The new cover photo from New York Magazine is absolutely spectacular, showing the division of power-less and aglow Manhattan after Hurricane Sandy:
Manhattan, half dark.
The photograph was captured by Iwan Baan. The editors at the NY Magazine explain how the photo came out to be:
An improvised newsroom was soon up and running, with 32 editors, photo editors, designers, and production specialists squeezed around a conference-room table, down the length of which snaked a tangle of power strips, extension cords, and chargers resembling similar arrays sprouting across the city. At this point, proofs were due to go to press in 72 hours. Staffers spent them scrambling to secure writers and photographers as well as exchanging personal e-mail addresses to make it possible to transfer files (our servers were still down), arranging car pools, finding rooms at three different hotels for colleagues from darkened neighborhoods, and draining our hosts of coffee and soda. The easiest part of a harried three days came Friday around noon, when we met to settle on the cover. A photograph taken by Iwan Baan on Wednesday night, showing the Island of Manhattan, half aglow and half in dark, was the clear choice, for the way it fit with the bigger story we have tried to tell here about a powerful city rendered powerless. We crammed back into the conference room, raced to finish our pages, and hoped, like other New Yorkers, that everyone would find the lights on when they got home.
What a story.
Update (11/4/12): According to Poynter, Baan created the photograph with the Canon 1-D X with the Canon 24-70mm f/2.8L lens on full open aperture (f/2.8). The camera was set at 25,000 ISO and Baan used 1/40th second shutter speed. Baan mentions that this photograph would have been impossible to photograph without the ability to boost to such a high ISO, but I disagree. He could have underexposed the image significantly and brought out the shadows in post-processing. How much leverage he has in editing photos, however, I do not know.
This Bloomberg piece details how those on Wall Street handled Hurricane (Superstorm) Sandy. It’s slightly (perhaps very) disconcerting, as these people turned to $1,000 wine, delivered sushi, and Monopoly games:
“I had to go to the wine cellar and find a good bottle of wine and drink it before it goes bad,” Murry Stegelmann, 50, a founder of investment-management firm Kilimanjaro Advisors LLC, wrote in an e-mail after he lost power at 6 p.m. on Oct. 29 in Darien, Connecticut.
The bottle he chose, a 2005 Chateau Margaux, was given 98 points by wine critic Robert Parker and is on sale at the Westchester Wine Warehouse for $999.99.
“Outstanding,” Stegelmann said. He started the day with green tea at Starbucks, talking with neighbors about the New York Yankees’ future and moving boats to the parking lot of Darien’s Middlesex Middle School.
You have to click to read the rest. Using fax machines? No dumpling bar at JP Morgan? Wall Street had it rough.
Paul Greenberg, writing for The New York Times op-ed, explains how oysters could have protected the New York harbor from the devastating storm surge caused by Hurricane (tropical storm) Sandy:
Until European colonists arrived, oysters took advantage of the spectacular estuarine algae blooms that resulted from all these nutrients and built themselves a kingdom. Generation after generation of oyster larvae rooted themselves on layers of mature oyster shells for more than 7,000 years until enormous underwater reefs were built up around nearly every shore of greater New York.
Just as corals protect tropical islands, these oyster beds created undulation and contour on the harbor bottom that broke up wave action before it could pound the shore with its full force. Beds closer to shore clarified the water through their assiduous filtration (a single oyster can filter as much as 50 gallons of water a day); this allowed marsh grasses to grow, which in turn held the shores together with their extensive root structure.
But 400 years of poor behavior on the part of humans have ruined all that. As Mark Kurlansky details in his fine book The Big Oyster, during their first 300 years on these shores colonists nearly ate the wild creatures out of existence. We mined the natural beds throughout the waterways of greater New York and burned them down for lime or crushed them up for road beds.
Did you know the expression “The world is your oyster” derives from Shakespeare’s The Merry Wives of Windsor?
Mark Gimein has a short post on Bloomberg, explaining that a typical investor doesn’t really have a chance to profit on Hurricane Sandy:
Another way to take advantage of the downside risk might be to put buy put options on the S&P 500 index. If a lot of folks were doing that, you might expect November put options with a strike price of 1350 or 1375 — that would represent a three or four percent decline in the S&P 500 — to spike upwards. They haven’t.
Recent years have been blockbusters for catastrophically deadly and expensive extreme weather events; Munich Re has some very useful data on this, which show 2011 as a record-setting year for costs of natural disasters (this includes Japan’s Tohoku quake). While a lot of ink has been spilled about the possibility of hedge funds betting on high-impact, low-but-meaningful-probability events like the storm, that’s easier said than done. It’s possible to make a fairly general bet against the insurance industry, or to bet on a sharp drop in the markets.
In practice, however, making a specific bet that would hedge against — or profit from — a weather disaster, is a lot more difficult. There’s not a substantial market for, say, put options on the insurance companies with exposure to Sandy.
If you want to hedge the financial risks of a hurricane, there are not a lot of market tools at your disposal. The main hurricane option for investors, whether ordinary stock pickers or hedge fund traders is the same as for other New Yorkers: shut the windows, turn on the news, and watch the storm’s progress on TV.
Not mentioned: even if you wanted to trade stocks or options, the entire stock market (NYSE, NASDAQ) is closed today and tomorrow. Good luck with that.
Felix Salmon opines on how financial crises are similar to huge storms, such as the impending Hurricane Sandy barreling down on New York and the rest of the East Coast:
Financial crises are similar to storms: they require humility, not hubris. Being prepared can be helpful at the margin, but ultimately it doesn’t matter how good your liquidity management teams and risk ledgers and counterparty hedging operations are: if everybody else is blown over by forces beyond their control, then you will be too.
That’s why skyscrapers always used to be built well above the water level, and that’s why we used to have dumb regulations like Glass-Steagal and Basel I, which weren’t very sophisticated, but which generally did the trick. Buildings like 200 West are a bit like Basel III: they’re built with models, so that they can withstand certain forces. But if an unprecedented storm arises, they’re still more at risk than, say, Trinity Church, built more than 150 years earlier. Sometimes, simple common sense (high ground is safer, huge books of complex derivatives can blow up in unpredictable ways) does a lot more good than any amount of sophisticated preparation.
The gist of Felix’s post relates to how Goldman Sachs is protecting its multi-millionaire dollar headquarters with sandstorms, but the analogy can be expanded to all the big banks.