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Volcanic Ash Makes A Money Mess

By Dian Vujovich

Well I really lucked out— big time. I was supposed to be at The Ritz in London last week. Scheduled to fly back to Miami the day after the Eyjafjallajoekull volcano blew its top for the second time this month. Staying in London for an extended period of time when you’ve planned for it is one thing. But it’s quite another when the delay is the result of Mother Nature’s hand that she keeps waving.

No doubt you’ve read about and seen photos of the nasty huge black cloud of volcanic ash that’s stopped air travel throughout Europe changing the flight plans of everyone on both sides of the pond. What you might not know is the economic mess it has made.

With no firm dates on when all flights will resume, or any idea of if/when this volcano could blow again, every day’s delay means money money and more money.

When this baby blue in 1821, the eruptions lasted for more than one year. Thirteen months to be exact. Talk about a black cloud causing red! If that were to happen this time around, well, that’s just too huge to imagine. So far, it’s probably been devastating on a vacationing family’s checkbook. Add to that the impact on the tourist and airline industries bottom line and every other industry that depends upon freight, parts and products delivered by air! A BMW plant in Germany and a Nissan one in Japan had to temporarily close because they couldn’t get parts delivered.

That said, train travel is enjoying a robust return in parts of Europe. But all in all, the Mighty Miss E. is going to leave a devastating mark on balance sheets going forward.

In an AP news story earlier this afternoon, (http://tinyurl.com/y7vxf72), Vanessa Rossi, an economic analyst at Chatham House in London said that the result could drop European GDP by 1 to 2 percent: “That basically means we’ve got a continued recession. ” She added the timing was, “absolutely bad news at the wrong time. But nobody chooses a volcano to erupt.”

So while no one knows when or for how long a volcano will blow, the same can be said of what’s been happening on Wall Street. Don’t forget that when talking with your broker or rebalancing your portfolio.

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