How the Gulf Oil Catastrophe Brought Upon a True Black Swan

"Black Swan" Covered in OilEven before the economic bubble started to burst in 2005, I frequently talked about Black Swan events (Haiti, Transcript and Video from Presentation back in November of 2008) You know the kind of low probability events that have a huge impact on the economy.

Examples are Hurricane Katrina, the Haiti and Chilean earthquakes and, of course, the devastating Gulf Oil catastrophe. Who could have imagined an underground oil well would explode and the government would not have a logistical safety plan in place. Now we watch each day helplessly as the oil destroys our beaches, marine ecosystem — and our way of life.

It is always events that just come out of nowhere that shock our senses. This oil deluge is no different except it is happening in slow motion over weeks and months instead of minutes or seconds. Each day tens of thousands of gallons of oil are fowling our shorelines and animal life. Fisherman and those in the marine industry are feeling the effects first, but so are the folks in the hospitality business.

Many small businesses will be put out of business, and there will be a new round of mortgage defaults by those that have lost their livelihoods due to this crisis. Individuals generally involved in tourism in the bordering Gulf States will be most affected.

Economists are suggesting that along the Florida Panhandle alone 195,000 people may lose their livelihoods. Not just their jobs! Those fishermen who only know how to fish as a livelihood face a huge problem since the fishing industry as a whole is at risk. Estimates suggest the losses to the Florida Panhandle alone could top $10 Billion!

So just when we thought maybe we had hit rock bottom in the real estate market, one can only imagine the number of new foreclosures we will see crashing ashore in the coming months courtesy of BP, its contractors, subcontractors and the latest Black Swan.

From the Trenches,

Roy Oppenheim

Tags: black swan, black swan event, BP, Florida Panhandle, foreclosures, mortgage defaults, oil spill, oil spill economy, Real Estate, Roy Oppenheim

One response to “How the Gulf Oil Catastrophe Brought Upon a True Black Swan”

  1. Al says:

    BP’s CEO sold a record number of his stock options 1 week before the well burst. Then, he kept selling. Goldman Sachs got rid of over 40% of its BP stock holdings 3 days before the well burst. Obama is using the situation to push his Carbon Tax bill, “for the environment.” I know, I know… you are programmed to think that’s simply paranoid, and the Bilderberg meetings still don’t exist -even though the LONDON TIMES reported their annual meeting, last week, in Spain, together with hundreds of European newspapers- the Trilateral Commission is a figment of conspiracy theorists’ imagination, the Council on Foreign Relations is all about Angelina Jollie’s exotic children adoption shopping spree and they don’t dictate policy, the Central banks are good for you, the Federal reserve is a government entity and not a private banks’ cartel, printing another quadrillion dollars will solve everything, GMO foods are the way to go and they are good for you, sodium fluoride is a miracle to keep your teeth in your mouth and they should put more in your water -“mmm, mmm, good,” mercury increases your brain functions, vaccines are not linked to autism, aspartame is a sweet, harmless miracle to fight obesity, Wall Street is great, it is a “great buying opportunity now,” we are out of the recession and job numbers are awesome, Bin Laden has been hiding in Iran for 5 years, and our badass in chief is going to kick somebody’s ass, change everything for the better and save us all from our selfish selves. Geez, I don’t know what’s wrong with me. I just be ignorant doing all that reading or something. When you put it that way, it must be true. I’ve changed my perspective with such great insight into my paranoid delusions. I’m a new born non-recalcitrant fluoridated android now, and the future’s so bright, I gotta wear shades.
    lol, sorry Roy, I’m just overall disgusted and when you brought up the black swan spill simile it sort of took me over the edge for a second. This too shall pass, right?