Japan Quake's Financial Impact: Five Things to Watch

[WestVirginiaRebel]

CNBC:

While commodity and currency markets took the biggest immediate hit from Friday's earthquake and tsunami in Japan, the damage will be felt throughout the world's economy and the US.

In addition to the massive human toll, the quake and ensuing tsunami will exact an economic toll on Japan, which is still struggling to shake the detritus of its "lost decade" brought on by economic stagnation.

The price on both fronts is impossible to calculate at this point, but it no doubt will be profound.

"It's going to be of the most expensive disasters in history before it's done," Dennis Gartman, hedge fund manager and author of The Gartman Letter investor bulletin, told CNBC. "This is not just a Japanese circumstance, this is on both sides of the Pacific and the dollars are going to add up very quickly."

1. Ultimately, a Recovery

After Japan copes with its massive human and financial loss, the country will have to focus on rebuilding. That will take billions in private and public funds, a stimulative effort that, grimly ironic though it may be, will generate some level of stimulus and recovery.

"Obviously the human toll is the most important thing," said Nicholas Colas, chief investment strategist at ConvergEx in New York. "Generally afterward you get a big rebound in economic growth. Rebuilding creates a lot of jobs for a lot of people and a lot of new wealth creation."

Those jobs likely will come across a variety of fields, particularly in construction and energy, which sustained heavy damage from the quake.

"There's certainly going to be a lot of resources directed toward rebuilding that part of Japan," said David Resler, chief economist at Nomura Securities in New York. "It's not all going to come from the government—it's going to come from insurance companies, private companies and private savings to divert resources toward rebuilding a devastated part of the island."
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