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Japan is in the third phase of its devastating crisis. Nonstop media attention and speculation ensures that reports and images of the disaster are never far from our faces. As is always the problem, however, we have quickly reached a point of data overflow, which fosters tension and panic around the world. In contrast to these reactions, the Japanese continue to demonstrate tremendous character in dealing with today’s tragedies and tomorrow’s uncertainties.
If one steps back for a moment, one can liken the media saturation accompanying this disaster to our experience in the aftermath of Hurricane Katrina when levees failed to hold back the flood waters in New Orleans that suddenly found the city underwater. Can you remember the news media we were all glued to—the horrors experienced by the city’s population, the rescues, the setting up of a sports arena and the trailer camps for the people? Different, yet similar in many ways.
The suggestions by many financial advisors, media personnel and high level economists at that time were that the events at hand would ripple across the entire country creating a national recession with much of the country being cut-off from fuel as we faced a potential energy crisis from the damaged refineries in that area. In hindsight, much of the anticipated results from the damage never occurred, but we lived with it for as long as the media could sell the stories.
This isn’t to say that we have seen the ending to the story at hand in Japan or that the last chapter in the current episode is known. However, this article from the Bloomberg Businessweek, “The Japan Earthquake: The Cataclysm This Time,“ does an excellent job of breaking down the three crises, giving a quick assessment of the present dangers and identifying those who have transcended their way through historic crises with the perseverance to rebuild their lives and make survival even an stronger part of their future.
For investors, these things are good to know; to recall that the Phoenix does often rise from the ashes of disaster and opportunities are created out of crisis. In another light, the supporting evidence for this may just be the activity in the market where investors are sending stock prices back up shortly after they fall. We think you may find this article insightful.
~Mark Gaskill, Chief Investment Officer
~Julie Bryan CFA, Director of Research
