El-Erian: Sandy's Market Impact — From the Known to the Uncertain
Sandy Impact on Retailers
So this will be much more about private sector-led activity than policy stimulus. The impact therefore will be less front-loaded, not as comprehensive and spread over a longer time period.
Finally, there is one of the most uncertain issues in the aftermath of the storm - the extent to which the realization of limited policy effectiveness at a time of great need will entice our Congress to step up properly to the challenges of economic governance. This would start with the fiscal cliff and hopefully would pivot to the list of long-delayed policies.
Sandy Impact on Energy
If history is a guide, and notwithstanding the significant devastation created by Hurricane Sandy, there should be limited expectation that even this stark situation will prompt Congress to take concerted and meaningful action.
In the immediate term, American communities will rally their considerable resolve and resilience, and they will summon their culture of giving to help victims of the storm. The challenge is also to facilitate the longer-term ability to harness fully resources of private and public sectors currently undermined by deep political divisions, thus removing what has been a constant dampener of entrepreneurship and value creation.
Mohamed El-Erian is the CEO and Co-CIO of PIMCO, which oversees nearly $1.8 trillion in assets and runs the Pimco Total Return Fund, the largest bond fund in the world. His book, "When Markets Collide," was a New York Times and Wall Street Journal bestseller, won the Financial Times/Goldman Sachs 2008 Business Book of the Year and was named a book of the year by The Economist and one of the best business books of all time by the Independent (UK).