Some interesting perspective from floor guy Art Cashin on the reaction from investors:
Terrible Quake Hits Tokyo – As you probably know by now, around 2:00 in the afternoon, Japan was hit with an 8.4 or 8.9 earthquake. That ranks up in the super-quake category. The quake was not very far from Tokyo. One of the more remarkable facts was that Tokyo skyscrapers withstood the quake even though some were said to shake enough to make tenants seasick.
When a great tragedy strikes, floor brokers (and most other finance types) immediately go bi-polar. On the one side is the empathetic – what can I do? How can I help?
A good example was Oklahoma City. When news of the blast hit the newswires, “the hat” was instantly passed on the floor. Within 10 minutes, over $150,000 in cash was raised and a broker was instantly dispatched on the first flight out to bring the cash to Oklahoma City to “use it in the most effective way”. For years later, Oklahoma City officials sent Anniversary “thank yous”.
Yet, at the same time the hat was being passed, all the minds were working as trained. Examine each consequence and think through its impact.
This morning the thinking continues at lightening speed. Our friend, Dennis Gartman, who gets up much earlier than we (I sometimes doubt he sleeps) notes the yen firms as folks call money back home to help rebuild, etc. Oil and some commodities falter as a quake-wounded economy pauses or slows (limiting short-term demand). Re-insurers dip on fears of extensive claims.
Longer term, the quake might strain global liquidity. If Japan must borrow for large or extensive repairs, there may be fewer buyers for U.S. or European bonds. There are scores and scores of other potential consequences, but we don’t have enough space.
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