Mover Mike

Maxedoutmama has a follow-up and further research on the new Medicare Drug Plan and the risks to your health coverage that I posted about here.

Medicare News and Politics

Hat Tip to Amy Welborn:

(Marvel) Kunkle, a self-described "cradle Catholic," has attended St. Peter Catholic Church in west Eugene (Oregon) for 40 years. Because she's among the 390,000 Catholics who live in Western Oregon, she's also a defendant in the Archdiocese of Portland's bankruptcy case.

In a legal maneuver, the archdiocese in July listed all 390,000 parishioners as class-action defendants in the bankruptcy filing, made last year as the church struggled to respond to more than 200 claims of sexual abuse by priests.

Kunkle and every other local Catholic has until Monday to formally "opt out" of the class action. But few have, in part because of a Catch-22: Attorneys for alleged abuse victims have said they probably will name any parishioner who opts out as an individual defendant.

It seems that abuse victims have sued the archdiocese, and it has been argued that assets of parishes are excludable.

...the Diocese of Spokane, which also has filed for bankruptcy, argued that about $40 million worth of disputed property belonged to parishes, not the diocese, and thus is immune from creditors. The judge disagreed.

Why woould you deliberately involve your parishioners in a class action lawsuit?

Catholics bankruptcy News and Politics

Something is not right, From the SacBee, Judith Miller, reporter for the NYT, is released from jail after 85 days. She refused to give up her source in the Valerie Plame investigation.

In a prepared statement Miller said that her source - identified by the Times as Libby - had released her from her promise of confidentiality.

But Libby's lawyer said Friday he and his client had released Miller long ago to testify, and were surprised when Miller's lawyers again asked for a release in the last few weeks.

"We had signed a waiver more than a year ago," Attorney Joseph Tate said.

You would think Miller would have known she was given a waiver to testify before serving 85 days in jail. Who else is she protecting?

Judith Miller Valerie Plame News and Politics

Update:

According to Breitbart.com, Although Miller declined to identify her source, The New York Times identified him as Lewis "Scooter" Libby, chief of staff to Vice President Dick Cheney.

First Russia is selling arms to Iran, now from the Guardian

Tony Blair and John Reid, the defence secretary, have been holding secret talks with Saudi Arabia in pursuit of a huge arms deal worth up to £40bn, according to diplomatic sources.

Not only is the CPI nuts, but so is the world!

Saudi Arabia News and Politics

When the Consumer Price Index (CPI) is announced ewach month, we are told the total increase for the month, then food and energy are stripped out to give us a "core" rate of inflation. I have argued that we are experiencing a general rise in prices that is not reflected in the price of gold. The price of gold has risen in four years from $250 per ounce to $475, but based on the historical price relationship to oil, should be selling at least twice its current price. (According to the "rule of 72", if something doubles in four years, its compound rate of return is approximately 18% pwe year! Have your investments compounded at that rate for the last four years?

Now to support my thesis that the core rate is misleading, FURNITUREToday has an article China factories hardly immune to higher costs.

“Right now, we’re more concerned about the cost of oil than anything,” said Steven Lee, president of dining and occasional furniture manufacturer Winny Overseas Ltd., with a factory in Zhongshan, in Guangdong Province. “The cost of oil affects the cost of everything.”
That includes anything from his power bill to shipping and related transportation costs. Since 1997, he said, gasoline costs have risen 400%.

The cost of Asian woods have increased 20%, so manufacturers are importing more US hardwoods. Shipments are up expected to be up 45% in the next six months.

Metal and steel costs, however, always seem to go up, not down, he said. He estimated that metal prices today are double what they were just two years ago.

Much of the furniture sold in the US is Chinese made and that could ultimately raise the price of Chinese-made furniture.

In a related article Shipping costs rising again, On Oct. 1, furniture importers will pay increased fuel surcharges, commonly known as the emergency bunker adjustment factor (EBAF).

The EBAF will rise from $410 to $455 for a 40-foot container, a 10.9% increase, and from $460 to $510 for a 40-foot high-cube container, a 10.8% increase. The rate for a 20-foot container will rise from $310 to $345, up 11.3%.

This is the second time since July the rates have risen and those increases don't include inland transportation costs that have also risen.

To exclude food and energy from your CPI calculations is nuts. We are being affected by a variety of price increases that start with our rising cost of energy. Soon the price of gold will also reflect what we all know is true. Prices generally are rising at a much higher rate than our government is telling us.

gold inflation News and Politics

Who is 990N?

Check out Maxedoutmama! She has a rundown of the latest news about H5N1 - Bird Flu. She points to Recombinomics. In one of his latest news updates he says:

The clustering of cases is cause for concern.
[...]
These growing clusters, and clusters of clusters, signal a pandemic phase 5, which is getting close to the final phase 6.

What are the last three phases of a pandemic?

Phase 3. Human infection(s) with a new subtype, but no human-to-human spread, or at most rare instances of spread to a close contact. Goal of health organizations: Ensure rapid characterization of the new virus subtype and early detection, notification, and response to additional cases.

Phase 4. Small cluster(s) with limited human-to-human transmission but spread is highly localized, suggesting that the virus is not well adapted to humans. Goal of health organizations: Contain the new virus within limited foci or delay spread to gain time to implement preparedness measures, including vaccine development.

Phase 5. Larger cluster(s) but human-tohuman spread still localized, suggesting that the virus is becoming increasingly better adapted to humans, but may not yet be fully transmissible (substantial pandemic risk). Goal of health organizations:Maximize efforts to contain or delay spread, to possibly avert a pandemic and to gain time to implement pandemic response measures.

Phase 6. Pandemic: increased and sustained transmission in the general population. Goal of health organizations: Minimize the impact of the pandemic!

H5N1 Bird Flu News and Politics

Regime Change Iran has some disturbing news:

Russia is intensifying efforts to sell weapons to Iran while such sales remain legal.

Russia's goal is to sell as many weapons as possible to Iran before an embargo.
Russia wants Iran to be well-armed to bog the US down.
The US is making preparations to resolve the conflict by force.

Iran Russia News and Politics

New drug benefit sign-up has a risk says SacBee.

Marketing campaigns for Medicare's new prescription drug benefit plans are set to start Saturday. Advocates for seniors are worried that the benefits will be attractive enough to get seniors to sign up without first calling their HMOs.

[...]

Seniors who are members of managed care health plans and then enroll in a drug plan offered by another organization could be dropped from their health plan, according to health plan and Medicare officials.

Before signing up for Medicare's new prescription drug plan, check with your current plan! You could end up with no health coverage, except for drugs.

Medicare News and Politics

Update:

Gold traded today at an 18 year high! As I posted here, big money is moving into gold and precious metals. Now Rob Kirby tells us that Ibbotson Associates

generally accepted as and referred to in the investment industry as the quintessential authority on what optimal asset allocation is or should be – period!

did a study of including precious metals investments in portfolios and found

“that precious metals performed best when they were needed the most by providing positive returns during the years that traditional asset classes had negative returns. Ibbotson determined that investors can potentially improve the risk-to-reward ratio in conservative, moderate and aggressive portfolios by including precious metals bullion with allocations of 7.1%, 12.5% and 15.7% respectively.”

[...]

No one in the investment community should underestimate the importance and potential effect of this study.(emphasis added)

gold Ibbotson

Who is 990N

Update:

From the WSJ,

Investigators combing through Fannie Mae's finances have found new accounting violations, including evidence that the company may have overvalued assets, underreported credit losses and misused tax credits, according to people close to or previously involved in the inquiries.

[...]

the people indicated that the alleged new accounting violations were designed to embellish the company's earnings and are in addition to the violations that the company and its regulator have already disclosed.

[...]

News that investigators may have found new accounting irregularities triggered a selloff in Fannie Mae stock, which dropped 11%, the largest percentage decline since the stock-market crash of 1987. The stock was off $4.99 to $41.71

Fannie Mae

Who is 990N?

Argentina went through a currency crisis in 2002, that effectively devalued its currency in relation to the USD by 70%. Today, The Daily Reckoning has a description of a visit to Argentina and I was struck by this lunch for 12!

Everything is cheap in Argentina. Yesterday, we had lunch on the verandah of a restaurant in the little town of Angustaca. A party of 12 ate steaks and pork cutlets, French fries and salad - lavaged down with coke and bottled water. The bill came to $27 for the whole group. First, we thought the waitress had made a mistake; we demanded a recount. The math was checked, but failed to raise the total.

The country's scenery puts in on my list of "must visits"!

News and Politics Argentina

There could be many cold winters coming along with even higher gas prices. From the Financial Times,

Hurricane Rita has caused more damage to oil rigs than any other storm in history and will force companies to delay drilling for oil in the US and as far away as the Middle East, initial damage assessments show.

[...]

aid Tom Marsh of ODS-Petrodata. “The path Katrina took was through the mature areas of the US Gulf where there are mainly oil [production] platforms. Rita came to the west where there is a lot of [exploratory] rig activity.”

[...]

Initial reports from companies are ominous. Global Santa Fe reported it could not find two of its rigs. Rowan Companies reported four rigs damaged, with two having moved, one losing its “legs” and the fourth presumed sunk. Noble has four rigs adrift, with two run aground one into a ChevronTexaco platform.

rita katrina oil

From Twincities.com,

And worrying about keeping your home just because it's in a nice location is a heck of a way for a person to live.

79-year-old Olive Taylor, has lived across from Loeb Lake and Marydale Park in St. Paul since 1905 and is safe today from the city's use of eminent domain only, because the developer had a heart and grew up in a neighborehood like Taylor's. But Taylor lives on a

nice piece of property. Too nice for a 79-year-old woman when it just happens to sit between a park, a 9-acre city lake and a proposed townhouse development. Sure would make a nice greenway to the park for the townhouse folks

There is only you and me that can stop the city and the next developer from using the power of eminent domain.

And worrying about keeping your home just because it's in a nice location is a heck of a way for a person to live.

eminent domain

A dog park buddy described going to a park on Portland's westside and seeing an amazing number of small birds, Swifts, that make a chimney a home on their way to Central America.

Near upper Northwest Pettygrove Street, this nightly experience has been happening for a couple of weeks every September since the early 1990s. That is when anywhere from many hundreds to more than 30,000 of these Vaux's swifts — this "Vaux" rhymes with "Box" — started using Chapman's chimney as a September hotel before flying on to Central America.

Bev, Ralph the dog and I drove to the area last evening and discovered a whole new world. On the hillside behind the chimney were hundreds of people sitting on their blankets, pulling out their picnic dinners waiting for the swifts to appear. About 6:30 PM, we started to see small birds swirling in the air. As we got closer to 7:00 the numbers of birds grew to many thousands, dipping and diving around the chimney opening.

The literature says they eat and drink and copulate in flight, migrate twice a year, whirl by the thousands down big chimneys for the night, sleep vertically wing-to-wing with feet that grip the bricks like Velcro. Hawks snag and carry them off to eat.

The sun dropped behind the west hills and a hawk flew through the swirl.

Then as if on command, the birds started flying down inside the chimney forming a large tornado all the birds moving counter clockwise. By 7:20 the air was mostly quiet as we picked up our belongings and headed home.

Quite a relaxing way to spend a small part of an evening with my wife and dog.

portland nature swifts

Update:

From the Washington Times, Mississippi residents return to face unknown.

For the first time since the storm, a slight degree of normalcy has begun to return. But progress is slow. The economy remains all but nonexistent for 15,000 residents of Bay St. Louis and neighboring Waveland -- both on the Gulf of Mexico, 45 miles northeast of New Orleans.

[...]

Although official numbers are still being calculated, some authorities estimate that more than 170,000 dwellings were destroyed by Katrina in Mississippi's six southernmost counties. (emphasis added)

[...]

homeowners and renters can borrow up to $40,000 for personal property damage and homeowners can borrow up to $200,000 to repair or replace houses.

If my home was destroyed, I would hope that insurance would pay me for the house. I can't imagine the financial stress of paying for the old mortgage and borrowing an additional $200,000!

rita katrina

From the OCRegister, California Pension Crisis

"California officials have awakened to the sobering reality of the massive long-term debt they created," reported an investigative news story in the Sept. 25 Los Angeles Daily News. The total cost is at least $110 billion statewide "in coming years to pay for promised retiree pensions, health care and workers' compensation benefits."(emphasis added)

How many other states have this problem? And how many are doing what Oregon is doing. The state's OIC lost money, and is issuing municipal bonds to make up the losses. As Ron Ledbury reported

Our Metro and Port of Portland just issued bonds to cover liability for OIC's investment losses for which there was no legal requirement to cover.

Someday soon, we are going to get outraged at the government's inefficiency!

News and Politics

From TBO.com, Judge Rules Gay Couples Can Receive Health Insurance Benefits. In Michigan last November voters passed a constitutional amendment

that made the union between a man and a woman the only agreement recognized as a marriage "or similar union for any purpose."

[...]

In Tuesday's ruling, Ingham County Circuit Judge Joyce Draganchuk said the purpose of the amendment was to ban gay marriage and civil unions - not to keep public employers from offering benefits to gay employees.

So for a gay couple, living together, according to this judge, health insurance can now be provided to the partners of the gay employees, the same as if they were a married couple, living together. Would a heterosexual couple, not married, but as equally committed to each other as the gay couple, also get to share health insurance?

I'm sure the insurance companies may have something to say about this. Does the government offer the same benefits to heterosexual couples or do they need to be married? If they need to be married, then I suspect there are good grounds for the heterosexual couple to sue on the basis of discrimination. If they lose health benefits because they are not married, then that seems to put gay couples back to square one.

I have no position on the issue. I only observe that as our society changes, the laws have a tough time changing to keep up.

gay marriage

Oh man that's great! From Hyscience, Umbilical Cord Blood Stem Cells Treat Spinal Cord Injury.

A female patient lost use of her legs 19 years ago (Complete paraplegia of the 10th thoracic vertebra.)

[...]

Not only did the patient regain feeling, but "41 days after [stem cell] transplantation" testing "also showed regeneration of the spinal cord at the injured cite" and below it. "Therefore, it is suggested that UCB multipotent stem cell transplantation could be a good treatment method for SPI patients.

stem cell

The Oregonian carries in the business section an article from the New York Times News Service: Bankruptcy hurdles follow hurricane. The new stricter personal bankruptcy law is to take effect on October 17 and is "likely to deliver another blow" to those already hit hard.

Under the old law debts can be cancelled quickly, the new law, however, make those with higher incomes pay debt over a number of years. In order to beat the deadline, hurricane victims must:

* - File in their hometowns due to residency rules.
* - Find an attorney
* - Most will not know for months if they need to file, then it will be too late
* - Then, pass a means test, which "requires debtors to provide an estimate of their income by taking an average of their most recent six months' earnings".
* - Undergo required credit counseling before filing for bankruptcy!
* - If that is not enough, records must be produced.

My concern after talking with Rod, a local bankruptcy attorney, is the downside. What happens to those who can't pay and can't discharge the debts? Do they go underground and live just in a "cash" society?

rita katrina News and Politics

Check out Maxedoutmama's Indonesian Bird Flu (H5N1) Update 2! It appears that there may be human to human spreading and that H5N1 is spreading throughout Indonnesia.

Bird Flu H5N1

One idea floated to get people in the Katrina and Rita area back on their feet is to give them priority on the construction jobs. According to Barrons, that may not work as we hope.

A 2004 study by Steven Camarota, director of research at the Center for Immigration Studies, suggests that immigrants are steadily pushing native-born Americans out of the construction industry. The decline in native employment, he says, is most pronounced in states with the biggest influxes of immigrants, including some along the Gulf Coast.

Ironically, the storm will delay progress on several immigration-control bills until next year. Meanwhile, reconstruction efforts are proceeding, and President Bush has suspended the Davis Bacon Act, which sets a wage floor for federal projects in different U.S. regions. Critics claim this will invite contractors to hire illegal immigrants, who will work for much less than U.S. citizens.

rita Katrina News and Politics

ON Sept 19th, I posted here about municipal bonds, asking who is going to pay the interest if your tax base is wiped out by Katrina or Rita?

The aftermath of Hurricane Rita is seen over Campron, La., in this aerial photo made in a U.S. Coast Guard helicopter

Now Congress is considering bailing out, with your money,

municipal bondholders affected by the vicious storm. Many cities and authorities that were in the path of Katrina (or Rita) may be unable to meet interest payments come Oct. 1, because they can't collect the taxes needed to meet these obligations. The federal government is mulling some kind of guarantee, valid through the end of 2006, that would keep the issuers from defaulting.

[...]

The bailout idea appears to have originated with the National Association of Bond Lawyers in its Sept. 7 letter to both the Department of the Treasury and the Internal Revenue Service (Re: Hurricane Katrina Relief and Rebuilding-Municipal Market Needs).

"Preventing defaults by these issuers will be an important step in maintaining investor willingness to supply new funds for the reconstruction effort that will be required," the letter said. NABL President Walter St. Onge III, of Palmer & Dodge in Boston, observed that similar steps were taken in the mid-1970s to bail out a bankrupt New York City.

Several things come to mind:

Those bonds have taken a big hit to their price. A Federal Guarantee will make some humongous profits to any Wall Street firm that has bought those bonds at these depressed levels in anticipation of a bailout!

In the future any municipal bond offering in a natural disaster risky area, will essentially be a AAA credit, and now we can get malinvestment. Projects that could never be considered due to their risk, now can be built. Remember the S&L debacle. Loans were made and you and I bailed them out through FDIC and FSLIC.

There will be no risk premium for a project. Projects that would not pencil out will be built, again raising tax payers risk.

A federal guarantee in the case of Rita and Katrina absolves Wall Street from the liability of not adequately laying out the risks of natural disaster to prospective bond buyers.

The bailout will also bail out the likes of AMBAC, MBIA, FSA, and FGIC. They can insure anything now, collect the premiums and then wait for the federal government to bail them out.

And last, but by no means all, we as tax payers are subsidising, I won't call it stupidity, but risky behavior. We are saying, go ahead and live in flood plains and cities below sea level and we'll bail you out. Maybe that is something we want to do, but surely there should be debate on the matter. Looking at the picture of Campron, La. (above) makes my heart ache for the people who lost everything. Now the federal government will want to make Wall Street whole and my pocketbook ache!

rita Katrina News and Politics

Who is 990N?

From the SacBee, Bail OK'd in Lodi terror case

A federal magistrate judge in Sacramento on Monday ordered Umer Hayat, the Lodi ice cream truck driver charged with lying to the FBI about his alleged terrorist connections, released on $1.2 million bail and placed under house arrest in his home.
[...]
(Umer Hayat's 23-year old son) Hamid Hayat, was indicted Thursday on a terrorism charge, the first such charge in the ongoing FBI investigation of alleged terrorist activity centered in Lodi. Hamid Hayat pleaded not guilty Friday to "providing material support to terrorists" and making false statements to the FBI.

Lodi

Sadly, Ron Franscell has it right. Rita will fade from the news. as we all move on to the next controversy or next natural disaster. Oh sure, my local news here in Portland, Oregon led with the wreckage left in the wake of Rita, but I see it in the traffic to my site.

Meanwhile, it is those reporters in the communities that have been flattened that will continue to report on the aftermath of Rita and Katrina. They will be reporting on the rebuilding, on the pets that didn't come back, on the people who just up and moved away. They will be reporting on the courage it takes to rebuild when all has been taken away, and they will be reporting on those that lost everything, but found that being alive is all there is.

I will be checking back with Franscell from time. I want to know better the man who had the courage to keep doing what he must love to do. rita

From the TimesOnLine

“ ‘We have lost control’ (of the Federal Budget), that was his expression,” M Breton said as he outlined the Fed Chairman’s private comments.
[...]
Thierry Breton, France’s Finance Minister, speaking to reporters in Washington, made the claim after a closed-door meeting with Mr Greenspan, the Federal Reserve Chairman, and John Snow, the US Treasury Secretary.

If true that is quite a statement coming from the Chairman of the Federal Reserve! A senior US official said something was lost in the translation and The US Treasury also rejected any suggestion that the deficit was out of control.
I suspect that Greenspan wants to avoid all blame for any dire economic consequences after he leaves office in January, 2006.

Greenspan

From Mark Rauterkus & Running Mates ponder current events asks how is what Chavez in Venezuela different from eminent domain as practiced in the US?

Chavez signed executive orders in January, 2005 that established the legal framework for the government to seize private properties it considers unused, and to distribute them to poor farmers and workers.

KarensKorner has some new outrages about Katrina and NOLA.

Doctors from across the United States poured into Louisiana to offer their services in shelters and hospitals treating Katrina's victims. They could do nothing. They just sat. You see, they weren't licensed to practice medicine in Louisiana. It took the amazing Governor of Louisiana, Kathleen Blanco, five days to sign a waiver to allow these doctors to practice medicine in Louisiana. Five days, while people were suffering and dying. Don't blame Blanco, though. It was clearly Bush's fault.

Little Bit Tired, Little Bit Worn has some nice side by sides and commentary about the muslim who wanted to bring down a jihad on Burger King.

Espresso Roast is reviewing part of Nancy Pearcey’s book, Total Truth Total Truth as it relates to intelligent design. This is an excellent book that I have been working through as well. Some day I may even write a review on this book.

Eminent Domain Hurricane Katrina Christianity

After so much heavy news, time for something different. From the Manchester Evening News, Lemons 'can stop the spread of HIV' Prof. Roger Short, a leading academic in sexual health says

"When I spoke at an annual lecture in her (Marie Stopes, who set up the UK's first family planning clinic in 1918) honour in 1995 I was astounded to find that in those days lemon was a common contraceptive. Then in 2001 I found the acidity kills HIV, and could be developed into a microbicide.
[...]
During his research Prof Short has visited the city of Jos in Nigeria, where prostitutes routinely use lemons both as a contraceptive and to ward off sexual transmitted disease.
[...]
He now plans to try out the theory at a family planning clinic in Thailand, where he has convinced more than 100 people not infected with HIV to have unprotected sex with their partners to test the contraceptive qualities of the fruit.

Wouldn't it be wonderful if a little tart could kill the AIDs virus!AIDs

From the News.Telegraph, Breast cancer more likely in left-handers

Women who are left-handed are more than twice as likely to contract breast cancer before the menopause as right-handed women, research has found.

Scientists believe the cause may lie in the exposure to high levels of sex hormones before birth which can induce left-handedness as well as changes in breast tissue.

Ron Franscell checks in. He is safe and tells about the water that was coming into the 2nd floor of the building in In Rita's wake. Ron we are glad you and your friends made it through in good shape. I look forward to seeing your pictures.

A Beaumont street is flooded and power lines are left dangling after Hurricane Rita hit the area Saturday. rita

Update:

From time to time I comment on "troubled companies" of which GM is part. The Watchful Investor points out something new to me about GM:

When GM spun off Delphi, they promised to pay for any part of the pension program that the PBGC refuses - including medical benefits. This would be a disaster for GM. They have tremendous pension and retiree benefits expenses, and a huge underfunded position in their plan. They've had good sales this summer, but it's been a while since they've made any profits on automobiles. Now they may have to assume another $10 billion in liabilities to cover Delphi's problem. Not a good time to be a GM shareholder.

GM Business

Are the MSM concentrating on Galveston and Houston and not showing the damage where the eye of Rita came ashore?

The aftermath of Hurricane Rita is seen over Calcasieu, La., in this aerial photo made in a U.S. Coast Guard helicopter

This aerial photo taken from a U.S. Coast Guard helicopter shows a damaged and flooded church in Campron, La.

The aftermath of Hurricane Rita is seen over Campron, La., in this aerial photo made in a U.S. Coast Guard helicopter

This aerial photo taken from a U.S. Coast Guard helicopter shows damage and flooding in Sweet Lake, La.

This aerial photo taken from a U.S. Coast Guard helicopter shows damage and flooding in Gibbstown Bridge, La. rita

The SacBee (free registration required), Silsbee, Texas takes a big hit.

Sacramento Bee/Bryan Patrick
A food market in Silsbee, Texas was damaged when Hurricane Rita roared through town on Saturday, Sept. 24, 2005.

...it was towns and cities to the east, such as Silsbee and Beaumont in Texas and Lake Charles, La., that ended up reeling as Rita swept through as a Category 3 hurricane early Saturday.

A huge swath of southeastern Texas and southern Louisiana was without electricity, with no word when it would be restored.

All along the roadways, from the wooded stretches of southeast Texas to central Louisiana, entire pine forests appeared to have been snapped in half by the force of the winds. The highways were tangled with fallen trees - pointing northward - and downed power lines. Horses and dogs wandered the roadways, as well.

It could have been worse!

Despite the wreckage, no injuries or deaths were reported as of Saturday.

Do you think the storm was over hyped? I don't. Near 5 Million people were in the path of Rita and in the last few hours the hurricane moved east sparing Houston and Galveston. It also could have hit NOLA, but didn't. And it made landfall as a category 3 down from a 5. All in all, not as devastating as Katrina, but don't tell that to people in Silsbee and Beaumont and Port Arthur and Lake Charles. rita

The SacBee has stories of people who got stuck in the Pinewood Inn in Silsbee, Texas. Shondon Hearns and his family

had been driven from their homes in New Orleans by Hurricane Katrina, lived two weeks in a shelter in Beaumont, Texas, then had to relocate when the shelter closed.

Hearns found a job and the family went back to NOLA and packed up their belongings. When they came back to Silsbee in a rental truck, the town had been evacuated. So they ended up at the Pinewood Inn, guests of the American Red Cross.

John Allen is 44 and manager for Wal-Mart's pet division. He lived in a mobile home and figured the brick clad Pinewood Inn would offer greater protection.

Paul Jackson a bus driver for the local school district lived in house surrounded by Oak trees. He figured the Pinewood Inn would be safer.

See the rest of the images by Rick Hodges here.

Most had tried to move on, but had been stuck in traffic five hours to move 9 miles.

Thousands of Texans trying to flee the coastline Friday found themselves stalled or stranded by a simple lack of gasoline.

The sheer crush of evacuees moving inland overwhelmed a system that Texas authorities had hoped would contrast sharply with the government response New Orleans experienced with Hurricane Katrina.

Officials in Texas had worked for days to persuade residents to leave their homes, and had reversed the traffic flow on Interstate 45, the major highway from Galveston through Houston to Dallas, so that lanes on both sides could be used for northbound evacuees.

But by early Friday, Interstate 45 resembled a parking lot near Dallas.

I can't imagine the horror of evacuating your home, leaving possessions behind, not knowing if the house will be there on your return, only to be trapped in a traffic nightmare, listening to the radio urging you to get out! Meanwhile, Hurricane Rita is on your tail.. rita

20,000 may have ignored Calcasieu evacuation orders says The Daily Advertiser.

An estimated 20,000 people stayed in Calcasieu Parish as Hurricane Rita approached despite mandatory evacuation orders, the parish’s emergency preparedness director said tonight in Lafayette.

[...]

Winds of up to 100 mph are expected to rip across the parish until sometime between midnight and 6 a.m.

Good news on damage estimates says SciGuy at the Houston Chronicle. Estimates for total damage have dropped from $10 Billion to $2.83 Billion

From the WSJ, a casualty of Katrina:

Entergy Corp. sought federal bankruptcy-court protection for its New Orleans utility unit after calculating that the costs of rebuilding the electric system crippled by Hurricane Katrina exceed what the utility's customers can afford to pay.

Rita

Update:

rita

Ron Franscell checks in from Beaumont, Texas:

Last post tonight, and maybe the last for a while. Power is getting tenuous.

~~~~~~~~~~~~

The squalls have arrived. Winds are steadily increasing, the lights flicker occasionally, rain drums an incessant bass line against the masonry skin of our building, the windows bulge with every gust, a transformer on the corner detonates in a shower of sparks ... and we're only in the tune-up. The prelude comes in a few hours, and the violent first movement a few hours after that.

We have taken a head count and everyone is safe. Now that night has fallen, we can take stock and plan, to some degree, the next move. As stories are filed, they are edited and quickly posted at our Web site and sent to our shadow desk in Houston for the paper-newspaper that will come out tomorrow just hours after Rita makes landfall. We shifted our normal morning cycle to midday so the newspaper could contain some of the first daylight images of Rita's wrath.

Galveston's electricity has been dead more than an hour, but we're still on here. We've adopted the rhythms of impending calamity, like a guy with exactly 12 minutes to live. We get a series of little shots to get this right, and each one presents a new challenge. We are one a short runway and there's no scrubbing the take-off.

Tonight, a Time Magazine reporter asked me if I was afraid. I am, a little. But it's more a tool than a handicap. It's how I know I haven't lapsed into a mechanical existence. It's the pulse of my survival instinct. And it's not always a fear of the things I can't control; it is also a fear of failing at the things I can control.

On a newsroom bulletin board — the old-fashioned kind made of cork — somebody posted an advisory note that ran on the New York Times news wire tonight: Editors, we commend to your attention storm coverage from New York Times News Service partner news organizations, including Hearst Newspapers and Cox News Service, but especially articles from The Houston Chronicle and The Beaumont Enterprise, two Hearst papers in the path of Hurricane Rita. Their unique perspectives lend an authenticity to storm stories that cannot be matched.

Spirits rose. Somebody is seeing. Still, I'm not sure why we think we might deflect a 500-mile wide hurricane by throwing a scrap of paper worth 50 cents at it. Maybe it's like some many things we do in life: It just makes us feel that we did something.

I'm not inclined to give it too much thought tonight. Maybe another time, after the pieces are picked up.

The lights went out in Galveston an hour ago, but they're still on here, so there's a precious moment to do one more thing. Post a blog entry. Visit one of the frightened dogs somebody bivouacked in the darkroom. Answer an e-mail from a concerned friend. Call my son in Wyoming and reassure him that we'll be OK. The hard work will be sleeping.

rita

Here's something interesting I picked up at the Weather Underground by Steve Gregory that explains why Hurricane Rita may stall after making landfall and bring 20-30 inches of rain to the Texas/Lousiana area.

By Sunday morning, the GFS (stands for Global Forecast System and is a US-developed weather modelling system) brings the storm - then likely to be near Tropical Storm intensity - northward to north central Louisiana. Very reasonable looking, and close to what the NHC is already forecasting.

Here's the issue — by Monday, the upper level ridge, with one high pressure center located over west Texas - and another center in the Bahamas — will start to strengthen — and block the forward motion of the storm. All the models agree on this aspect. What they differ in, is the precise location and evolution of the weak steering currents that will result.

In the case of the global GFS model -considered the best available when forecasting large scale motions of storms beyond 2 days — brings the surface low back to the coastline by late Monday night. (emphasis added) Through this entire period - WSW Saturday through Monday severe heavy rainfall will occur across LA, and east Texas.All the models agree on this forecast, and NHC agrees as well - as reflected in their own forecast for 25:" of total rainfall possible during this period.

By Tuesday evening the GFS has continued to show the upper and surface low -- (RITA's core circulation) moving back along the coast of Texas. Will this happen? NO ONE knows. But after 2 major cycle runs in a row — it bears watching. No more - no less.

rita

Update:

I posted about storm surge. Dr. Jeff Masters' WunderBlog at the Weather underground carries this graphic on his blog:

A Liberal Blog, Majikthise, offers information about blogs covering the Hurricane:

Norbizness with some great insights.

The Houston Chronicle has a blog, Hurricane Rita

and

how now brownpau?

Blogs of War

Right On!

I hate to sound like a broken record here but, when in the heck are people going to wake up and take responsibility for their own actions and the consequences?

Blogging Fun

Another excellent site This Blog Is Full Of Crap has an excellent list of bloggers. rita

Update:

It may be a category 3 not a 5, but winds will still be 125 MPH or so.

Texas' emergency management coordinator, Jack Colley, predicted Rita would destroy nearly 5,700 homes in the state and cause $8.2 billion in damage.

Recall, too, that local officials in NOLA said of Katrina, if it comes in on the west side of NOLA, it could be disasterous. Well, it came in on the east side and everyone breathed a sigh of relief. Rita while missing NOLA and heading for Beaumont and Port Arthur, Texas, will still send the outer wall and storm surges toward New Orleans, where three levees have already failed!

StormTrack has an excellent map showing the projected track of the hurricane coming in on the east side of Houston and aiming directly at Beaumont and Port Arthur. It also includes all the oil investments in the area.

http://www.pannexresearch.com/rita/tx-oil.php rita

Update:

BEAUMONT, TX, 12:38 p.m. Friday, by Ron Franscell —

The sky has darkened. A brisk east wind is cutting through. NOAA reports Rita is starting to show some signs of fatigue, becoming slightly less organized. Such news has a context: It only gives hope that the deepness and severity of the impact could lose a bit of its edge, like a pulled punch. By Mike Tyson. Any tender mercy would be appreciated, but this will be anything but a gentle afternoon rain.

We're enjoying what will likely be the last few hours of electricity. Rather than drinking the cold sodas, I'm drinking the warm bottled water, thinking I might appreciate the remnant coolness of a soda in the dark, un-cooled bowels of the newspaper building tomorrow. In the books behind my desk, I came across a bit of pretty good Hemingway advice: Always describe the weather. I laugh. Small comforts.

We're continuing to gather information throughout the region, before we batten down the hatches. We're also getting calls from other reporters, editors and producers. I'm doing a live TV news show by phone to Moscow, Russia, in a few minutes. CBS called to confirm a report that we had an editor planning to ride out Rita in a bank vault. Not true, although one of our reporters will be among our emergency first-responders aboard a cargo ship in the Port of Beaumont when the storm hits. A wild ride with the people who'll deal first with the aftermath. The bank vault idea sounds a little Geraldo-esque ... maybe he can do it.

We are all girding ourselves for the job ahead. Katrina taught us many lessons. One was to be prepared to see something you never expected to see. Your workplace under water, your supermarket turned to twisted metal and rotting meat, your neighborhood reduced to scrap lumber, six feet of water in your bedroom, your barber's bloated corpse floating down Main Street. If it happens the way it happened three weeks ago, it's all possible and I wonder how we'll deal with it. Not in print, but in our hearts.

That's why we seek small comforts. A tiring storm. The promise of a cool (if not cold) soda in the dark. The possibility that after all the sound and fury, the place and the people will still be mostly whole, and we'll get back to telling stories a little more prosaic, a little more mundane than a Category 4 hurricane's first-degree rape of our place and lives.

Thanks Ron for keeping us informed. Be safe! rita

Update:

From the WSJ, China Widens Yuan Band from above and below the previous day's closing level of 1.5%, to 3%.

...the wider bands signal China's intent to continue pushing reform of its foreign-exchange system, and "a signal to local companies that they need to be better prepared to hedge their forex risk," said Arthur Li, head of Treasury & Forex for Mizuho Corporate Bank's Shanghai branch.

China

From the SacBee, Lodi terror charge added,

Government prosecutors upped the ante in the Lodi terrorism case Thursday with a new charge against defendant Hamid Hayat, alleging that he provided material support to terrorists by attending a jihadist training camp in Pakistan.

The latest indictment, returned by a federal grand jury Thursday morning, is the first actual terrorism charge leveled in the case.

American father and son, the Hayats

have pleaded not guilty to making false statements. Hamid Hayat will be arraigned on the new charge today.

Defense attorney Wazhma Mojaddidi acknowledged Thursday that the new charge against her client, Hamid Hayat, will make it much more difficult for him to gain release on bail.

The latest from Ron Franscell a newsman, looking down the barrel in Beaumont

We preside over a ghost town.

After midnight last night, I drove through the city's west side neighborhoods, to sweep through my house one last time, to find a safe spot for a few last, probably inconsequential things. The city-scape is barren. Distant headlights down boulevards and back streets dart like the illuminated eyes of nervous rats, too far away and too fleeting to offer any comfort that we are in this together. Each of us is, truly, on his own.

We know humans have clustered together in small groups and hidden spaces, hunkered down for what's coming. We know a few civilians have postponed their evacuation until today, in hopes traffic congestion will have eased. We know some won't leave. We know some first-responders — mainly police and firefighters — will ride out the storm aboard a ship in the Port of Beaumont. We know there are people in some local hotels, many of them reporters from as far away as the Los Angeles Times. We know that later today, after the sun has risen and set, some will seek sanctuary here. But none display themselves casually within the city now.

We see reports of people handing out water and gasoline along the evacuation routes. We also get tiny glimpses from the road: 10 hours to go 20 miles; women holding bedsheets at the roadside so desperate other women can get out of nearly-stalled traffic to relieve themselves semi-privately in front of hundreds of motorists; anxiety crackling over cellphones over how far will be far enough. We also heard stories — maybe apocryphal — of people traveling down back roads for hours only to be turned around and sent back.

We sent a handful of editors to Houston late last night. They'll not only provide support from the shelter of the Houston Chronicle, their evacuation reduces the number of our people here who must face the storm eye-to-eye. For me, that's a comfort.

The sun will rise in the next hour or so. Rita's vanguard — bands of rain and squalls spinning ahead — haven't begun, but they're coming. A fellow editor went for a pre-dawn jog, maybe the last chance he'll get to stretch his legs for a few days. We've begun stashing some food, bedding and other necessaries deep within our own building, away from windows and above the wildest flood stage, where we'll like spend tonight. Right now, Rita is expected to make landfall around the small coastal town of High Island then rumble north over us. At this time tomorrow morning, we expect to be under fire from Rita. When we can safely venture out to see what she wrought, I don't know, but it will be as soon as we feel we can do it safely.

Before Rita, our Features staff had planned a story for today about what appears to be an unusually busy hummingbird migration across Southeast Texas. Earlier this week, a reporter and photographer went to visit one birdlover's small farm, where literally dozens of hummingbirds had been coming and going all the time. When they arrived, the lady apologized that their numbers had mysteriously dwindled. So the reporter called a Texas expert on hummingbirds, and he wasn't surprised.

Even hummingbirds, he said in so many words, are smart enough to flee ahead of a hurricane.

rita

Update:

Let's start with 24 Elderly Hurricane Evacuees Killed In Evacuee Bus Fire. A mechanical malfunction in a bus being used to evacuate 45 elderly people, many on oxygen, from the Houston area, caught fire and exploded.

...the bus left a nursing home in the Houston suburb of Bellaire Thursday, headed for facilities in the Dallas-Fort Worth area.

The fire caused a 17-mile backup on a freeway that was already heavily congested with evacuees from the Gulf Coast.

StormTrack has the best analysis of the properties of Hurricane Rita and why hurricanes tend to lose power as they near land.

Hurricanes will often weaken before landfall as they ingest 'dry' air off of the continent. Rita is currently over a warm ocean eddy which is helping her maintain her wind speeds at 140 mph, for now. Rita's central pressure is way up to 930 mb, and she actual may be forming ANOTHER outer eyewall.

StormTrack is concerned that Rita will move inland near the border of Lousiana/Texas and then just sit there bringing 20-30 inches of rain to the area from Beaumont, Texas to New Orleans.

Speaking of New Orleans, Breitbart.com is reporting a dike has sprung a 30 foot wide leak and will likely flood those areas flooded before.

Water began seeping through the repaired section on Thursday but officials said they did not expect flooding on such a scale so soon.(emphasis added)

Are there no competent people living in Lousiana?

rita

Update:

A new update from Ron Franscell, Under the News, Hurricane Rita Watch: Day Four ... Nightfall

Check this comment from Don Jacobs newsman in Beaumont to Francsell:

From Don Jacobs, newspaper columnist in Beaumont ....

By noon Thursday, parts of Beaumont looked the way it did on Sunday years ago. Most all stores were closed as Hurricane Rita approached.

Dowlen Road was virtually vacant, post office doors were chain-locked, and a new drugstore featured the foreboding message, “Closed until further notice.”

Plywood covered glass windows in places, and crisscrossed tape sufficed for others. On Lucas, a man standing by a camper-covered truck seemed to be entreating a woman on her porch to leave.

At Parkdale Mall, newly-planted palms stood steadfast, too, for the present.

On College Street, a bedraggled guy clutching several bottles of wine weaved his way into some trees to wait out the storm.

Even as evacuating North Beaumont residents lined up to edge onto Concord Road, rumors spread that vandals already were breaking into homes left behind.

At the intersection of Eastex Freeway and Texas 105, police directed vehicles onto the northbound highway, but it was slow going.

Under a glaring sun in 99-degree heat, cars and trucks crawled along Concord. Some, thinking to find a shortcut, turned off at the rear of the Target store toward a jammed access road, only to return and seek re-entry.

A few impatient horns honked, but for the most part patience and a dread silence prevailed. A church van, obviously with no air-conditioning, crept along while someone held open a door to provide circulation.

Escorted by Beaumont Police Department cars, several buses rolled by filled with evacuees, and behind these, some cars pulled out of line trying to commandeer the left lane, only to be turned back.

Now and then, vehicles stopped off at a nearby store, only to learn that it was out of gas and shut down. The owner had locked up and fled with his family.

Some evacuees took the opportunity to relieve themselves behind the building, then retrieve liquid refreshments from iceboxes taken along.

One SUV with a surfboard on top was seen headed south on Concord, along with an 18-wheeler headed for who knew where, while northward evacuees drove all manner of cars and trucks, new and old. A motorcycle pulled a small trailer loaded with a pet cage, and a passing pickup contained a 4-wheeler and riding lawnmower.

After the radiator overheated on one vehicle, an irate rider decided to walk back home and strode down the road, but the driver talked her into waiting while he got the problem fixed. She sat by a ditch in the sun and wept.

Meanwhile, late in the afternoon, fleecy clouds over Beaumont were hanging in a blue sky, virtually suspended but moving ever so slightly to possibly get caught up in the tempest and return with a vengeance. donj37@hotmail.com

I can't imagine what it must be like to know a "freight train" of a storm is coming. Each new day brings it closer. Should you stay or go? What will happen to your home and all your belongings? If you are poor with your paycheck in your hand, but the banks closed, and you with no cash, how do you buy gas to get out of town? Where do you stay while you are on the road? How do survive in those first 72 hours after the storm? rita

Update:

It's about time! Carl Limbacher and NewsMax.com Staff Write President Bush: Bill Clinton Soft on Terror

"The terrorists saw our response to the hostage crisis in Iran, the bombings in the Marine barracks in Lebanon, the first World Trade Center attack, the killing of American soldiers in Somalia, the destruction of two U.S. embassies in Africa and the attack on the USS Cole," Bush noted, after getting an update on the war on terror at the Pentagon.

"The terrorists concluded that we lacked the courage and character to defend ourselves and so they attacked us," the president added, in quotes picked up by United Press International.

Four of the six terrorist attacks cited by Bush took place on Clinton's watch, with the first two coming during the presidencies of Jimmy Carter and Ronald Reagan. (emphasis added)

I posted about this before. We have been guilty of appeasement, and finally President Bush stood up to the terrorists. Perhaps if we had made a stand earlier we wouldn't be in this position today!

From KVUE, Officials fear highway 'death trap'

...the clogged roads and lack of gasoline could trap people in cars when the Category 4 storm packing 145-mph winds comes ashore Friday or early Saturday.

"If the hurricane comes in at a certain angle," said Houston Mayor Bill White, "being on the highway is a death trap."

[...]

By midday, most of Interstate 45 from Houston to near Interstate 20 in Dallas was restricted to northbound traffic on both sides, while I-10 from Katy to Seguin was restricted to westbound traffic.

Also jammed were the city's two major airports as people sought flights inland. The airports also suffered from a shortage of security screeners, as many had evacuated and not shown up for work. Officials brought in screeners from other cities.

(Hat tip to FreeRepublic) rita

Update:

Ron Franscell at Under the News, has just posted again: Hurricane Rita Watch: Day Four. He is sitting in Beaumont, Texas and the hurricane is heading right for his general area. Franscell is a newsman and with the storm making it almost impossible to put out the paper, the newspaper will go on line.

The NOAA's 10 a.m. Central forecast moved "Ground Zero" slightly east from the Bolivar Peninsula — only a half-hour southwest of us — toward Port Arthur, the port and petrochemical complex due south of Beaumont. It is a major component of our coverage area, a working-class city with some of the same socio-economic fragility that was exposed in New Orleans by Hurricane Katrina.

If there were no poor and no trailer parks, would there be hurricanes?

The latest from the NHC

RITA IS MOVING TOWARD THE WEST-NORTHWEST NEAR 9 MPH...15 KM/HR. A GRADUAL TURN TOWARD THE NORTHWEST IS EXPECTED DURING THE NEXT 24 HOURS. ON THIS TRACK...THE CORE OF RITA WILL BE APPROACHING THE SOUTHWEST LOUISIANA AND THE UPPER TEXAS COAST LATE FRIDAY. SUSTAINED WINDS ARE 145 MPH, PRESSURE IS 913 MB...26.96 INCHES.

rita

Update:

I have posted about the power of a hurricane, and even intimated that steering a hurricane, as some have suggested is being dome with "scalar" weapons, is the height of human arrogance to think it would be possible. (Hat tip to StormTrack)

Here are some facts about hurricanes from an article in USA Today

The National Hurricane Center notes that a hurricane releases heat energy at a rate of 50 trillion to 200 trillion watts. (trillion here is used in the U.S. and French sense: a number followed by 12 zeros) This is the equivalent of a 10-megaton nuclear bomb exploding about every 20 minutes.(emphasis added)

Hurricanes draw their energy from air over hundreds of thousands of square miles of ocean. Cooling the water over this large area or finding a way to prevent evaporation of water would reduce hurricanes' strength. But, all of the dry ice in the world would be quickly absorbed in a small part of the ocean near a hurricane.

Trying to heat the upper atmosphere with bombs, to lessen the heat contrast, would be like trying to heat the city of Minneapolis in January by opening the windows of a house.

I post so much about hurricanes or typhoons because I am just awed by the power of nature. Global warning may be real, but I think the effects of man on this planet are puny in comparison to what happens naturally. It wasn't that long ago that tribes used to believe that throwing a spear through the air could change the weather. Come on! Now we are finding that Mars is going through global warming. By connecting the dots, we'll find that the sun has more influence on the weather than we could ever imagine humans doing. Enough from my soapbox! rita

Update:

Winds have dropped in Hurricane Rita to 150 MPH and makes Rita a category 4 down from 5. Is this Eyewall Replacement Cycle causing the winds to drop or is it losing power as it nears land?

Recall Katrina was a category 5 hurricane prior to making landfall, then the winds dropped to 145 MPH. The difference is being hit by an 18 wheeler or a freight train. Both are going to leave scars! rita

Update:

From Rigzone, meeting in Vienna,

OPEC for the first time since 1990, suspended its output quotas, yet the markets barely noticed. The quotas, enacted to keep prices from falling too low, now are being waived to ease prices that have climbed too high.

Lifting the quotas, though, may prove little more than a token gesture. It's unlikely OPEC can add the 2 million barrels of surplus production it claims, and even if it could, most refineries not damaged by Katrina already are running flat out. Besides, any increase in production is likely to be high-sulfur "sour" crude, not the light, sweet grade our refineries need. In other words, even if more oil is produced, it's not going to lower pump prices.

All of which leaves OPEC on the sidelines, unable to quell the market's fears, a footnote to the storms' litany of economic upheaval.

OPEC

The latest track of Hurricane Rita appears to me to be headed a little more East!

In a comment Ron Franscell of Under the News said

Our protector at the moment is a high-pressure cell that's acting as a shield, driving Rita more southerly. If the high-pressure system passes through too quickly, our shield disappears and Rita can detour sharply north toward the Texas-Louisiana line ... us. Our best-case scenario, it seems, is that we'll endure Rita's outer bands of tropical storm-force winds and rain; worst-case is that she turns directly at us.

That shift, if it is happening makes Beaumont, Texas the target and shifts the outer bands closer to NOLA.

Update:

MSNBC confirms:

The National Weather Center noted that the hurricane had shifted slightly to the east. And in New Orleans, Rita's outer bands brought the first rain to the city since Katrina, raising fears that the patched-up levees could give way and cause a new round of flooding.

rita

Update:

From Reuters, Neighbors tell of gun battles after the storm

After the storm (Katrina), the neighborhood association had to act as law enforcement and emergency response unit as city services collapsed and the police force was unable to protect them.

[...]

"For five days we didn't need FEMA, the Red Cross or the National Guard," (Greg) Harris said. "The neighborhood took care of itself."

In the first 72 hours in a disaster, you will probably be on your own. Here, people joined together in parts of NOLA, armed themselves and protected their families and property. Katrina

Hurricane Rita's threat to the oil industry is very real according to Bloomberg.

"The Houston area is ground zero of the refining industry," said Rick Mueller, an analyst with Energy Security Analysis Inc. in Tilburg, the Netherlands. "If it suffers the scope of damage caused to refineries in Louisiana by Katrina, we could see rationing and queues at the gas pump. This is something OPEC can't do anything to remedy."

About 52 percent of 134 rigs and 57 percent of 819 manned platforms in the Gulf of Mexico were evacuated, the Minerals Management Service said on its Web site

[...]

Harris County has ordered a mandatory evacuation of flood- prone areas starting 6 a.m. The city is home to about 3.6 million people including the residents of Houston, the fourth- largest U.S. city, according to the 2003 census.

The Port of Houston, the world's sixth-largest port and biggest in the U.S. by foreign tonnage, closed at 5 p.m. yesterday. The Port Authority is hoping to re-open the site by Sept. 26 to avoid a major disruption of business, Chairman James Edmonds said.

That means that somewhere between 1.3 Million and 3.6 Million people are expected to evacuate from areas in Texas that are flood prone or near landfall. This has to be an unprecedented logistics nightmare never seen in this country.

When I look at the above loop, it sure seems to be heading for NOLA??? rita

Update:

Extremely interesting interview at 321gold.com of Pierre Lassonde, President of Newmont Mining, the world's largest gold producer. Here's a man that 18 months ago was touting Matthew Simmons book Twilight in the Desert

Matt Simmons' study projected much higher oil prices, $80-$100, at a time when the oil price was about $37/barrel...

Based on the assumption that oil would go higher and stay there for 10 years and Newmont's oil demand was 3 million barrels per year,

we elected to hedge by purchasing 7% of a Canadian oil trust, Canadian Oil Sands, which owns 35% of Syncrude. At the time we made the purchase the reserves in the ground were being valued at $26/barrel. We did that in the summer of '04 and today the stock is $125. Our $200 million investment is worth about $635 million.

[...]

We expect that the dividends on this investment will essentially cover all of the increase in the oil price that we've seen, providing us with a hedge for the next 50 years, because this reserve will last without having to drill another hole.

In 1999 in the annual report Lassonde included a chart showing that investment performance cycles between paper and hard assets. He believed the world was near the end of the paper cycle and near the beginning of the hard asset cycle. There had been two cycles before, each lasting 12 to 14 years. In 2001 the price of Gold hit bottom at about $250 per ounce. He believes we are four years into the cycle and Gold is up 80%.

If you go back to that chart I talked to you about, the Dow Jones/gold price chart, one of the points I touch on is that every hard asset bull market has ended with a low, low, single digit ratio. In 1980, gold was 800 and the Dow was 800. In 1932 the Dow touched 37 and the gold price was $35 in 1934, there was a bit of a disconnect in terms of prices. It ended up at less than two to one. I do believe that when you look at the financial imbalance in the US system, a 6% current account of GDP deficit, you look at the amount of debt being created in the private and public sectors, to unwind all of these excesses will take time. I don't think it is going to happen in the next one or two years; it is going to take a lot longer than that. If you look at a low single digit number, I don't think the Dow is going to crash through 1,000. In 1966-67 the Dow lost about 40% of its value going from 1,000 to about 600. In the 30s it lost 90% of its value but then you had deflation, outright deflation like we've seen in Japan the last 15 years. I do not believe we are going to see outright deflation in the United States, I think it is going to be more like a muddle through, so I still think the Dow is going to be 6000 to 8000 +/- something. When you look at the amount of money that has been created, what I see is a gold price that will have three zeros after the first number. But I don't know what that first number is going to be. Yes, over $1,000. Is it going to be in the next year or two, I don't think so, I think it is going to be a 5-8 bull market that we have in front of us. So the place to be over the next 5-8 years is hard assets. That's what it is, gold, oil.

As I said it is an extremely interesting article and I have only scratched the surface. Lassonde seems to have a knack for reading the economic signs and reacting correctly. I urge you to spend some time with Pierre Lassonde

MEMO: To Mayor C. Ray Nagin, New Orleans

This is how it is done!

Earlier, seeking to avoid the kind of disaster and poor response that marked the devastating arrival of Hurricane Katrina last month, public officials from mayors to President Bush urged residents to evacuate their homes before Rita arrives.

"I encourage coastal residents … to begin proceeding to more secure areas," Texas Gov. Rick Perry told reporters.

rita

Update:

DATA FROM RECONNAISSANCE AIRCRAFT INDICATE THAT RITA HAS INTENSIFIED
A LITTLE MORE AND WINDS HAVE REACHED 150 MPH WINDS WITH A MINIMUM
PRESSURE OF 920 MB. THIS MAKES RITA A STRONG CATEGORY FOUR HURRICANE. rita

Update:

Mover Mike has just received a lengthy comment from Under the News - A blog from inside the newsroom of a daily newspaper somewhere in America ... and any place else I happen to go. You can read the post at Mover Mike in the comment section or from Beaumont, TX at Hurricane Rita Watch: Day Three at Under the News.

Our protector at the moment is a high-pressure cell that's acting as a shield, driving Rita more southerly. If the high-pressure system passes through too quickly, our shield disappears and Rita can detour sharply north toward the Texas-Louisiana line ... us. Our best-case scenario, it seems, is that we'll endure Rita's outer bands of tropical storm-force winds and rain; worst-case is that she turns directly at us.

Ron thanks so much for contacting us. Judging by my traffic, people are thirsting for news. Many of us have friends and relatives in the affected areas. We pray you are safe! rita

Update:

Gold has clearly broken out of a year-long trading range.

Don't be taken in by the likes of Alan Blinder, laughing at the prospect of "gold as money". Gold

One interesting note about hurricanes that I've read about at StormTrack and other sites is the hurricane "eyewall replacement cycle" (ERC). A hurricane can be a category five prior to landfall, but because of ERC, can drop to a category 3 and not be as devastating. Conversely Hurricane Andrew in 1992 came out of an ERC stronger, as a category 5, as it was making landfall.

Radar image of Hurricane Andrew's eyewall - the red donut - coming ashore in South Florida Aug. 24, 1992. National Hurricane Center

To understand how ERC works I refer you to this article from USAToday Answers: How hurricanes replace their eyewalls. StormTrack has posted a more detailed explanation on his web site in What is eyewall replacement? rita

Update:

Stormtrack which has some excellent graphics and is very knowledgeable about hurricanes just posted this:

The 10:00am CDT advisory listed Rita at 944 mb with 140 mph winds, but satellite estimates continue to show a stronger storm. The latest Dvorak satellite estimate from the University of Wisconsin suggests a Category 5 hurricane of 920.1 mb with winds of 140.0 kts (161.1 mph)! (emphasis added) While this estimate is likely high, it could be a sign of things to come.

rita

Update:

From the Seattle Times,

The web site, Rigzone.com, a favorite of energy analysts, warned yesterday that Rita threatens the most productive area of deepwater oil rigs and platforms.

Forecasters are looking for landfall near Galveston, Texas. Sustained winds are now 140 MPH, a category 4 hurricane. The waters of the gulf are the warmest at this time of year, so Rita could strengthen further to a category 5.

Texas boasts 26 refineries, or about one-quarter of the nation's refining capacity. At least 14 are on or near the Gulf Coast.

Texas has boosted production of critical fuels since Katrina shut down Lousiana oil facilities. Rita could deal a blow that will cause gasoline and heating oil prices to rise further. But will the high oil prices last? Royal Dutch Shell will invest $15 Billion yearly and make huge drilling decisions on their expectations for future oil prices.

"It's not going to take very much to move it up. God forbid that something happened in the Middle East," Melek said. "There isn't physical spare capacity, there just isn't."

Update:

Jerome Corsi in Hurricane Rita vs. oil rigs ... here we go again Has an excellent overview of the Gulf oil industry and a map of the track of Rita and where the oil rigs are. rita

Update:

From Xinhua Online, Over 3,000 Bangladeshi fishermen missing in rough sea

At least 200 fishing boats with over 3,000 fishermen aboard went missing till Tuesday evening as the trawlers sailing from the coastal districts of the country are believed to have capsized in the turbulent sea under the influence of a deep depression.

Quite an interesting report on Tuesday's tr