OZY: How EL Nino Will Cause a Financial Storm
By SIMON CONSTABLE
Kid weather is back and acting up with a force unlike what many investors are seeing out of Puerto Rico, Greece or even China. The “little kid” or “Christ child” — aka El Niño — could cool economic growth and stoke inflation around the globe in the months to come.
Yes, El Niño comes around every three to five years and lasts only about a year as ocean temperatures off the equatorial west coast of South America rise. But temperature increases of 4 to 6 degrees above normal can, and do, whip up potentially dangerous weather patterns, such as droughts and killer floods, which then hit homes, businesses and industries. The latest El Niño is slated by some observers to rival the one in 1997–98 as the biggest ever — one that killed an estimated 2,100 globally with a force roughly equivalent to 1 million Hiroshima bombs. It left $33 billion in property damages in its wake. “This could be a big one,” warns a recent report from Brown Brothers Harriman, a financial firm.
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