CNN IN THE MONEY
Power Restored to New York City; The Economic Impact of the Power Outage; Pay Phones Played Important Role in Power Outage; Political Finger Pointing Begins Over Power Outage
Aired August 16, 2003 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: Well, hello again to everyone out there. Today a special live edition of IN THE MONEY at the CNN Center in Atlanta. For now, though, I'm Fredricka Whitfield.
THOMAS ROBERTS, CNN ANCHOR: Hi, Fred. I'm Thomas Roberts. Great to have you with us, everybody. Coming up this hour, we are going to take a look at what kind of impact the largest power outage in U. S. history has had on the economy. The big question now, not just how did it happen, but what did it cost you?
For some answers on all this, we want to bring in financial correspondent, Susan Lisovicz, who is standing by live in New York for us. Hi, Susan.
SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: Hello, Tom. Hello, Fredrika. We will, of course, explore those answers during this hour. As Fredricka mentioned just a couple of minutes ago, we are also expecting a news conference with energy secretary Spencer Abraham and New York Governor George Pataki. Of course, we will bring it to you live as it begins. That will be coming from Albany, New York, the capitol of New York.
The effects of the power blackout still linger today for millions of people, both in the United States and Canada. Here in New York, things are starting to literally look a little brighter, but that's not the case in some other areas. The latest now from CNN's Elaine Quijano.
ELAINE QUIJANO, CNN CORRESPONDENT (voice over): The glitter of the Big Apple is back, with power restored last night to all five boroughs. The mayor said, for the most part, the city's 8 million residents behaved.
MICHAEL BLOOMBERG, NEW YORK CITY MAYOR: There has been no spike in criminal activity. In fact, arrests and reported crimes are under what you would typically expect for a summer day.
QUIJANO: In New York, subway trains started running again today, while in Cleveland, the power is on, but residents are asked to boil their drinking water. People in Detroit are being asked to do the same. Most of the lights are on there, but the mayor and energy officials are stressing the need to conserve energy when possible. TOM FARLEY, CHAIRMAN, DEPARTMENT OF ENERGY: Unless we're able to keep our electric load below the available resource level, we will have no choice but to initiate rolling blackouts this afternoon.
QUIJANO: Now attention is turning to the cause of the blackout. Investigators are focusing on a single line that went down in Cleveland, which might have triggered the power loss that, at one point, affected more than 50 million people in the U. S. and Canada. A joint U. S./Canadian task force will be set up to seek solutions to prevent future outages.
QUIJANO (on camera): It's not clear why that line failed in Cleveland. Meanwhile, here in New York City, officials are estimating that this power outage cost the city more than $500 million. Elaine Quijano, cnn, Times Square.
LISOVICZ: The costs to the economy for the power blackout are still being tabulated, but initial estimates show New York City may have been hardest hit. Preliminary numbers show the city lost up to $750 million in revenue. Additionally, as much as $40 million in lost tax revenue, as business activity shut down during the outage. And the outage cost the city an estimated $10 million in overtime for emergency workers. And that accounts for just the first 24 hours of the crisis.
So how does that translate into the national economy? As CNN's Peter Viles reports, the worst blackout in U. S. history doesn't mean necessarily the economy is lost in the dark.
PETER VILES, CNN CORRESPONDENT (voice over): From Detroit to New York City, the biggest blackout in American history is clearly a shock to the economy. Travel plans disrupted, workdays cut short, but how bad is the damage? Well, not serious enough, says Bear Stearns, to derail an economy that is gaining steam.
JOHN RYDING, BEAR STEARNS: Yes, the dates for August will be affected. For example, it's the payroll survey week. Hours of work will be depressed because a lot of people took a three-day weekend. Maybe that's good for some people, but losing a day in the summer is certainly not a make or break event for the U. S. economy, which, generally speaking, is on an improving upswing at the present time.
VILES: The mayor of New York likened the crisis to a blizzard that shuts the city down. Big storms tend to have minimal economic impact. It's true, they stop some economic activity in its tracks, but they also create new spending, emergency spending.
TRACI MULLIN, NATION RETAIL FEDERATION: A lot of those sales will be made up. So we really -- we really sort of view this as an inconvenience, more like a snow day than anything else.
VILES: There's an element of good timing to all of this. August is a very slow economic month, and Friday is the slowest work day of the week.
LISOVICZ: That report from CNN's Peter Viles.
We turn our focus now to the financial impact of the blackout. Kathleen Hays joins us now live from the New York studios to talk about that. Hi, Kathleen.
KATHLEEN HAYS, CNN CORRESPONDENT: Hi, Susan. Well, you know, I think it's really interesting the information you gave on New York City, how those losses are being toted up because, you know, 10 million people roughly in New York City. We know 50 million people across nine states were affected by this blackout. So you can take those numbers -- it was almost $1 billion. I've heard of an estimate, say, maybe of $5 billion in economic losses, but let's remember, this is a $10 trillion economy every year so, as Peter Viles pointed out, it's probably something the economy can take in stride.
But let's remember it, is a bit of a shock. The stores that couldn't reopen on Friday because they didn't have power here in Manhattan -- it was interesting that it looked like if you were a mom and pop or independent business owner, you got your shop opened. Many of the chains, the McDonald's, the Starbucks -- those were the ones where it seems maybe corporate headquarters could not get in gear quickly enough, even in neighborhoods where the power was on and get their operations going again.
It's also interesting to think that, as Peter said, think of this like a blizzard. It has a temporary impact. You get going again, but there is a sense of what's a permanent loss and what's something that the economy makes up. In the line of a permanent loss, you can think of all the restaurants, all the little grocery stores, even big ones, that had to throw spoiled food out. That's not a loss you're going to get back.
Another thing would be, for example, an empty restaurant. If you didn't get those seats on a Thursday night, they're not going to come back necessarily on Saturday night to make up for the lost dinners.
Things like empty movie theaters, like empty Broadway shows, especially a movie theater where the ticket is not bought in advance, you just didn't get the business in. You are not going to make it up.
But there are offsetting boosts. For example, think of all the people who bought flashlights, flashlight batteries, candles, people who had to get an extra bottle of wine, if they could, before the liquor store closed. People had to reorder, say, the restaurants, the bodegas -- when they got open for business, they threw out the spoiled food. Well, that is going to give a little boost, all their reorders.
And you know, a lot of business was displaced because if people got home to someplace where they did have power, by Friday, a lot people didn't go back to work. They went someplace and shopped. My neighborhood on the Upper West Side of Manhattan was very busy Friday afternoon. The restaurants were busy. The stores were full. So those merchants are going to get some of that back.
When you look, for example, at the $10 million worth of overtime for the emergency personnel here in New York City -- when they get the overtime economics checks, some economists say, well, they may take at least a chunk of that and spend it. So there is a sense that we have to watch overtime and see how much of this is offset.
Out in the Midwest, Phil Flynn from Alaron tells that us gas prices are up because of some refinery problems, but a bright note, Susan, apparently the IRS is telling people who didn't meet the August 15th extended income tax filing deadline, they have another week. Just write "Northeast Blackout" on the top, and they are going to give you an extra grace period.
LISOVICZ: So a definite upside for procrastinators. Kathleen, you gave us a good overall view of the blackout and the economy and some businesses that will actually benefit. You know, when we measure the economy, when economists crunch the numbers, a lot of things that they look at have nothing to do with numbers. It has a lot to do with consumer confidence. Has anybody addressed that issue?
HAYS: Well, actually, it's very interesting, Susan. In a note Merrill Lynch put out, they said that they're going to watch the number of generators that people buy for their homes, little portable generators. If you see more of those purchases, they're going to think this has kind of a more lasting impact. If they don't, it won't.
But when you think of the big picture, an economy can't run when the lights are out. I think everyone saying this is a wakeup call to reminder that there is a vulnerability in the economy -- I think more and more people are going to be asking the financial question. If markets are efficient, if capitalism works, why isn't more investment going into our infrastructure?
And again, Rich Bernstein of Merrill Lynch apparently recommending some investments in those kinds of companies. He thinks it's an underinvested sector because the attention hasn't been there. But I think it's something now that's going to be in the back of people's minds along with other issues hanging over us that we are vulnerable, and I don't think people expect a lasting confidence issue in terms of how we shop, but certainly in terms of how businesses look at their outlook. Susan?
LISOVICZ: Kathleen Hays, thanks so much for joining us.
We turn our focus now to the impact of the blackout on the financial markets. Joining us from Washington, Ira Carnahan. He's the associate editor of "Forbes" magazine. Welcome.
IRA CARNAHAN, ASSOCIATE EDITOR, "FORBES" MAGAZINE: Hi, there. Thank you.
LISOVICZ: Well, I guess the best thing that we can say is that the markets were open yesterday at a time when power was not fully restored. CARNAHAN: They were, indeed. It was a reasonable day. The markets were basically flat, which is a lot better than what one might have feared, given what had happened the past couple of days. LISOVICZ: A lot of people were saying that it really was sort of a symbolic day on Wall Street. Is really the true measure of the fallout -- because more numbers will be crunched, people have more time to assess the situation -- is Monday really a more important day on Wall Street?
CARNAHAN: I think it will be an interesting day to see what happens, but I imagine that in the short term, the market impact is going to be fairly minimal. I think over the longer term, though, we have to look for some of the political fallout of this crisis, and that could really have some market significance, as Democrats and Republicans wrangle over policy.
LISOVICZ: Well, tell us how. Is it really about energy? You saw the President already, certainly saying that this gave him an opportunity to push for his idea of energy.
CARNAHAN: Right. I mean, if you look, Republicans and Democrats really have different takes on what's the root of the problem. Democrats say that Republicans pushed deregulation in the energy industry the past few years and that's really at the base of a lot of problems we're seeing now. Republicans, on the other hand, point at Democrats and say, look, you guys have been giving into environmental interests. We haven't been building enough transmission in the past, they're to blame. I think how that plays out in the next few months and the debate over the energy bill could have real consequences for a lot of companies in the energy sector.
LISOVICZ: And of course, if we're talking about energy, of course, we have to talk about the large us most populous state in the union. That is, California. Will be there -- will there be a reinvigorated debate in California?
CARNAHAN: Yes. It's kind of interesting the significance of this for California. Some political experts are saying this may actually be beneficial to Gray Davis because while there was a lot of turmoil there, they didn't have the sort of blackouts we've seen here, but I think what's gone on in California, what's gone on now in the Northeast is going to make a lot of people turn their attention to the energy sector, and there's going to be a lot of wrangling in Washington over the next few months to figure out where we should go.
LISOVICZ: And we will all be following it undoubtedly as well, you as well. Ira Carnahan, associate editor of "Forbes" magazine, thanks so much for sharing your Saturday with us.
CARNAHAN: Thank you.
LISOVICZ: When we come back, this special edition of IN THE MONEY, we'll be talking about cell phones and the sudden popularity of the pay phone. That when we come back.
LISOVICZ: You are looking at a live picture of the state capitol in Albany, New York, where at any minute we're expecting a news conference to begin featuring the Energy Secretary, Spencer Abraham, and New York Governor, George Pataki. We, of course, will bring it to you live as soon as it begins.
Over the last day and a half, there were a lot of unusual scenes witnessed here in New York City. Pedestrians directing traffic. Thousands of people sleeping on the steps of the U. S. Post Office, and then perhaps the most unusual sight of all, long lines waiting for pay phones. Mary Snow on that very interesting angle, the reemergence of the landline phone. Hi, Mary.
MARY SNOW, CNN CORRESPONDENT: Hi there, Susan. Can you remember the last time you used a public pay phone?
LISOVICZ: No, I can't.
SNOW: It's something that a lot of -- and a lot of people will say the same. Through the years, as cell phones become more popular, you're seeing the pay phones being used less and less, and as people become more dependent on cell phones as well, even in their homes, they're getting rid of their landlines.
Now, cell phones, no one has to tell you, came into major failures when the power outage happened on Thursday, and that has led to a lot of questions because people stranded -- the thousands of people stranded in the city -- trying to get to loved ones were unable to do that, and they had a tough time getting through to their families.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I decided I should start trying to get home, and I tried to call my husband over there, and I couldn't get through with the cell phone, and I finally did while I was on line for the pay phone, and told him I was coming, but I had to walk home. So, it took me, what, two hours to walk home?
(END VIDEO CLIP)
SNOW: And just as that woman said, there were long lines and people waiting to make those phone calls. It's led to a lot of questions because after 9/11, there were calls to improve cell phone service in terms of getting through in emergencies, and Congressman Billy Tauzin, for one, saying that he wants to hold hearings on the cell phone industry.
As for cell phone carriers, they say the major problem was the volume. Sprint, for instance, saying that its landlines -- volume surged about three times amount on a normal day. And, of course, wireless services saying it was up about four times more than normal.
What a lot of the cell phones are saying is that in terms of power at these cell sites, they have batteries that are able to run for several hours, but after awhile, they run out. And can they have generators at every one of those cell sites? That is a question. But a lot of questions taking a look at the cell phone industry in the wake of this massive power outage. Susan?
LISOVICZ: One thing we can say for sure, Mary Snow, is that the traditional landline phone is not dead, and we'll have to leave it at that. CNN financial correspondent Mary Snow. Thanks, Mary.
Now let's go down to Atlanta. This blackout is barely over, but the political finger pointing has begun. To bring us that most interesting story, CNNFN correspondent Ali Velshi. Hi, Ali.
ALI VELSHI, CNNFN CORRESPONDENT: Susan, good to see you. As you know, within seconds of this going on, we quickly learned that it wasn't just New York, it wasn't even just a few cities. It was all over the Northeast, and it was into Canada, and immediately the first thing people's minds went to was terrorism. A simple blackout is one thing, but as police chiefs and fire officials learned of the scope across all of these places, they started to worry about this, and the first thing was keeping people calm, and as soon as they began to realize that this wasn't something to do with terrorism, it was probably just a massive cascading power failure, and they wanted to find out what that was about, President Bush and New York Mayor Michael Bloomberg were quick to issue statements to calm the public.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The one thing I think I can say for certain is that this was not a terrorist act.
BLOOMBERG: There is no evidence of any terrorism whatsoever. I don't think there's any question from all the power companies that feel very strongly that it happened in Canada.
(END VIDEO CLIP)
VELSHI: Susan, one of the things that happened, you heard Michael Bloomberg talking about Canada. Immediately the premier of Ontario shot that one right back and said, it wasn't us.
LISOVICZ: Yes, it's almost a relief, Ali, in a way that, you know, once those terrorism fears subsided, it was almost politics as usual.
VELSHI: And that's exactly what happened. Once they figured out that it wasn't something that they needed to blame each other about, they started focusing on where this might be coming from, and I'd like to say the story took on eerie proportions at that point. A series of linked power transmission stations around Lake Erie, which we have been talking about known as the "Erie Loop," came into focus, and then investigators started to focus on the way the energy flow might have been reversed. We had seen pictures of this over the last couple of days.
An organization called The North American Electric Reliability Council is the body that monitors the energy flow. They said they're focusing now on Cleveland, where that energy flow might have been turned backwards.
The bottom line is, all of us reporting on this and watching this over the last couple days, Susan, it's a little arcane, and after millions and millions of people have been out of power, I don't know that the whole country needed to know the intricacies of the power grid system.
The President certainly couldn't be talking about the peculiarities of the Erie Loop, which no one had ever heard of. So he decided that one of the things that they're going to focus on is the age-old whipping horse, age itself. The system's too old, the President says. It doesn't meet capacity, and we're going to have to look at that. That is now where the blame is shifting all over North America. Let's have a look at the infrastructure, the electrical infrastructure. The whole idea of deregulation has meant that it hasn't kept up. There hasn't been an incentive, Susan, for companies to build systems that are up to date and can handle the increasing load, Susan. So we are going to be seeing that discussion as we go forward.
LISOVICZ: You know, the Erie Loop -- no one ever heard of it. No one ever cared. It sort of reminds me of the pregnant or hanging chad.
LISOVICZ: You know, when we're talking about politics, Ali, it's not only, say, Democrats or Republicans blaming each other. We're talking about Canadian and American officials, and that's a very important alliance. So it could be very delicate going forward.
VELSHI: Absolutely. Not only that, we learned over the last few days, if you didn't already know it, that the energy trade between those countries is all part of the same grid. It's all interlinked. It started to go no in a dangerous direction where people were blaming each other across the borders. I think it kind of ended fairly quickly yesterday. President Bush and the Canadian Prime Minister Jean Chretien had a phone conversation in which they both said they have got to pledge to upgrading the system, and they have got to continue to work in concert with each other, and that is definitely the tone that we're going to now see. The idea of pointing fingers as to where it started, I think, is probably over. We're going to start to pinpoint where the problem was reversed, and I think the blame game, Susan, is probably over at least politically for now.
LISOVICZ: Ok, but it certainly is an ongoing story, and we thank you, Ali Velshi, coming to us from Atlanta for bringing it to us.
Now, could he be Arnold Schwarzenegger's new costar? Actor Rob Lowe has a new staff position, and it's not on "The West Wing." That story just ahead.
And tropical storm Erika takes aim. We'll tell you if Texans were in the line of fire.
(COMMERCIAL BREAK) WHITFIELD: Welcome back to this special live edition of IN THE MONEY. We are taking a look at how the blackout could have impacted you and your wallet.
ROBERTS: That's right, but there's also other news happening across the America and around the world today. So, we are going to take a look at it for you.
ROBERTS: All right, Rob, thanks very much. You know, surviving the blackout -- we want to show you these New Yorkers. You know, they may have survived without a scratch, but what did the power outage cost the economy?
WHITFIELD: Particularly, what did it mean for a lot of restaurateurs? Well now, a lot of them are back in business, and they are starting to assess what kind of potential damage they may have faced. Michael?
UNIDENTIFIED CORRESPONDENT: It takes a lot to push New Yorkers back. They're a resilient bunch. We are going to take a look at how they're coming back to enjoy having power in the city when we come back.
FREDRICKA WHITFIELD, CNN ANCHOR: Well this just in the ongoing look of the major power outage facing a good part of the northeast part of this country. Now preliminary findings indicate that investigators are now blaming three failed transmission lines in Ohio as to why so many people, 60 million people were living without power for two days now.
Much of the power has been restored in the New York area, and in other parts of the Midwest as well, including Michigan, as well as Ohio, but still parts of Canada are still without power, still a lot of questions being asked. And in a few moments we're expected to hear from the U.S. Energy Secretary about answering some of these questions, as well as from New York's governor, and when that happens out of New York, we'll be taking that to you live. You're seeing right there the picture is coming in from New York. That is the place of the press conference expected any moment now.
In the meantime, power is back on for the most part in New York City. It means that subways are running. It means that there's AC running. People have electricity now and it means a lot of folks are venturing out, heading to the restaurants, particularly because a lot of food in their refrigerators and freezers spoiled.
And our Michael Okwu is at a very popular restaurant there. In a meat packing district in Manhattan.
Michael, what are folks ordering there?
MICHAEL OKWU, CNN CORRESPONDENT: Hello. It takes a lot keep New Yorkers down. They are certainly a resilient bunch. They're getting back and enjoying the power being back in order here in New York City. It's essentially what's going on here at (UNINTELLIGIBLE) restaurants, it's in the center of the meat packing district, which has always been the center of commerce. In recent years it's become a big focus of the restaurant industry. Over the course of the past 24 hours, they started preparing for the power to come back on. They started using some of the devices they weren't able to use over the course of the past 16, 17 hours, when the power was off. This is a place that does some 500 to 600 dinners a night. They lost a lot of that business on Thursday and Friday night, and they also lost a lot of food fish and meat.
This is what the chef had to say earlier this afternoon.
JEAN ADAMSON, SOUS CHEF, PASTIS: As soon as it came on, we were like, everyone started doing dishes. Everyone started wiping down the line. Everyone was like sweeping the floors. It was crazy.
OKWU: Now, Governor George Pataki, has, of course, said that all of New York's power is basically up at this point. The ATMS are functioning. Of the subway, at least 14 lines at this point of the 24 subway lines in New York are fully functional, and they expect to have full capacity in all of those lines by the end of the day. We also understand that at the airports, of course, they are receiving and dispatching flights. They have doing that for the past several days but literally hundreds of people were affected and are still affected because the power outage really affected the computer systems, and many, many flights were delayed. But for the most part, New Yorkers enjoying the fact that they've got power back on -- Fredricka.
WHITFIELD: Michael, well, it looks like a lot of folks are being good sports about it all. Obviously, the restaurant there is teaming with folks. You got quite a few patrons there behind you. What's the reaction from most of them as to, you know, having to endure a little bit of a blackout just for a couple days?
OKWU: Well, most of them were pretty good-natured about it, if you can believe that. There have been a couple of tour who basicly spent a good portion of time outside hanging out in the park, which is something that we're all familiar with, having been in there those day. You saw a lot of people basically hanging out on the sidewalks, in the parks, riding it out because they didn't want to go back into the elevators which were not working.
They didn't wanted to go into their hot, cramped hotel rooms. Many of the New Yorkers we talked to today are very happy, obviously, that the power is back up. They've all talked about the fact that New Yorkers are banding together, that they were very good natured about it. And one of the restaurants across the street said there were other restaurateurs who helped him, because he didn't have any more ice. They gave him ice, and in some cases, actually gave him food. So a real sense of community here -- Fredricka.
WHITFIELD: Michael, a know a lot of New Yorkers are good walkers but there's a lot of relief the subway cars are back in action, at least for the most part, the 14 of 24 lines back in power. All right thanks a lot -- Michael.
ROBERTS: Things are getting back to normal. And that's right, power back on for most of northern Ohio. However, folks in Cleveland are being warned to boil their water at least until tomorrow. Water is flowing once again but there are worries that sewage may have gotten into the system. At one point all four of the city's dumping stations were down.
WHITFIELD: Well, as if there wasn't enough to worry about in Ohio, there's new speculation today that that may have been the place of this power surge starting.
Let's go to CNN's Kathleen Koch in New York who is following this investigation.
Why is it now that these three transmission lines are at the focus of this investigation in Ohio?
KATHLEEN KOCH, CNN CORRESPONDENT: Well, Fredricka, they're looking at basically one big line in particular. They've done their detective work and traced it back, and they've noted this failure occurred just around 3:00 on Thursday afternoon, when this one power line and 345,000-volt line in Cleveland, Ohio went out. But the good news s there was a release that came today from the North American Electric Reliability Council, taking a look at the system at large now, and how it's doing since Thursday's incident.
WHITFIELD: All right, Kathleen. Kathleen, I am sorry, I'm going to have to interrupt you right now because New York Governor George Pataki is talking now. Let's listen in.
(INTERRUPTED BY A LIVE EVENT)
LISOVICZ: You've been listening to a news conference taking place in Albany, New York with Spencer Abraham, the energy secretary, addressing the current situation following the worst power outage in the nation's history, saying that, congratulating the governors in the tri-state area, congratulating their swift response to a very serious crisis. And saying that the power is slowly coming back on to the electrical grid but will be fully measured once work resumes on Monday, but Democratic governor Jim McGreevey calling for a thorough complete agonizing investigation into just what happened. The power outage pulled the plug on ATMs and shopping for consumer around the nation. More on the economic fallout from the blackout when we return. You're watching IN THE MONEY."
LISOVICZ: Welcome back to this special edition of IN THE MONEY. Well the Dow, the Nasdaq and S&P 500 rallied yesterday, but was it more symbolic this rally? Just the very fact that the markets were open may have been the news of the day.
In any case, our own Christine Romans spent a long, memorable day on Wall Street. Christine, and it was big news that when the city was dark, that the NYSE opened as scheduled at 9:30. CHRISTINE ROMANS, CNNfn CORRESPONDENT: Absolutely. Generators were powering throughout the night, and at 6:00 in the morning on Friday, it was generator power that was at work at the New York Stock Exchange. The Con Ed power kicked in and everything opened at 9:30 as planned. A lot of attention given to Mayor Bloomberg, an important person in New York City ringing the bell. Ringing the closing bell, perhaps the most important players on wall street the past few days, the electricians who got everything up and running, Susan. For the traders on the floor, they all said it was a quiet day, it was a blip.
The quietest volume of the year but, they were saying it was important to show that the market was open and could stay open. Slightly higher on the day, and you saw power stocks moving higher. You saw bonds moving lower. You saw airline stocks moving lower, pretty much what you would have expected. Oil moved a little bit higher as well, Susan, of the concerns about supply and disruption to refineries. But for the most part a very, very quiet day -- Susan.
LISOVICZ: And power to the electricians, pun intended. You know, Christine, when we think about Wall Street and we think about the high and mighty, we think about the towne cars and expense accounts, those lavish expense accounts. The fact is that everyone was humbled by the blackout, even the chairman of the NYSE. There were lots of unconventional sleeping arrangements on Thursday evening.
ROMANS: Absolutely, about 300 people slept overnight at the New York Stock Exchange. Dick Grasso, the chairman, said he slept on the couch. You had a lot of unshaven, unshowered, grumpy people when the opening bell rang. You know, more than half the people who are normally on the floor of the stock exchange were there. As you know on a Friday in August, sometimes that's all you can hope for under the best of circumstances. So it was interesting that they did do about 600 million shares and it was pretty much a routine August Friday at the New York Stock Exchange.
LISOVICZ: Routine August Friday, but perhaps much more telling on Monday and Christine, you, of course, will be there. Our thanks to CNN market correspondent Christine Romans. We'll see you on Monday.
And IN THE MONEY will be back with a very important segment of the economy that was impacted -- retailers. We'll be talking to a retail expert when IN THE MONEY returns.
LISOVICZ: This week's massive blackout comes at a very sensitive time for the nation's retailers. Back to school has begun, second only to the Christmas holidays, in terms of dollars and importance to retailers.
Here to help us assess the fallout, Dana a retail analyst with Bear Stearns. Good to see you, Dana.
DANA TELSEY, RETAIL ANALYST: Thank you.
LISOVICZ: $15 billion for back-to-school, is this a total loss? TELSEY: We're certainly fortunate it happened on Thursday, more near the end of the day, not the beginning and it only happened in a certain area of the country. So, definitely an impact but it's hard to assess right now. We'll get more details next week as retailers report their earnings.
LISOVICZ: We have some preliminary numbers from ShopperTrak. what are they telling you.
TELSEY: ShopperTrak is estimating at $30 million was lost in the northeast for back-to-school sales during the time period the stores were closed.
LISOVICZ: That's a lot of money. Compare it to the President's Day weekend blizzard, also when it's hard hit for retailers.
TELSEY: That cost around $422 million in sales. This is certainly small in significance. Certainly Labor Day is the biggest weekend of the month of August. And the month of August is the third most important month of the year.
LISOVICZ: OK, talk about some retailers though, who actually may have benefited from this?
TELSEY: Food and drug retailers would be the big beneficiaries. Don't forget stock upsales and the need to buy consumable items is key. When there is a blizzard or blackout, food and drug retailers can get a surge in sales by 10 percent to 15 percent.
LISOVICZ: You know, we had Home Depot and Sears selling generators which had to be very popular items..
TELSEY: Definitely generators, flashlights, battery, are all the items consumers were buying during the blackout.
LISOVICZ: You and I were calling many retailers yesterday and the uniform was the executives are all in strategy meetings but that won't be the case next week. Why is that
TELSEY: The reason next week is because retailers report their earnings. We'll hear what the assessment is. We'll begin to see if any retailer need to take any extra promotions. But there is a sense of pent up demand. Schools don't begin until late August for most of the northeast areas so that full priced selling hopefully still has a chance.
LISOVICZ: So, a blip but not a loss. Dana Telsey, retail analyst for Bear Stearn. Thanks so much, Dana.
TELSEY: Thank you.
LISOVICZ: That's in for this special edition of IN THE MONEY. Join us tomorrow at 3:00 p.m. Eastern.
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