Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Aardvark Adventures -- Ignore unavailable to you. Want to Upgrade?

To: ~digs who wrote (1422)	9/6/2005 5:52:34 AM
From: ~digs	Read Replies (1) \| Respond to of 7944

We got a reminder yesterday (courtesy of Katrina) that when Mother Nature wants to put on a show, it can be extraordinarily nasty. As the press is finally able to get to ground zero and we see pictures of the devastation and hear stories of lives lost and family situations altered forever, we get a sense of the disaster. Whether it’s the worst in American history or the third worst, who really cares, it is of historical proportions. To find out that things are apparently getting worse, with levees broken and the water actually increasing in depth, suggests that there is no sign of this thing getting better anytime soon. It seems almost sacrilegious at a time like this to look at some of the economics of the situation and the effects on stock markets, however that IS what we’re expected to do. We simply can’t ignore the significance of New Orleans, Louisiana and the areas, and their importance to the energy business. Approximately 22% to 24% of all the natural gas in the United States is produced by the huge platforms—roughly 4000 of them, offshore in the Gulf of Mexico. Between the offshore production and the oil that is unloaded at the super-port at New Orleans, roughly a third of all the energy that lands in the United States, goes through that one area. If it is shut down for weeks (let alone months) one can only guess how oil high oil prices can go. This impact could even get worse as already there are reports that some of the huge platforms may have experienced significant damage. According to Bloomberg, 92% of all the platforms that were producers in the Gulf, have been shut down in anticipation of the storm. It’s anyone’s guess when some of those will be up and running. The big question of course is how this is going to hit the American economy—an economy that has been chugging along nicely lately and supporting much of the world it seems. Can oil prices of $70 or $80 bring it crashing down? It’s a question that has to be asked. Up until now, it was mainly an inconvenience as high prices at the oil pump hurt a persons pocket book. But just look at some of these charts. Whether it’s natural gas or heating oil, you just know that the heating bills this coming winter are going to make last winters (which was probably a big one) look like chump change. So the question again is, while we were an energy bull before and probably still are, could this high price for energy bring on a recession? As one looks at the American markets today and sees stocks as varied and as significant as Wal- Mart, JP Morgan and General Electric all flirting with new lows for the year, we believe that one has reasons to worry. ---------- Message 21655518