Pooh Pooh Pah Doo

Oil falls as Ike strengthens toward Texas
VIENNA, Austria AP) — Oil prices slipped further Thursday despite concerns about Hurricane Ike's potential to harm refinery operations in the Gulf of Mexico, falling U.S. crude inventories and an OPEC decision to cut production by 500,000 barrels a day.

On Thursday, Ike was a Category 2 storm with winds near 100 mph (161 kph). It was churning about 645 miles (1,038 kilometers) east of Brownsville, Texas, and moving west-northwest at near 9 mph (14.5 kph), after tearing through Cuba and killing at least 80 people in the Caribbean.

Texas is home to 26 refineries that account for one-fourth of U.S. refining capacity, and most are clustered along the Gulf Coast in such places as Houston, Port Arthur and Corpus Christi. Exxon Mobil Corp.'s plant in Baytown, outside Houston, is the nation's largest refinery.

Refineries are built to withstand high winds, but flooding can disrupt operations and — as happened in Louisiana after Gustav — power outages can shut down equipment for days or weeks.
http://ap.google.com/article/ALeqM5i5TtajgUpSm7KY5jf-lCJGHBB-tAD934GE3G0


BULLETIN
HURRICANE IKE INTERMEDIATE ADVISORY NUMBER 43A
NWS TPC/NATIONAL HURRICANE CENTER MIAMI FL AL092008
700 PM CDT THU SEP 11 2008

DATA FROM BOTH NOAA AND AIR FORCE HURRICANE HUNTER AIRCRAFT INDICATE THAT MAXIMUM SUSTAINED WINDS REMAIN NEAR 100 MPH...160 KM/HR...WITH HIGHER GUSTS. IKE IS A CATEGORY TWO HURRICANE ON THE SAFFIR-SIMPSON SCALE...BUT IS FORECAST TO BECOME A MAJOR HURRICANE PRIOR TO REACHING THE COASTLINE.

COASTAL STORM SURGE FLOODING OF UP TO 20 FEET ABOVE NORMAL TIDE LEVELS...ALONG WITH LARGE AND DANGEROUS BATTERING WAVES...CAN BE EXPECTED NEAR AND TO THE EAST OF WHERE THE CENTER OF IKE MAKES LANDFALL...EXCEPT AT THE HEADS OF BAYS...WHERE SURGE FLOODING OF UP TO 25 FEET COULD OCCUR. COASTAL STORM SURGE FLOODING OF 6 TO 8 FEET ABOVE NORMAL TIDE LEVELS...ALONG WITH LARGE AND DANGEROUS WAVES...CAN BE EXPECTED WITHIN THE TROPICAL STORM WARNING AREA ALONG THE NORTHERN GULF COAST. ABOVE NORMAL TIDES IN THE EASTERN GULF OF MEXICO SHOULD GRADUALLY SUBSIDE OVER THE NEXT DAY OR SO.

IKE IS EXPECTED TO PRODUCE RAINFALL AMOUNTS OF 5 TO 10 INCHES ALONG THE MIDDLE AND UPPER TEXAS COAST AND OVER PORTIONS OF SOUTHWESTERN LOUISIANA...WITH ISOLATED MAXIMUM AMOUNTS OF 15 INCHES POSSIBLE.
http://www.nhc.noaa.gov/

Hurricane Ike is being pooh-pooh and ignored by far too many ignorant Oil traders and the financial media mouth pieces of the US Government. This storm is far more dangerous, and much larger than Hurricane Gustav. With 24% of the US total refining capacity at home along the Texas coastline, one would think that this Hurricane Ike would be sending shivers up the spines of those in the Oil Industry. Houston's Gavelston Bay is a major international port as well. A lot is at stake should Hurricane Ike strike with maximum potential.

Thursday, September 11, 2008
Ike - Big, Slow & Dangerous
Unlike Hurricane Gustav, which sped through the Gulf of Mexico at nearly 18 miles per hour, Hurricane Ike is moving much more slowly. According to the Accuweather.com Hurricane Center, "Ike is traveling west-northwestward at 10 mph [8.7 kt] with maximum sustained winds of 100 mph [87 kt]."

In addition to moving slowly, Ike is a very large storm:

Ike is a very large Category 2 hurricane. Hurricane-force winds extend 115 miles outward from Ike's center. Tropical storm-force winds extend outward up to 255 miles.

The circulation of Ike is so large that it is already causing water levels to rise 1-3 feet across the entire Gulf Coast from South Florida to Texas. Parts of southern Louisiana will have a 3- to 5-foot water rise with tropical-storm conditions Thursday. From 2-4 inches of rain is expected along the immediate coastline of Louisiana today, along with isolated weak tornadoes right along the coast.

Beyond Ike's huge expanse and slow forward movement, Ike is also now likely to take a more dangerous course, both in terms of offshore and onshore assets that will be in its path:

The recent slower speed of Ike means there is a better chance for it to take a track farther north, bringing the center closer to Galveston. The best estimate right now is for landfall somewhere between Matagorda Bay and Galveston, Texas. Nonetheless, a devastating storm surge is expected for more than 100 miles east of landfall.

With the National Hurricane Center predicting that Ike will be on the verge of being a Category 4 Hurricane when it makes landfall, Ike is poised to be a much greater threat to life and property than Gustav turned out to be.
http://www.rigzone.com/news/hurricanes/ike.asp

US July trade deficit widens to $62.2 bln vs $58.0 bln expected
The increase in petroleum products imports was driven by both price and volume. The average price of an imported barrel of oil rose 6.4% in July to a record high $124.66.

But the US also imported just over 342 million barrels of oil in July, the most since June 2004 and up 15% from last month. This led the US trade deficit with OPEC countries to surge 33.6% to $24.2 bln.

The politically sensitive US trade gap with China was up 16.1% to $24.9 bln, and the US trade deficit with Europe and the entire Pacific Rim also grew sharply, by 19.6% and 22.5% respectively.
http://www.forbes.com/afxnewslimited/feeds/afx/2008/09/11/afx5412963.html

July trade deficit widens on surge in oil imports
The trade figures are seasonally adjusted but are not adjusted for price changes. After adjusting for inflation, the real trade deficit rose by 2.7% in July from a seven-year low in June.

The real trade gap is what counts for gross domestic product. The increase in July indicates trade may not contribute as much to growth in the third quarter as it did in the second.

Exports have been keeping the economy afloat, as consumer spending and business and housing investment slumped. Net exports contributed to second-quarter GDP more than at any time in the past 28 years.
http://www.marketwatch.com/news/story/july-trade-deficit-widens-surge/story.aspx?guid=%7BE3AE2FCB-9E2D-4FD7-951C-1D72168326DB%7D&dist=msr_1

This latest trade deficit report should have sent the Dollar reeling. But it was pooh-poohed by the media because since July Oil prices have been falling, and the deficit should soon begin shrinking. If the US Economy is being held together by it's exports, and global growth is slowing, why do people believe export growth will continue. Particularly in light of the Dollars recent strength? I don't know. I'll ask Dorthy when she gets back from Oz.

Lay Offs Coming?
The evidence that sales at many companies are struggling and that employment will suffer are almost everywhere. Recently, a division of GMAC said it would let 5,000 people go. According to MSNBC, "Job cuts announced by U.S. employers last month jumped 12 percent over a year ago to cap the busiest summer of downsizing in six years." Job cuts through October could top what they were for all of 2007.

The economy is beginning to look like it did during the deep recessions in the early 1990s and 1973. Eric Rosengren, the president of the Boston Federal Reserve Bank, sees the situation getting much darker in the second half. Speaking of deteriorating financial conditions he said, "It may push the unemployment rate up to 6%, with more than 2 million people losing their jobs since the financial turmoil began last summer.".

If the economy tips closer to what it looked like in '73, unemployment could be closer to 8% or 9%.
http://www.247wallst.com/2008/09/a-dozen-compani.html

Don't Rule Out Another Fed Rate Cut This Year
Though there’s virtually no chance the Fed will change interest rates at its meeting next Tuesday, there’s a growing likelihood it will make subtle changes in the language of its policy statement, placing greater emphasis on the risks to growth than the threat of inflation.

And that may be the first step in a stunning policy reversal that could lead to yet another interest rate cut at the end of this year or early 2009, a move widely considered out of the question as little as a week ago.

With both the labor market and consumer spending behaving worse than expected and the economic growth of the second quarter likely to peter out sometime in the following two quarters, the Fed’s aggressive rate cutting earlier this year looks unlikely to achieve a soft landing.

The FOMC statement could “set the stage and give themselves some flexibility,” says veteran money manager James Awad, managing director of Zephyr Management. “I think they absolutely could” cut rates, particularly if things looked "dire" around the holiday shopping season.
http://biz.yahoo.com/cnbc/080911/26656722.html

And from the "I Thought The Fannie/Freddie Bailout Fixed Everything" Department:

Washington Mutual stock falls 14 percent Thursday 10:24 AM CTDallas Morning News, TX - 2 hours agoBy BRENDAN M. CASE/The Dallas Morning News Washington Mutual Inc., a Seattle bank with 2500 employees in this area and three prominent North Texans on its ...
Washington Mutual plummets below $2 a share Reuters
Washington Mutual Shares Down 29% New York Times

Wachovia shares falter as investors remain on edgeForbes, NY - 1 hour agoAP 09.11.08, 12:16 PM ET Shares of Wachovia Corp. dropped Thursday, as Wall Street's anxiety about the stability of the financial sector - specifically ...
Stocks manage a modest gain CNNMoney.com
Lehman's New Dive Signals Financials Still In Eye Of Storm Investor's Business Daily
US close: Dow sinks as euphoria fades ShareCast

Lehman Brothers shares plunge 40%BBC News, UK - 2 hours agoShares in troubled US bank Lehman Brothers have plunged again on fears over the future of the bank. Lehman announced the biggest loss in its history on ...
Lehman, WaMu tumble at market open on capital fear Forbes
Washington Mutual stock falls on investor fears International Herald Tribune
The Vultures Keep Circling Wall Street Journal Blogs

Yep, better get up again tomorrow and sell all my Gold and Silver, buy the US Dollar, and invest in financial stocks. Yeah, that's the ticket. Wow, this is a long line...I hope there is some of this stuff left when I get to the window.

The Dow, Nasdaq, and S&P mostly fell in early trade on more financial worries as Lehman fell another 40% on news that CEO Dick Fuld is trying to sell off the entire company in order to keep any or all of it operational. Washington Mutual was also a notable weak stock as it fell about 10% to near $2 a share, but all three stock indices rose in late trade and ended with over 1% gains on optimism that a deal to save or acquire Lehman will be announced soon.
-goldseek.com

Good Luck, and have a pleasant tomorrow.