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31 Oct 2012 08:10
A man walks by homes and businesses destroyed during Hurricane Sandy in New York City. (AFP)
While it will take weeks to count the cost, Sandy is likely to be among the most costly disasters in history and could slow down the American economy's momentum in the fourth quarter.
Wall Street was closed for two days and few US companies released results, with knock-on effects on share trading in London. The devastation is a big worry for stocks and share prices are set to take a hit if trade resumes on Wall Street on Wednesday as planned.
Insurance shares in London including Hiscox, Amlin and Catlin, which slipped on Monday, regained some ground.
Sandy left behind a trail of damage – homes underwater, trees toppled and power lines downed – while New York's subway system was flooded, the worst disaster in its 108-year history.
The US economists Gregory Daco and Nigel Gault at IHS Global Insight estimate Sandy will cause $10-billion of insured losses to infrastructure and twice as much in terms of total damages.
The superstorm has also forced 70% of the east coast's oil refineries to shut down, which will put up gasoline prices in coming days. Its commercial impact is likely to be worse than that of Irene, which hit on a Sunday, while Sandy hit the east coast on a Monday. Economic losses caused by business shutdowns and a slump in consumption could easily outweigh infrastructure damage.
Mohammad Khan, insurance partner at PricewaterhouseCoopers, estimated total economic losses from Sandy at $45-billion, taking the 1938 New England storm as a proxy, and warned of higher insurance premiums. "Will hurricane Sandy impact insurance premiums? If losses are in the range of $10-billion to $20-billion, there may be a short knock-on effect. A loss double that size is more likely to raise premiums globally, as was the case with other events such as hurricane Andrew, 9/11 and hurricane Katrina."
The $45-billion estimate pales in comparison with Hurricane Katrina, which caused $120-billion of damage in 2005, while the cost of last year's earthquake in Japan was more than $200-billion.
"The effect on growth for the fourth quarter will not be catastrophic but might still be noticeable, especially in an economy with little momentum anyway," the IHS economists said. "Suppose that the affected regions lose just 25% of their overall output for two days that is not recoverable later. That would knock about $25-billion annualised ($6-billion actual) off GDP, and could take as much as 0.6 percentage points off the annualised fourth-quarter real GDP growth rate."
The economics consultancy Capital Economics reckons Sandy's economic impact is likely to be small in the long run because the effects of the infrastructure damage and power outages will be offset to some extent by the massive clean-up that will follow. Paul Ashworth, the chief US economist, said the impact could be quite large initially because the 12 affected states account for nearly a quarter of national GDP, with the New York area alone accounting for a tenth.
If all output was lost for two days, the economic loss would be about 0.7% for the fourth quarter – but this would be largely offset by the resulting clean-up. The overall impact on GDP growth could even be positive, he said, as households and businesses sweep up the damage.
The credit ratings agency Fitch said losses related to Sandy would be largely borne by primary insurers such as State Farm, Allstate, Liberty Mutual Group and Travelers. Christopher Grimes, senior director of insurance, said losses were likely to be similar to Hurricane Irene, which cost insurers $4-billion to 5-billion.
Evoking harrowing memories of Hurricane Katrina, 300 patients were evacuated floor by floor from a premier hospital that lost generator power at the height of superstorm Sandy.
Rescuers and staff at New York University Langone Medical Centre, some making 10 to 15 trips down darkened stairwells, began their mission on Monday night, the youngest and sickest first, finishing about 15 hours later.
Among the first out were 20 babies in neonatal intensive care, some on battery-powered respirators.
"Everyone here is a hero," Dr Bernard Birnbaum, a senior vice president at Tisch Hospital, the flagship at the NYU medical complex, told exhausted crews as he released all but essential employees late Tuesday morning. "Thank you, thank you, thank you."
More than two dozen ambulances from around the city lined up around the lower Manhattan block near the East River to transport the sick to Mount Sinai Hospital, the Memorial Sloan-Kettering Cancer Centre, St Luke's Hospital, New York Presbyterian/Weill Cornell Medical Centre and Long Island Jewish Hospital.
Margaret Chu (36) of Manhattan, gave birth to a son, Cole, shortly before noon on Monday.
"Then, a couple of hours later, things got a little hairy. The electricity started to flicker and the windows got shaky," she said from LIJ's Lenox Hill, where she was transported after backup generators failed and NYU was plunged into darkness.
Chu, accompanied by husband Gregory Prata, was able to walk 13 flights into a waiting ambulance with help from staff and first responders lighting the way by flashlight. She said other women who had given birth during the storm were carried down on sleigh-like gurneys.
"Everybody was pretty calm. I would call it organised chaos," she said.
'A lot of crying'
Meanwhile, other New York hospitals cancelled outpatient appointments and elective surgeries. And several closed and evacuated patients, including New York Downtown Hospital, a Manhattan campus of the VA New York Harbour Healthcare System and other NYU-affiliated facilities. Coney Island Hospital was evacuating on Tuesday afternoon.
Mayor Michael Bloomberg was clearly angry about the NYU Medical Centre crisis when he addressed reporters late on Monday, saying hospital officials had assured the city they had working backup power.
Last year, NYU evacuated in advance of Hurricane Irene on the order of city officials, spokesperson Allison Clair said. "This year we were not told to evacuate by the city."
Without power, there are no elevators so patients – some of whom were being treated for cancer and other serious illnesses – were carefully carried down staircases. As the evacuation began, gusts of wind blew their blankets while nurses and other staff huddled around the sick on gurneys, some holding IVs and other equipment.
Luz Martinez (42) of Roosevelt Island off midtown Manhattan in the East River, was home recuperating from a caesarean section when she got her first inkling that her three-week-old daughter was being transferred out of NYU's neonatal intensive care unit.
The baby, Emma, had been born prematurely. Martinez had been calling the hospital for regular updates but at one point Monday night, the phones were busy every time she called. Then she heard Bloomberg on television talking about the evacuation and soon after lost power at home.
"I went crazy. I wanted to come to the hospital," Martinez said.
She and her husband hopped in the car but could find no way into Manhattan because of storm damage and bridge closings. That's when NYU called her on her cellphone to say Emma was being taken to Mount Sinai.
But the terrified parents couldn't get there, either. They called Mount Sinai through the wee hours for regular updates and finally reached their baby around noon on Tuesday.
"It was a nightmare," Martinez said by phone. "I've been doing a lot of crying."
Emma is doing fine. Martinez praised the staff at both hospitals. "They all handled everything as smoothly as they could," she said.
NYU sent home about 100 of its 400 patients earlier on Monday to lighten its load, starting the evacuation of the remaining 300 patients at about 7:30pm when backup generators began to fail, Clair said. There were no injuries during relocation.
The scene was reminiscent of hospital evacuations in New Orleans after Katrina, with patients being carried down stairs on stretchers because elevators were out, and nurses squeezing oxygen bags for them because of lack of power to run breathing machines.
The difference is that in New Orleans, patients were trapped in flooded hospitals; in New York, dozens of ambulances could get through to move patients to safety.
The hospital blamed the severity of Sandy and the higher-than-expected storm surge that flooded its basement but had little else to say beyond a short statement emailed to reporters after the evacuation was complete.
"At this time, we are focusing on assessing the full extent of the storm's impact on all of our patient care, research and education facilities," the statement said.
Most of the power outages in lower Manhattan, where the NYU hospital complex is located, were due to an explosion at an electrical substation, Consolidated Edison said. It wasn't clear whether flooding or flying debris caused the explosion, said John Miksad, senior vice president for electric operations at Con Edison.
At NYU, sporadic telephone service made it difficult for the hospital to notify relatives where patients were taken. It relied instead on receiving hospitals to notify families.
Until the generators failed, Chu considered herself and her new baby out of harm's way. By the time she was evacuated, the streets were eerily silent and the night sky lit up by emergency lights of waiting ambulances.
"My son will appreciate this someday," she said. – © Guardian News and Media 2012, Sapa-AP
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