There are still two to three days before the peak flooding – and damage – in Houston arrives, yet already Wall Street is trying to calculate how much the worst natural disaster in decades befalling the 4th largest American city will impact US GDP. Or rather boost it, because in two notes out late in the day Monday, one from Goldman and one from JPM, the authors come to two polar opposite conclusions: Goldman claims that the Houston natural disaster will reduce Q3 GDP by as much as 0.2%, while JPMorgan predicts that the “net impact on Q3 and Q4 GDP should be positive.”

How do the two arguably most sophisticated investment banks reach such diametrically opposing conclusions? Here is the answer, straight from the horse’s mouth. First, Goldman:

Before we get to the bottom line impact on GDP, Goldman considers the impact on other aspects of the economy, such as labor, retail sales, industrial production and construction spending.

In past research, we’ve also found substantial effects on jobless claims, which, for example, increased by 80k in the week after Hurricane Sandy and slowly declined in subsequent weeks. Given the extent of the disruption and damages, we would expect at least some impact from Hurricane Harvey on jobless claims and on some of the August and September monthly data releases, potentially including retail sales, industrial production, and the various housing indicators. In terms of the August employment report released this Friday, the payroll survey period ended two weeks before the hurricane and should not be affected. We believe it is too early to estimate an impact on the September employment report.

Speaking of Sandy and other prominent U.S. hurricanes, the pattern appears to be uniform: the exhibit below revisits Goldman’s analysis of four major economic indicators around 18 major hurricanes, including Hurricanes Katrina and Sandy.

So while superficially, one could assume a “Keynesian broken window fallacy” is all one needs to spin a natural disaster as bullish for the economy, Goldman is at least smart enough not to fall for that trap, and notes that one critical consideration in this particular case, is the importance of the energy sector in the regions currently affected.