The latest plan to stop the oil flowing from a BP site in the Gulf of Mexico may not work as well as originally hoped, the U.S. Coast Guard said Thursday. Many experts are now planning for the worst. What is the long-term impact of the spill on the economy? Steve Blitz, senior economist at Majestic Research discussed his insights.
“The long-term implications are not good. But the first thing is that nothing that’s going on in the Gulf—as horrendous as its impact is on all these regions—is going to derail the overall U.S. economy,” Blitz told CNBC.
However, Blitz said from a financial standpoint, the spill could impact the immediate real estate market if the oil reaches the Florida Panhandle.
“There’s a lot of municipal securities that are tied to revenue from that area. And there’s a lot of CMBS (commercial mortgage-backed securities) papers that include a lot of hotels and office areas—and that’s where this begins to flow through to the financial markets and starts to have a potential negative impact,” he said.
“But as bad as it is, it’s a little too early to tell whether if those areas are going to get hurt to that extent.”
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No immediate information was available for Blitz or his firm.