Maybe we should have a natural disaster more often. Stocks are higher now than a week before we ever heard of Katrina. The U.S. govt spending machine is revving up and that is what the market likes. We're going to spend another 100 billion we don't have and that means a pretty hefty boost to GDP in the short term. Destruction of wealth does not show up in GDP but replacing that destruction does. With Europe sending us some of their product reserves of oil over the next 30 days, that should keep oil prices relatively quiescent. Inventory numbers will be released Thursday and will probably show big draws so we will be able to see the price response then. Everyone is always eager to shout the good news, the bad news will dribble out.
Energy supplies will remain tight. We will remain short of refining capacity for some time to come. Oil is still $3 bucks a gallon and along with high natural gas prices will grind away at the consumer and the economy. Most of the government spending is going to security, housing, clean-up, repair etc. Relief spending does not increase productive capacity or profitability, regardless of how necessary it is.