Economic Impact of Hurricane Sandy

With the amount of destruction it caused, Hurricane Sandy is undoubtedly one of the costliest hurricanes to have ever hit the United States. However, it is being speculated that its impact on the U.S. economy will be short-lived, and eventually it will end up doing more good to the economy than causing any harm.
On 29th October, 2012, the New York Stock Exchange (NYSE) officials decided to shut down the exchange for a full of 2 days in the wake of Hurricane Sandy. The last time something like this happened was way back in 1888, when insane snowfall resulted in NYSE being shut down on the 12th and 13th of March (the Great Blizzard of 1888).

Hurricane Sandy has been one of the most devastating hurricanes of the recent times. It affected more than 20 states, right from New England to Florida, in some way or the other. The state of New Jersey, where this 'superstorm' made its landfall, was one of the worst-affected places. Subways and tunnels were submerged, thousands of flights were canceled, power outage left millions in dark... in short, the entire East Coast was brought to a standstill by this hurricane. Overall, Hurricane Sandy had a greater impact as it was huge (in fact, the largest Atlantic hurricane on record), it affected the most populous region of the U.S., and lastly, it hit on weekdays (Monday and Tuesday). Image Courtesy: NASA GOES Project

The Economics of Hurricane Sandy
While the researchers estimate a loss of $20-$50 billion, they do agree that the impact of such events on the economy cannot be gauged in such a short time. A large part of the estimated loss is attributed to property loss (both insured and uninsured) and lost business days - with airlines, retail, trade and transport... virtually every business sector having to bear the brunt of this hurricane. It also resulted in immense damage to the public infrastructure - flooding transport facilities, damaging transformers and power lines. While conservative estimates put the total loss at $15-$20 billion, some sources put it at a whopping $50 billion.

The economic research team of Barclays puts the total financial loss caused by Hurricane Sandy at $30-$50 billion, which is more than what was caused by Hurricane Irene, but less than what was caused by Hurricane Katrina. The catastrophe risk modeling firm, Eqecat, had initially estimated a loss of $10-$20 billion, but their revised estimates hint at a loss of around $50 billion. This loss was largely a result of lost business due to power outage and damage caused to public infrastructure. With an estimated loss of $50 billion, Hurricane Sandy was the second most costliest hurricane in the United States' history.

New York was the most affected city; and, according to Eqecat, accounted to 34 percent of the total loss suffered by the nation. If the estimates put forth by Moody's Analytics are to be believed, the loss caused by Hurricane Sandy in the city of New York alone accounted to $12 million.

Temporary Rise in Gas Price
In the wake of Hurricane Sandy, the oil refineries on the East Coast remained closed for some time as a result of which gasoline supply was hampered. Even the transportation of fuel from refineries to the service stations was affected as the transport network was recovering from the impact of this hurricane. The resultant shortage of fuel caused the gasoline prices to rise in New Jersey, New York, etc. On the brighter side, this price rise is only expected to last for a few days as Hurricane Sandy only affected the refineries; and not the drilling sites as in case of Hurricane Isaac.

GDP Decline and Positives of Rebuilding
Except for a slight decline in the GDP growth, which was of 2 percent in the third quarter, no other notable changes are expected in the last quarter. However, a drop in the economic activity for the month of November is well on the cards as it will take some time to get the damaged facilities back on track. On a positive note, it is expected to make consumers and the Federal government spend more, and much of this expenditure will go into rebuilding, thus providing a much-needed boost to the economy. More importantly, the $500 billion collected in the form of insurance premiums last year will now be injected in the economy in the form of payouts.

Second Term for President Barack Obama
The damage caused by Hurricane Katrina in 2005 had put the Bush government under scanner for its inefficient handling of crisis, and had virtually marked the beginning of its decline. In contrast, Hurricane Sandy seems to have provided a new lease of life for the Obama government. President Barack Obama's handling of this crisis was praised by everybody, and the same might have just given the democrats that much-needed edge. With President Obama securing another term, it is highly unlikely that we will get to see any major changes in the economic policies.

Speaking purely of economics, any loss that occurs because of natural disasters is unintentionally made up for in the subsequent weeks with people and administration injecting money in the economy on the pretext of rebuilding. It wouldn't be much different this time around, as the financial loss incurred by Hurricane Sandy will be offset by recovery efforts.

Ways to Increase Productivity at Work

Stop bringing work home with you - get it done between nine and five with these productivity boosters.

We’ve all had days where it seemed like there just weren’t enough hours. Too much to do, not enough time to do it in - it’s a common complaint. If you find that most of your days are like that, it’s time to brush up on your time management skills.

Since the beginning of the recession, when companies laid off massive numbers of employees, the remaining (lucky?) few have had to shoulder the burden of their own workload plus the workload of the pink-slipped. Companies are expecting to do more with less, and dismissing those who can't handle it. The good news is, it can be done. Usually.

Stop Multitasking
When you're crunched for time, doing multiple things at once is the natural response - but it won't save you time, really. It may even slow you down. You'll be more productive if you focus on one task at a time, moving steadily through the pile of TPS reports on your desk.

The human brain just isn't built to section itself off, so when you try to do too much at once, you do it all poorly. It also takes longer, because as your attention turns from assignment to assignment, it takes you a second to get back into the "groove" of each piece. The result is a mediocre pile of barely completed tasks that took you way too long to do.

If you do things one at a time, you're able to ride the groove from beginning to end, devoting your full attention to each project in turn. If you move from one to the next without getting distracted, you may be surprised how quickly - and well - things get done.

Prioritize
This one's easy. Everyone knows to do the most important thing first, but how often do you really do it? Is checking into Facebook really the most important thing you need to do today? So why is it the first thing you do when you sit down at your desk?

Plan your work day according to what's due when, and how long it will take you to do. Aim to get things done ahead of schedule, so you have a built-in time cushion for when emergencies arise.

Deal with Things
The easiest way to explain this productivity rule is as follows: When you check your mail, do you just drop it on the table and go about your day, planning on going through it later? Stop it. When you bring the mail in, go through it immediately. Ditch the junk, stack catalogs on the coffee table, in the bathroom, or wherever you'll look through them. Open bills and write out the check, stamp it, seal it, and put it back in the mailbox. Get it? Deal with things. Approach your whole day this way, and you're less likely to have a stack of work waiting for you at the end of the day.

Set Alarms
Of course you wake up to an alarm, and you probably set alarms for important meetings and such. But using alarms to time your work tasks can keep you on track all day. Knowing you have a finite amount of time to get things done forces you to concentrate, and makes you less likely to end up browsing YouTube instead of working on that expense sheet.

The thing is, you have to stick to your alarm. When it goes off, move on to another task. Don't just ignore it, because then you lose the entire benefit of the mini-deadlines it creates.

Take Care of Yourself
If your body isn't running at its optimum level, your productivity will never reach its full potential. Get enough sleep, eat healthy foods, and exercise every day. Oh, and those productivity tricks we just talked about? Take one day a week and throw them out the window. This should be a day you don't have to work (obviously), so just do what you feel like doing when you feel like doing it. Schedule nothing. Don't look at a clock. Nap in the sun, curl up with a book, play tag with your kids. Whatever you do to recharge, do it.

Come Monday morning, you'll be refreshed and ready to go. Blazing your way through the mountain on your desk, you'll be done by happy hour.

Importance of Product Packaging in Marketing

In the highly competitive world of retail marketing, one can never stress enough on the important role that product packaging plays. Although the quality of the product will ultimately determine sales, interesting packaging certainly gives your product that initial edge...

The flashy orange of Hermès, the legendary aqua blue of Tiffany & Co. or the deep red that defines Cartier packaging elicits sighs even before one opens them to discover the plush contents they carry. The containers of these iconic brands have their devoted section of fans who, believe it or not, even source them from online auctions, knowing that they can't afford the expense of actually buying something luxe in order to obtain those coveted boxes. I'm aware that this might sound completely far-fetched to those who view the concept of packaging with nonchalance, but marketing experts are sure to tell you otherwise.

Unlike advertising, where you'd have to scream from the rooftops to get the consumer's attention, innovative packaging just sends out sublimely effective pick-me-up signals that are irresistible even to the hardest of cynics. You could also call it a final sales pitch, especially because it is common knowledge that emotions play a massive role when it comes to buying. Therefore, it isn't a coincidence when brands with the highest recall value (Nike, Apple, Coca-Cola) are those who invariably invest a great amount of thought behind their packaging.

Brand Association
As a consumer, entering a supermarket and finding endless aisles of similar brands can be assaulting to the senses. What do you think happens next? The vast array of goodies on display compels the consumer to remember and associate a certain kind of package with the brand of their choice. Recognizable brands have a definite edge, no doubt, but think... who will possibly pick up a Coke that's packaged in a steel-gray can with black lettering instead of the regular, flashy red and white? Innovative packaging, with the company logo emblazoned across it makes an established brand stand-out. A perfectly legal attention-grabbing tactic, it tests the consumer's loyalty to the brand and reinstates a recognized brand's presence.

Simply Outshine!
There is no denying that we humans are a judgmental lot, and we take great pleasure in creating preconceived notions based on appearances. As a seller, it would be a crime not to cash in on a golden opportunity like this one. Have you ever wondered why a Barbie doll always comes in a pink box? Or that men's deodorants are mostly packaged in black cans? Science does have a role to play here, but the simple explanation is that companies stereotype, and customers willingly succumb. You see, there is a reason why Tiffany & Co. use that special aqua blue box with a white ribbon to pack their jewelry in, and Nike made that special stadium shoe box for football crazy kids.

Practicality Scores
Product packaging is not limited to appearances, mind you. It goes beyond wrappers and ribbons when it comes to certain wares, perishable commodities in particular. In such cases, freshness rates above everything else and packaging standards must comply. The USFDA has specific rules regarding packaging of edible products, and manufacturers have to adhere to those. Having said that, sellers need not necessarily shed their creativity to accommodate practicality, (there are some very funky juice cartons which prove my point).

Go Green!
Environment friendly packaging never fails to impress, moreover, it helps you establish an image that is austere and conscientious. Reusable, environment friendly containers are usually a big hit with the consumers who will appreciate your concern for planet Earth. Green initiatives spruce up a company's image in no time, and as a brand, you end up doing your bit towards undoing environmental damage to some degree. It is also the need of the future, as most governments are more or less likely to enforce strict rules regarding usage of environment friendly packaging.

Bait the Customer
When it comes to luring customers, nothing does the job better than the manner of packaging. Shopping is a multi-sensory experience and manufacturers must view it that way. New products looking at making a breakthrough can edge out complacent competitors solely on the basis of attractive packaging. With certain products like cosmetics, customers appreciate the company's attention to aesthetics. Be it gourmet chocolates or garbage bags, beautiful packaging matters, and it is sure to give you results.

Don't Get Too Excited
It's time to curb the enthusiasm a bit, because it is very easy to get carried away with creativity. Packaging, ultimately, has but one aim - to get the consumer to buy the product in question. It is not an avenue for product designers to showcase their creativity by thoroughly neglecting the primary purpose which is product sales. Designers have to possess the sensibility to refrain themselves from viewing product design as a contest. After all, a good product package is the one that sets the cash register ringing.

To sum it up, product packaging is serious business, and it calls for attention. As a manufacturer, you need it to be adequately enticing without making it ridiculously over the top. Though it's hard not to cross the fine line that separates the swishy from the trashy, it's totally worth the effort once you get it right.

Financial Capital of the World: New York or London?

London and New York are two of the busiest centers for international trade and commerce. These cities have the infrastructure, government support, and a skilled workforce to play host to some of the biggest financial institutions of the world. In this article, we will try to know which of these cities has a better claim to be called the world's financial capital...

An article published in New York Times a couple of months ago went by the title, 'London is eating New York's Lunch.' The article went on to explain how London was fast becoming the financial center of the world. It wasn't as if this article was revealing anything breathtakingly sensational; a report by McKinsey in 2007 had warned the then Mayor of New York, Michael Bloomberg, that London was treading on its way to become the global capital of the world. Today, there is a wide consensus among analysts that London has the upper hand over New York when it comes to being the global financial center of the world. Beijing, Tokyo, and Shanghai - the other economically powerful cities of the world may need another couple of decades before they can be considered as serious contenders for the title.

London has traditionally been the global capital of the world. It was the city which controlled half the world in the imperial days. It was the place of inventions and innovations, and the famous Industrial Revolution. In short, London was an economic powerhouse until Britain took part in the First World War. In the ensuing period of 1914 to 1945, which saw the world fight two wars, Britain's economy weakened, and London lost its premiership to New York. But, in the early 1980s, it worked in the right direction steadily to once again become one of the preferred destinations for trade and finance.

New York, on the other hand, emerged on the global scene notably after World War II. From thereon, Moscow rivaled New York for a bit, but it would be apt to say that the Cold War era was more about America Vs the Soviet than New York Vs Moscow. After the disintegration of the Soviet Union, America became the lone superpower of the world, and New York went on to reap the benefits of this new-found status. But, over the last decade or so, New York has had to face stiff challenges from other global cities of the world, and London has emerged as a credible alternate for foreign investors.

Financial Powerhouse - London or New York?

If we go by recent reports, the news isn't all that great for New Yorkers. A city which was once unanimously the preferred choice for banking and investment companies, now finds itself competing with London in wooing foreign investors. Companies are listing themselves up on London Stock Exchange, taking a lion's share away from the New York Stock Exchange, and hedge fund investors and oil-rich Sheikhs from the Middle East are giving JFK a miss by descending upon proximal Heathrow for investment and partnerships.

The World Economic Forum's Financial Development Index named London as the world's top financial center in 2009. The city outdid 55 other countries to claim the top spot. In 2011, UK had dropped to be placed second after Hong Kong. The index takes into account the financial structure and gains on a yearly basis, something which fluctuates with economies over a period of time. In the longer run, London still is the preferred destination for conducting business, something which has been substantiated by the Global Financial Centers Index. The study observed that London is ahead of other rival cities on the basis of 'regulation, tax and lifestyle'.

Analysts point out that London is gaining on New York because of several factors. First, there is a widespread perception that regulatory scrutiny is more stringent in New York vis-a-vis London. The post-Enron economic structure definitely calls for a tighter regulation, but, it also ends up putting potential investors off. Second is the growing economic might of the Asian and Middle East countries. Hong Kong, Beijing, Mumbai, and Tokyo are some cities who have started to have a say in world economics, and being geographically closer to these economic centers helps London in grabbing deals which otherwise might have gone to New York.

Summing up, London is at the top of the table right now, be it financial exports or revenue generation from its financial institutions. It leads the international bank lending, and issues the largest number of international bonds, year in and year out. The volume of global currency traded is the highest in London with an approximate 35% market share. London has the most number of foreign banks and 65% of Fortune 500 companies are based in London. These statistics tilt the balance in its favor. New York City is not too far behind, and there is every possibility of a shift in paradigm in the years to come.

Pros and Cons of Mobile Banking

The findings of a latest survey show that Mobile devices account for nearly 25% of visits to a bank website. The reason is simply the convenience and portability that the cell phone offers. But this comfort comes with a price. Given below are the pros and cons of mobile banking that you must know before accessing your account from your mobile phone.

According to a new database released by the World Bank in April this year, nearly 2.5 billion people, almost one half of the adult population around the world, don't have any formal access to our complex financial system, let alone, its simplest format - the banking system. This leaves a major fraction of the poor population dependent on private money lenders, who charge very high interest rates contributing to the vicious cycle of exploitation and poverty. Moreover, financial exclusion of a major part of the world population has also occurred because of several other reasons that include, poor bank infrastructure, long travel distance to banks and the amount of paperwork required to open a bank account. These glaring issues have been now realized by financial institutions. The central banks of almost all developing countries are pushing reforms on a mammoth scale to bank the unbanked poor and in this massive endeavor, technology is turning out to be their greatest hope.

The most famous among all the measures adopted to bank nearly half of the unbanked adult population is mobile banking. The surge of optimism surrounding this latest technology that has the immense potential to alleviate billions of people from poverty, has been fueled by the exponential increase in the number of mobile subscribers all across the globe, with developing economies like India and China, leading the way. To just give you a perspective, Cisco's recently published "Visual Networking Index (VNI) Global Mobile Data Traffic Forecast Update" stated that by the end of 2012, the number of mobile devices in the world will exceed the World's population! If all goes well, it may be possible for mobile banking to transform the world's financial landscape and redefine the relations of banks and its consumers, not only in developing countries but also in the developed ones. While we look forward to mobile banking revolution shape our lives, we need to understand both sides of the coin, to get a larger perspective. Here we analyze what's so perfect about this form of banking and what's the issue we may encounter in its execution.

Benefits of Mobile Banking

There are a lot of benefits of banking using mobile phones. The obvious is that this is a time saving, no-queue method of banking wherein almost all banking related services can be accessed through the mobile. It also offers services like ATM locator, remote deposits as well as mobile payments to the users. The biggest boost to this technology is the availability of smartphones that have simply made our lives easier.
The mobile banking service offered by almost all banks is free of cost. This means that the customer can handle hassle-free transactions without extra charges.
There are three ways in which the services can be accessed from the mobile depending upon the cell phone compatibility and its make. This makes mobile banking available for everyone. The first one is through SMS wherein the balance information and banking passwords are sent to the user via SMS. Secondly, some banks have dedicated software applications that can be downloaded on the mobile for accessing the bank account. Thirdly, the mobiles that have Internet browser facility can access the banking applications easily like a computer.
The bank servers are encrypted for wireless transactions. This means that this mode of transaction may actually be better secured than transactions through wired connections.
The account information along with the account number is not displayed on the wireless connection. This helps more towards data security.
Risks of Mobile Banking

As with any new technology, the mobile banking too, has its disadvantages. Listed below are the major ones.
The biggest security risk in mobile banking is the non-encrypted servers of cell phone service providers. This makes it relatively very easy for an expert hacker to obtain account information or debit and credit card information of the users.
The messages that are received from the banks are not encrypted. This means that, that information could easily have been breached while being transmitted through mobile carrier.
If the mobile gets stolen, the information stored in messages can be used easily by another person.
Mobile phones that use Internet browser but do not have an antivirus are at a very high risk of getting hacked for sensitive information.
With the increased usage of smartphones and accessibility to high-speed Internet on cell phone, mobile banking was the obvious next technological step. Without any doubt, it provides the comfort and hassle-free account accessibility. But as far as information security is concerned, it definitely leaves much to be desired. If you ask me, unless banks come up with a 100% secure way of mobile banking, it is best to use mobile banking only when absolutely necessary.

Market Analysis for Small Business

The market analysis is the most intimidating part of writing a business plan, but it’s the part that has the most potential to get your business off to a strong start and adjust to a changing marketplace down the road. You get out what you put in, so make it thorough.
When you’re starting a business, it’s important to take a good, hard look at the market you are trying to enter. This helps you plan your approach to marketing, pricing and general operations, and as such, should be included in your business plan. Once your business is established, periodically re-analyzing the environment in your industry can help you adapt your business to changing attitudes, economies and regulations, and help you sidestep potential roadblocks.

Although the term "market analysis" sounds technical and intimidating, it’s rather simple, if involved. You don’t need an M.B.A. to do this. It’s all about examining your industry, target demographic, pricing structure and competition.

» Industry

Research your industry. Find out how it’s been doing, and where it’s going. Has it dropped off recently? Is it due to economics or new regulations? Is it projected to resume its previous levels? In how long? Is it growing, or is it stable? Get a feel for the difference between steady and stagnant - one is characterized by slow but steady growth, the other by inactivity. Find out if your industry is changing - if everyone else seems to be branching off into niche markets, positioning yourself as an all-around provider may not be the best idea.

» Target Demographic

Who is your ideal customer? Know everything about them. Know who they are, where they live, how much money they have and how much money they spend. The Census is handy for this. If your business is locally-based, it behooves you to know how much of your target demographic leaves the area every year, and how many move in. Once you know the facts, start looking into the intangibles. What do they like? What do they buy? What level of customer service do they expect?

Once you know your target market inside and out, explore other potential markets - they may not be your main source of revenue, but they could prove valuable down the road when you’re trying to eke out every last drop of profit to fund expansion.

» Pricing Structure

In your business plan, you’ll have to justify your prices - your market analysis helps with that. Look at your production costs, overhead, labor, etc., but don’t stop there - look around and see how much everyone else is charging, but focus on those who serve your target market. Does perceived value play a role in your industry? What else affects sales, price-wise? Do you plan to offer discounts? How will that affect your bottom line? How deep will the discounts be, and will they more than make up for themselves by effectively driving sales?

You can’t set your prices arbitrarily. If you plan to charge substantially more than everyone else, what about your product or service makes it worthwhile to the customer?

» Competition

Finally, analyze your competition. Ideally, you will look at what the competition is doing throughout your market analysis, but here is where you put it all together. What makes you think your business will be superior to them? Where are they failing the market? How do you plan to fill that gap? Become intimate with the way your main competition does things - you might learn something, even if it’s what not to do.

Your market analysis can go as deep as you want it to - the deeper, the better. Be prepared to rethink some of your ideas as you find out what’s going on out there. Your business may look great in your head, but it has to survive in a real economy.

Cottage Industry Laws

Cottage industries are tiny businesses with tons of regulations for the newbie. Research first to avoid regret.

So you knit an awesome afghan/bake a great cake/whittle a beautiful headboard. Wanna start a business? Sure! Do what you love, and you’ll never work a day again in your life, right? But starting a business requires money. Which you don’t have. Or you wouldn’t need to start a business.

There exists, in the good ol’ U.S. of A., a business type called a 'cottage industry'. It’s basically a sole-proprietorship that you run out of your home. Sounds perfect, right? Let’s roll! I’ll start today!

Not so fast. Business in this country is regulated, heavily in some cases. There is a set of laws involving cottage industries, and pleading ignorance will not keep you from being heavily fined or shut down if you’re found in violation. Laws vary from place to place, so check your state, county and city websites for the particulars. But the most common issues concern what you make and where you make it.

Your Home
As mentioned, cottage industries are run from the home. But that’s not all there is to it. First, you have to check with the city to make sure your home is zoned for cottage industry (which is entirely separate from being zoned for business or residential use). Then, you have to check with your neighborhood association to make sure they’ll allow signage, the expected traffic, and everything else that comes along with business.

Will customers come to your home? Better have ample parking. Many places require that no more than 25 percent of your home’s square footage may be used for business purposes. Plan on selling food? Your kitchen usually has to be separated from the rest of the house and kept in Health Department-approved cleanliness.

Licensing
Depending upon where you live, you may have to get a business license for your cottage industry. At the very least, you’ll have to register a fictitious name, unless you are doing business under your full, legal name. Even if local laws don’t require a business license, some other sales outlets do - many trade shows, fairs and green markets require your business to be fully registered before you can purchase a booth.

Don’t forget insurance! Liability insurance is a biggie. If customers will be coming to your home, speak to your home insurance rep to be sure you’re still covered.

Your Process
If you are producing food, you need to run your home kitchen like a professional kitchen. That means that Fluffy and Fido are no longer allowed in, and anyone who even stands near a prep area must wear a hair covering. In some places, you may even need to install special equipment (like the triple sink) that is used ONLY for your business, not family-related cooking.

Even if you’re not producing food, you may need additional equipment or permits if you use hazardous materials in the construction of your product - and we’re not talking uranium, here. Spray paint? Spray booth. Smelly glue? Vent hood. Welding? Not in this neighborhood, buddy.

Your Product
If you’re producing non-hazardous, non-food items, you’re probably okay. But bakers beware - there’s a whole mess of laws that govern what foods can and cannot be sold from a cottage industry. Baked goods are generally okay, as long as they don’t contain dairy as the main ingredient. Jams and jellies are usually fine, but not if they’re canned - home canning requires a whole other set of permits and inspections, and usually requires special equipment to ensure sterility.

Suddenly, starting your itty-bitty business just got intimidating. And if you become moderately successful, cottage industry laws will no longer apply - that’s right, after all this work, if you make over a certain dollar amount in sales, you qualify as a 'real' business and must redo the entire licensing/insuring/equipping process over again to a new set of rules. Oh yeah, and you have to find an appropriately-zoned place to do it, too, because you can no longer use your house.

That said, don’t let the legal stuff scare you. Invest a bit of money to hire a CPA who knows cottage industry law - it’s worth it in the long run. And when you finally do succeed in launching your afghan/cake/furniture empire, it’s the best feeling in the world.