor, will not be returning, their houses are gone, the job prospects are uncertain, and many of them are now scattered around the country and may not find it easy to move back even if they want to.

The asset of culture
That, in turn, could have a profound effect on the city's unique culture. Andrei Codrescu, the Romanian poet and novelist, now living in Baton Rouge, told The New York Times: "I am sure the city will be re-engineered, but I am afraid that in the process it will lose its soul - the people who sing the blues will be gone." This unique culture of N.O. is found deep in the black jazz music and cuisine - it's African, Caribbean, French and more.

Joanne Nigg, a sociology professor at the University of Delaware's Disaster Research Center. ``The people in New Orleans, the people along the gulf really had a culture. In many ways, they have been thrown out of the Garden of Eden.'

The city of New Orleans could become only a tourist city much like a Disneyland experience. I hope not. Time will tell what will be rebuilt.

Entertainment, good Dixieland jazz, good food, good times found at Mardi Gras and conventions are memories I cherish from the Big Easy. Yeah, I was one of those pleading for those cheezy necklaces.

The Trade Center right in the heart of Convention Center and hotels next to historic Jackson square.

4. The emotional impact is yet to come for many in the form of what is currently know as Post Traumatic Syndrome. Some families have yet to connect with each other, really heartbreaking when it is the children without a mom. The emotions of these hurricane victims must be all over the map. From sadness, to depression, to utter hopelessness. From fear, to frustration, to anger, to total rage. The sun will eventually come out for them in full, now they are held by rays of help trying to encourage hope.

Mental Health Disaster
My thoughts are with the victims of this massive storm, believe me, as I have participated as a mental health care worker in two disaster events related to tornadoes. One storm has been described as a fluke by meteorologists. Most tornadoes roar across an area at 40 or 50 miles and hour. This storm just sat on the city, spinning off seven major tornadoes and hundreds of mini-tornadoes. Those who went through that horror and recovery will never forget what it took to survive the night and rebuild the community.

The other was a tornado that covered a ten-mile swath that roared through the heart of the Omaha, NE, 2,000 homes, 120 businesses, and many public facilities were destroyed. In terms of damage, it was the most costly tornado in American history to that date. I was fortunate; it lifted less than one-half block from my house.

America, please be gentle with all those from the stricken Gulf coast, the tired, the poor, the policeman, the fireman. The majority of survivors are severely traumatized, some physically and almost all, psychologically.

What you may not be prepared to understand is the scarring of a sense of security that allows a feeling of mistrust to evolve, extreme vulnerability and anger to emerge. No bandage, quick fix for those with fractured mental health. I say this from working with those who have lost everything in a disaster not quite of the proportions of Katrina. This double deadly event not only destroyed homes with wind, it also flooded many of those homes destroying pictures and memories. No job, no home, no money for many evacuees and those who chose to leave on their own, their identity is wounded.

Coping styles that may be seen in children involve withdrawal, self-blaming, and emotional depression. Boys tend to display more violent and aggressive behaviors following a disaster, while girls show more internal symptoms such as anxiety and mood changes. Nightmares may lash out as it can for adults.

Lack of opportunity for effective action for adults coupled with uncertainty for the future make them more vulnerable to disaster-precipitated stress and depression. There will come a 'honeymoon phase' where social attachment is high that can be followed by where disillusionment expectations for recovery and support are not met. Reconstruction takes several years for emotional reinvestment to occur. Be available to listen, even a years later.

"I won't leave. . ."
Evacuation efforts in some cases are being met with resistance. Human beings are not always rational we investors have learned from John Nofsinger in terms of investing. That same behavior explains why some of those residents in N.O. are choosing to stay and not leave when it seems obvious this is not the place to remain. Using an intellectual approach for those who chose to stay will not get the job done for them to make a decision to leave. It will come from the emotional recognition of the reason the folks stayed. Fear of loss of property is real. Another factor is many are what we can regard as 'survivors.'

A bird in the hand is worth two in the bush, the home they are in is theirs, if they leave, who then will eventually take it or who will loot it in their absence? An interview on TV of a wealthy, antique filled home found the owner saying that he would not leave. His roof had been 'attacked' by fire, being there he was able to get assistance to put it out before it destroyed a neighborhood. Meeting looters at the door changed their minds about entering. At the moment, many have their need for security maintained.

Secondly, it is denial of the potential of 'a germ' attack from the water of the mosquitoes. It is denial of the time it will take to re-do infrastructure. Overconfidence exists regarding ability to survive with no additional food and water, they are betting on the come.

Efforts to restore daily life in the affected areas to a semblance of normalcy with clean up efforts will no doubt be lengthy -- and costly. That's rational but emotions are running high, the 'hold outs' have made it so far and they are sure they will make it to better times.

One on one helping if you have the chance
One of the most important things you can do for someone who's been in a disaster or other traumatic situation is to be a supportive, active listener. Remember that it takes weeks, months, and even years before a survivor of a disaster is able to put that disaster behind him or her. The type of disaster, duration, intensity, amount of destruction, and the duration of displacement can also greatly influence the lives of families. Like refugees in other countries, many will bear the scars of their experience for years, experts say. Families with no homes, no resources, nothing, starting over to rebuild what they knew.

It is heartening to find many already finding jobs and at work. It is heartening to find college students enrolled at other colleges. It is heartening to find many schools opening their doors to the displaced children.

It is also heartening to find Americans and corporations giving monetary support, even nations are contributing. It will be necessary to keep the tap flowing with donations.

A message to note
Katrina created unique factors: the human displacement of thousands of residents, its impact on U.S. energy production, the devastation of two port cities, and the disruption of a vital transportation artery, the Mississippi River. Efforts to restore daily life in the affected areas to a semblance of normalcy will no doubt be lengthy -- and costly.

Although most of my discussion focused on New Orleans, Gulfport, Mississippi experienced heavy damage, as did other parts of Mississippi, Alabama and as far as into Tennessee. We can't forget the many hurricanes force in Florida. Rarely before have so many Americans needed so much.

Human cost
The loss of life is devastating. The displacement recovery will take years, entire communities of law abiding, God-fearing folks have been devastated and uprooted from routines in their lives. The human cost will be felt for years to come as these people have lost their identification. If you have the chance, reach out with a hug, money of course is needed, but receiving something small brings huge smiles to many faces. Relief efforts to rejoin families is critical.

All of us saw parts of the devastation on television and heard it on the radio. Citizens of the U.S. are not used to witnessing the horrible conditions of human suffering of impoverished human beings, much like those in the Third World. We got a close look at poverty and the legacy of human bondage.

Economy
The arrival of coffee, wood products, steel coils and other commodities by cargo transport was seen by economists and government officials today as a positive sign that the broader economic impact of the storm and its aftermath can be kept small enough to avert a major recession or upheavals in world trade.

Municipal bonds from the U.S. Gulf Coast might be a good bet despite the destruction in that region from Hurricane Katrina, since the bonds are largely insured and their issuers are likely to be helped by an inflow of federal funds, Barron's said in its Sept. 5 edition.

The paper said about 66 percent of debt issued in Louisiana is insured, and it cited portfolio managers buying issues such as a 5.30 percent bond issued by the New Orleans school district, due in 2013, but callable in 2007.

Insurance
Losses from Hurricane Katrina are expected to be so sweeping that the nation's flood insurance program will have to ask taxpayers for money to cover the costs. Because Katrina's scope is unprecedented, the agency could be saddled with a debt four or five times greater than its net income. And if flood losses, as opposed to wind damage, are extensive, the federal government's National Flood Insurance Program could again be forced to borrow from the Treasury. Only about 40 percent of New Orleans homeowners have flood insurance.

The outlook for property/casualty insurance is that over the last decade or so, insurance rates have been rising in areas of the country vulnerable to big storms. They will continue to do so as the losses mount. Rates will not go up for people who do not live in these hurricane prone areas

Recovery
Recovery is going to take a national effort; how we chose to deal with it will forever define us as we deal with the human and infrastructure destruction of a natural disaster. As the forensic analysis of disaster intervention at local, state, and national levels is done, we will find the dynamics of social and political power in the U.S. at work.

Katrina will become a benchmark in telling the American people just how we measure up, notice I said 'we.' The revelations to be found in the evacuation process in New Orleans will be a humdinger. There is much to learn as this three legged disaster is reviewed. The first problem was the actual storm, the second the failure of the levy to hold the water, and the third was "the way the whole situation was managed." Answers are expected to the question, "Where was the disaster planning to help those poor people?" The levels of bureaucracy are monumental.

Many heroes can be noted in the struggle to save lives, mobilize relief services and supplies, and prevent additional property losses. Story after story comes to light.

Ophelia blasts in
Along the coast of the Gulf of Mexico, hurricane season runs from June to November. Seems to run up the coastline. Much smaller scale now entering the Carolinas with an entirely different landmass to encounter, still unleashing powerful forces as it moves ever so slowly.

Regards,
Ro

Selected references:
Opportunity in Katrina's wake

New Orleans: A Geopolitical Prize.

Port damage.

Signs of revival.

No job, no money.

Ports.

Flood insurance.

Reuters and bonds.


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