Lisa Mullins: While all of us are focused on the damage Sandy is causing here in the U.S., the Caribbean is already dealing with the storm's aftermath. More than 60 people were killed in the region as the hurricane downed trees and unleashed flash floods in several countries. Roads were washed out in Jamaica, homes were destroyed in Cuba, and landslides were triggered in the Dominican Republic. But Haiti was the hardest hit by Sandy in the Caribbean, 51 people were killed there. The country, still devastated after the 2010 earthquake, was battered by uninterrupted rain and high winds for three straight days. And, there is another storm causing widespread damage and deaths in Asia. Typhoon Son-Tinh made landfall in northern Vietnam today, two people were killed. Before it became a typhoon, Son-Tinh swept through the Philippines. It triggered flash floods and landslides that killed 27 people. Son-Tinh has now been downgraded, though, to a tropical storm, again, as it heads into southern China. Meanwhile, Sandy is still a hurricane. As we mentioned earlier, Wall Street shut down today because of the storm. It's the first time since the 9/11 terrorist attacks that the New York Stock Exchange is shuttered in a crisis. Andrew Hilton is with the Centre for the Study of Financial Innovation in London. We asked him about today's Wall Street closure.
Andrew Hilton: Well, it's certainly not unique. It has happened before. It's happened in certain circumstances where you've had terrorist outages, obviously, it's also happened if you've had extreme weather conditions. But it's most unusual that it should take place at this time of the year for something that hasn't actually happened yet. To close the markets in advance of the storm and to suggest that they're going to be closed for two days is extremely unusual.
Mullins: It's unusual, but does that mean it has any more impact than if it happened at any other time with more notice?
Hilton: I think it does, yes. The markets nowadays trade around the world. It's a 24-hour business, seven days a week, really, and to take New York out for a day or for two days means that there's a sort of discontinuity. You don't quite know where prices are going to reopen when the market opens again, and people, they'll have to look for a shock when the market opens. If indeed stocks have been trading in other markets and they've gone up or down, that will be magnified because New York was closed for two days.
Mullins: So, who benefits and who loses, in terms of perhaps, industries, fields that are affected, and even other markets that are affected?
Hilton: Well, I think that competitors to New York, presumably, benefit a bit. And that means that London might benefit. It might try and steal some business away from New York on the basis it doesn't close. I think Asian markets, similarly might feel that they can make a pitch to potential listing companies, Ã¢â?¬Å?You should list with us rather than in New York because after all our weather is allegedly better than yours,Ã¢â?¬ kind of thing.
Mullins: Is that really an argument?
Hilton: That I suppose is really my concern that the New York authorities closed without really discussing it with Wall Street as a whole, and without discussing it with the investment community. New York is in some sense peculiarly vulnerable because it's less automated and more dependent on individual trading pits and a floor. Other exchanges tend to be much more electronic, and to that extent, I think that they are less vulnerable to this kind of outage. If we're going to have more and more extreme weather events, then I think it's an argument in favor of a sort of all-electronic stock market where you can run it from your basement if you really want to but you can run it from the top of a mountain if you need to.
Mullins: Andrew, can you paint a picture for us perhaps of the knock-on effect in terms of industries that feel the hit even if they are far away from Hurricane Sandy?
Hilton: Well, obviously tourism is devastated. And, I suppose the fact that flights in and out of the U.S. are shut down is pretty devastating for many, many industries. If one thinks how many people actually fly across the Atlantic from Europe to the East Coast of the U.S. every day, it is completely astonishing. Its numbers, 50, 60, 70,000 people fly. Those flights have been canceled. Those people are not moving, presumably most of them had a real business reason to be traveling, so it's disruptive. It's not the end of the world. None of this is sort of apocalyptic but it jacks up the cost of doing business.
Mullins: Andrew, any other knock-on effects overseas that might not occur to us at first blush?
Hilton: Well, I think certainly, it's going to feed the environmental movement, if you like. Extreme weather events are likely to become much more common in the future, and that will feed the environmental movement, it will feed the alternative energy movement, it will give a boost to Green political parties, certainly in Europe if not in the U.S.
Mullins: OK. Andrew Hilton, Director of the Centre for the Study of Financial Innovation, in London. Nice to speak with you.
Hilton: Good to speak with you.
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