It was business as usual for the financial markets after Hurricane Irene lashed out less destruction than was originally anticipated this past weekend.

On Friday reports from the National Hurricane Center showed that Irene could possibly come to shore as a Category 3 storm. It eventually made landfall in North Carolina as a Category 1 storm and by the time it hit New York City, it had already weakened to a tropical storm

The Securities Industry and Financial Markets Association (SIFMA) issued a statement that recommended no change to bond market schedules. NYSE, Euronext, Nasdaq,OMX Group, Bats Global Markets and Direct Edge Holdings also sent statements saying they plan normal trading sessions today.

Although the East Coast was spared from the worst, Hurricane Irene still did damage in terms of numbers. Early estimates given to cover U.S. damage reported by Kinetic Analysis Corp. put the cost to insurers somewhere around the $3 billion mark, with overall economic losses of $7 billion.

Standard & Poor's analysts said this weekend that assessing how much of the damage will impact non-agency RMBS would depend on the course and the strength of the storm.

According to Moody's Investors Service, hurricanes affecting the Mid-Atlantic and Northeastern coastal regions are much less common than those affecting the South Atlantic states.

"Even at lesser intensities,these hurricane can cause extensive damage owing to the very high levels of property developments along the coastline in many of these states, including significant developments on barrier islands," Moody's analysts said in a report. "The New Jersey shore and Long Island, New York are particularly vulnerable to hurricane losses given the high levels of development, high population density and low lying nature of these areas."

S&P said that the amount of flood and wind damage insurance in place in houses near the storm center is another uncertainty. "The NY-NJ-CT area has the most exposure, as average property values are higher in the region and mortgages are more likely to be above agency limits. The states with the highest exposures are NY, excluding NYC ($43.5 billion), NJ ($11.9 billion), CT ($10.7 billion), MA-RI ($6.9 billion), SC ($5.3 billion), VA ($5.1 billion), NC ($3.8 billion), DE ($2.4 billion), and MD ($0.8 billion)."

According to Moody's, among insurance companies in the states most at risk — which include State Farm, Nationwide, Allstate, Liberty Mutual and Travellers — all have strong market shares and will likely face significant losses. These companies also have strong capital bases that are typically able to withstand a fair degree of catastrophe volatility.

However, the rating agency cautioned, that these insurers have also had high weather-related losses in the first half of the year from tornadoes and winter storms. Irene will likely "exacerbate already weak year-to-date financial results," Moody's analylsts said.

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