Stock Market Crash Expected In 2008 To Be Worse Than 1929

[Soldier4Christ]

The democrats plan is what they are getting. As the article says, conserving oil/gas is just complicating and deepening the recession. The clear answer is to free ourselves from dependency on foreign oil thereby freeing ourselves from the influence of the cost of foreign oil and somewhat freeing us of the effects that the situation in Iraq has on oil. The only immediate answer to this is to increase oil and gas supplies from domestic oil. No that would not be a long range solution but it will be an immediate relief. Then work on technology to decrease dependency on oil to a greater degree than is currently possible. Doing this will shore up the American economy, bringing it out of the recession that we are definitely in (even though the government hasn't fully recognized it as a recession).

[Soldier4Christ]

Small Florida bank is 8th U.S. failure this year

Bank regulators closed a small Florida-based bank on Friday, the eighth U.S. bank to fail this year under pressure from a weak economy and a credit crisis precipitated by falling home prices.

 The Federal Deposit Insurance Corp said First Priority Bank had $259 million in assets and $227 million in deposits and its failure will cost the federal fund that insures deposits an estimated $72 million.

SunTrust Banks Inc (NYSE:STI - News) has agreed to assume the insured deposits of First Priority, whose six branches will reopen Monday as branches of SunTrust Bank.

Customers can access their money over the weekend by check, teller machine or debit card, the FDIC said.

It is the first bank to fail in Florida since Guaranty National Bank of Tallahassee failed in March 2004, according to the FDIC, which blamed the failure on exposure to the real estate market, predominantly in the construction lending area.

Florida is among several states whose housing markets have seen the sharpest declines.

The biggest bank failure by far this year is IndyMac (Other OTC:IDMC.PK - News), seized on July 11 with $32 billion in assets and $19 billion in deposits as of March, and the third-largest bank insolvency in U.S. history.

The FDIC oversees an industry-funded reserve used to insure up to $100,000 per account and $250,000 per individual retirement account at insured banks.

The agency also has running tally of problem banks that its examiners closely monitor. At the end of first quarter, 90 institutions were on that list.

The FDIC does not name the institutions on the list, which is expected to be updated this month for the second quarter.

[Soldier4Christ]

Stocks fall on jobless data, Wal-Mart sales
Unemployment claims jump, sales at largest retailer slightly rise

Wall Street retreated Thursday after weekly unemployment claims jumped to a six-year high and Wal-Mart Stores Inc. and other retailers reported disappointing sales, touching off renewed fears that a pullback in consumer spending will damage the economy. The Dow Jones industrials fell about 120 points.

The Labor Department said the number of newly laid off people seeking jobless benefits increased by a seasonally adjusted 7,000 to 455,000 last week, the highest level since late March 2002. Wall Street had expected new claims to rise to around 430,000.

Wal-Mart, the world's largest retailer, said same-store sales, or stores open at least one year, rose 3 percent in July as consumers began using up their government stimulus checks. Analysts who follow the important measure of a retailer's health had expected a 3.4 percent rise, on average.

Financial stocks also lost ground after insurer American International Group Inc. reported that it lost more than $5 billion in the second quarter. The stock was by far the steepest decliner among the 30 that make up the Dow industrials.

In midfternoon trading, the Dow fell 123.02, or 1.06 percent, to 11,533.05. The pullback follows a two-day rally in the Dow of more than 370 points.

Broader indicators also slid. The Standard & Poor's 500 index fell 11.73, or 0.91 percent, to 1,277.46, and the Nasdaq composite index fell 5.77, or 0.24 percent, to 2,372.60.

Bonds rose as investors sought the protection of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its prices, fell to 4.00 percent from 4.05 percent late Wednesday. The dollar was lower against other major currencies, while gold prices rose.

The employment data Thursday indicated that the labor market continues to weaken. The number of people continuing to collect unemployment benefits rose for the week ending July 26 to the highest level since early December 2003. In recent weeks, General Motors Corp., Weyerhaeuser Co., and Starbucks Corp. have all announced job cuts, sending more people to the unemployment lines.

Stocks briefly came off their lows after the National Association of Realtors said its seasonally adjusted index of pending sales for existing homes rose 5.3 percent to 89 from a downwardly revised figure of 84.5 for May. Despite the June increase, the index sits 12 percent below year-ago levels. Economists surveyed by Thomson/IFR had predicted the index would fall to 84.3.

Jerry Webman, chief economist at Oppenheimer Funds Inc., said swift pullback in stocks after the day’s economic readings illustrates the fragility of investor sentiment. He said the market’s volatility reflects an undercurrent of uncertainty and efforts by some traders to capitalize on shifts in the mood.

“We react very strongly to bits of news,” he said. “The whipsaw danger is pretty high here.”

In corporate news, American International Group fell $4.71, or 16 percent, to $24.38 after the world’s largest insurer reported its loss and said weakness in the credit markets has erased several billions of dollars in value from its credit default swaps portfolio and other investments.

Citigroup Inc. fell 72 cents, or 3.7 percent, to $18.98 after federal and state regulators announced settlements Thursday in which the company will repurchase more than $7 billion in auction-rate securities and pay $100 million in fines. The company neither acknowledged nor denied wrongdoing under the settlements. New York Attorney General Andrew Cuomo had threatened to charge Citigroup with fraudulent sales of auction-rate securities and with the destruction of key documents.

The latest worries about financials offered an unwelcome reminder of the trouble companies are having with bad debt on their balance sheets. Tightness in the credit markets makes it hard for companies to unload and even value mortgages and other paper. And the reports of rising unemployment Thursday only added to fears that defaults on mortgages and other borrowings aren’t likely to end soon as consumers continue to struggle.

The results from Wal-Mart and other retailers only fanned concerns about consumer spending, which accounts for more than two-thirds of U.S. economic activity.

Wal-Mart, also a Dow stock, fell $3.33, or 5.5 percent, to $57.43 after reporting its July sales.

Other retailers’ reports disappointed Wall Street. Target Corp. fell $1.50, or 3.1 percent, to $46.51, while Macy’s Inc. fell 63 cents, or 3.2 percent, to $19.06.

Among technology names helping check the Nasdaq’s losses, Intel Corp. rose $1.01, or 4.4 percent, to $23.81, while Microsoft Corp. advanced 50 cents $27.52.

[Soldier4Christ]

Fears of global slowdown buck up the dollar

The dollar climbed to eight-week highs against the euro and seven-month highs agains the yen as fears of a global slowdown helped the dollar continue its rally.

The dollar climbed to eight-week highs against the euro and seven-month highs agains the yen as fears of a global slowdown helped the dollar continue its rally.

The dollar rose to 109.54 Japanese yen from 108.17 yen late Tuesday.

Meanwhile the 15-nation euro dropped to $1.5420 from $1.5473 after going as low as $1.5396, and the British pound sank to $1.9475 from $1.9562 ahead of interest-rate decisions by the European Central Bank and Bank of England Thursday.

The dollar gained as gloomy economic signs came in from abroad.

The Japanese government said a monthly index of business conditions was worsening, setting off the yen decline, said Michael Woolfolk, senior currency strategist at the Bank of New York Mellon Corp.

Meanwhile, the German government said industrial orders dropped unexpectedly in June, with orders from elsewhere in Europe leading a decline that underlined pessimism about the outlook for the continent's biggest economy. Orders dropped 2.9 percent in June, following a 1.4 percent drop in May, the Economy Ministry said.

Ashraf Laidi, a currency strategist at CMC Markets, said the decline, the seventh in a row, along with a leaked report by German newspaper Sueddeutsche Zeitung claiming that German second-quarter GDP likely shrunk by 1 percent, would weigh on the European Central Bank at its Thursday meeting.

"The hawkish rancor of (ECB President) Jean-Claude Trichet is likely going to be toned down considerably," Woolfolk said. Rate-hike talk will be cast aside, and Great Britain may signal future rate cuts, he said. "The ECB and Bank of England don't have much to cheer about."

The ECB is expected to keep its benchmark rate unchanged at 4.25 percent, given the 4.1 percent inflation in the 15-nation euro zone, while the BoE is expected to keep its rate steady as well, at 5 percent.

The Federal Reserve left the benchmark U.S. federal funds rate unchanged at 2 percent on Tuesday. Before rising inflation forced a pause in June, the Fed had cut rates seven times since the fall in hopes of reviving the flagging U.S. economy.

Talk of the Fed hiking rates had driven the dollar higher over the past three weeks, but Tuesday's announcement hinted that a weak economy was still a risk, and many analysts talked down the chance of a rate hike.

Higher interest rates abroad can push down the dollar, as investors transfer their funds from American assets to overseas, where they can get higher returns on their investments.

Meanwhile, oil futures touched below $118 a barrel Wednesday, while gold dropped below $880 an ounce. Commodity-exporting countries whose currencies were buoyed as long as commodities shot higher, such as Canada and Australia, have seen the value of their dollars eroded.

The dollar rose to 1.0477 Canadian dollars from 1.0428, circling year highs. The Australian dollar, meanwhile, fell to its lowest point in more than four months, to 90.62 U.S. cents.

In other New York trading, the dollar climbed to 1.0602 Swiss francs from 1.0539 francs.

"It is not simply a dollar rally but a sell-off in the Europeans," said Woolfolk.

[Soldier4Christ]

Oil Prices Tumble Again; Stock Markets Surge

Oil prices resumed their descent Friday as a strengthening dollar and worries about economic growth offset supply concerns over a sabotaged pipeline in Turkey.

The sharp drop in oil prices helped to drive up the Dow Jones industrial average by almost 230 points. The oil price decline eased worries over a quarterly loss from the mortgage finance company, Fannie Mae, that was more than triple what Wall Street expected.

A strengthening dollar helped lower the price of a barrel of oil. Light, sweet crude fell $3.93 to $116.09 on the New York Mercantile Exchange. The dollar strengthened against the euro and yen after the European Central Bank and the Bank of England left their benchmark interest rates unchanged .

“The dollar is a factor, but the dominant factor is the perception that high oil prices coupled with slower economic growth in developed countries will curb oil demand,” said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney. “Oil prices are still at very high historical levels.”

Oil had risen $1.14 Thursday to close at $120.02 a barrel after Turkey’s state-run news agency, Anatolia, said the pipeline, attacked by the separatist group Kurdistan Workers’ Party, could be shut down for up to 15 days. The pipeline can pump slightly more than 1 million barrels a day, or more than 1 percent of the world’s daily crude output.

On Wall Street, investors welcomed the Friday’s drop in oil prices, which helped to offset new concerns about the housing sector and the economy touched off by the Fannie Mae results.

Wall Street appeared unfazed by the Labor Department’s report showing that workers’ efficiency grew at a slightly slower pace in the second quarter as companies sought to produce more with smaller work forces. Perhaps balancing the report, gains in wages and benefits also slowed. Keeping compensation in check can help contain inflation.

The Dow rose about 233 points, or 2.03 percent after falling nearly 225 points on Thursday.

Broader indicators also rose Friday. The Standard & Poor’s 500 index rose 1.75 percent, and the Nasdaq composite index advanced 1.91 percent.

The Labor Department reported that the amount an employee produces for every hour on the job grew at an annual rate of 2.2 percent in the second quarter. Economists surveyed by Thomson Financial had predicted growth would come in at 2.7 percent, up from 2.6 percent in the first quarter.

Unit labor costs slipped to a 1.3 percent pace in the second quarter, down from 2.5 percent in the first quarter. Wall Street hopes companies can keep a cap on worker pay to avoid rising prices and weakening economic growth.

Fannie Mae reported a loss of $2.3 billion, or $2.54 a share. Analysts surveyed by Thomson Financial had expected a loss of 68 cents a share. The company also said it would cut its quarterly dividend to 5 cents from 35 cents. Fannie Mae shares fell 8 percent.

In addition, the bond insurer MBIA rose 11 percent after reporting that its second-quarter earnings rose because of unrealized gains on credit derivatives. MBIA said the weakness in the housing and mortgage markets was consistent with its earlier projections.

[Soldier4Christ]

i find it pretty normal that some people are putting the drop in oil to the strengthening dollar, the drop in demand for oil and now today I heard that it was because China had been stockpiling oil for the Olympics and that with the Olympics now starting it would cause the oil to drop. Take note the situation mentioned in the pipelines in Turkey. Such a situation as that would usually be said to increase oil prices and so would the news of Russia's actions against Georgia and the possibility of the U.S. joining Georgia in this fight.

What I find almost curious is that the media has not once mentioned that the first drop in oil came out after President Bush released an executive order to raise the ban on drilling. The next really large drops in oil came after the Republicans listened to their constituents and stayed in session in protests over democrats refusing to vote on oil and instead to go on recess.

Even if prices do continue to fall we still need to continue to press Congress to lift the bans on drilling. If this is not done we will still remain in a situation where we will be controlled by foreign entities and foreign oil prices. All that has been gained will be lost.

[Soldier4Christ]

Former IMF Economist Predicts “Whopper” U.S. Bank Failure, Says Global Financial Crisis Set to Get Much Worse

Harvard economics professor Kenneth Rogoff, former chief economist of the International Monetary Fund, predicted Tuesday that a high-profile casualty among American banks was highly likely, according to a report in the Times of London.

"We're going to see a whopper, we're going to see a big one -- one of the big investment banks or big banks," the paper quoted him from a conference in Singapore.

Rogoff's crystal ball conflicts with statements of U.S. banking regulators, who have maintained that most U.S. banks, including all the major ones, are well-capitalized and do not pose a risk of failure.

Who's right? Hard to say. Bank regulators have extensive information on every bank in the system and should be aware of the financial condition of each. That said, July's failure of IndyMac surprised regulators, proving they can be caught off guard again.

One thing is certain: if a major commercial bank fails, the industry's deposit insurance fund will have to be bailed out by U.S. taxpayers. The $53 billion insurance fund is not large enough absorb a major bank failure and the banking industry as a whole is not healthy enough to cover the shortfall.

[Soldier4Christ]

Regulators close Kansas bank – 9th so far this year
FDIC estimates failure will cost its deposit insurance fund $60 million

State and Federal regulators shut down Columbian Bank and Trust of Topeka, Kan. -- the ninth bank to fail so far this year and the fifth since mid-July.

 The Federal Deposit Insurance Corp. estimates the failure will cost its deposit insurance fund $60 million. Columbian Bank and Trust had $752 million of assets and $622 million of deposits as of June 30, the FDIC said.

The insured deposits of the failed bank, which had nine branches, were sold to Citizens Bank and Trust of Chillicothe, Mo. Also, Citizens Bank and Trust agreed to buy $85.5 million of Columbian Bank and Trust's assets.

The FDIC said Citizens Bank and Trust did not purchase about $268 million of brokered deposits at the failed bank. The failed bank had approximately $46 million in uninsured deposits held in approximately 610 accounts that potentially exceed the insurance limits. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers, regulators said.

The nine branches of The Columbian Bank and Trust Company will reopen on Monday as branches of Citizens Bank and Trust, the FDIC said. Depositors of the failed bank will automatically become depositors of Citizens Bank and Trust. Deposits will continue to be insured by the FDIC.

[Soldier4Christ]

It seems that ANWR is a solution to many of the economic problems in the U.S. in more ways than just providing more oil to bring the prices of oil and gas down.

The National Defense Council Foundation

ANWR

Alaska is not the only state that would benefit from the development of Alaska’s oil
and gas resources.

The fact is that new jobs would be created in all 50 states and the District of Columbia by
developing ANWR’s oil and bringing Alaskan gas to the lower 48 states.

California which currently has 1,166,500 citizens out of work would gain 334,435 new
jobs – reducing the ranks of that state’s unemployed by more than 28.7%.

Washington State, with 234,000 unemployed would gain 139,089 jobs reducing the
number of its residents out of work by 59.4%.

The job creation is not limited to the West or to oil producing states.

Pennsylvania gains 142,539 new jobs, a number equal to almost 41% of its 347,800
unemployed.

New York, with 571,600 residents out of work gains 93,356 new jobs reducing
unemployment by over 16.3%.

New Jersey, with 271,000 unemployed will see 39,136 new jobs and Illinois which has
415,200 unemployed gains 40,609 jobs.

Overall, the U.S. will gain 2,210,418 jobs as a result of Alaskan resource development –
1,074,640 from oil development and 1,135,778 from gas development.

Federal and state coffers would also benefit.

When oil production reaches its peak, states would gain over $3 billion a year in new
revenues. Federal coffers would be enriched by over $2.8 billion. Alaskan gas production
would generate almost $1.7 billion in new state revenues and add almost $1.1 billion to
federal receipts. Taken together, these come to $4.7 billion in new state revenues and
$4.1 in new federal revenues.

Over the first fifteen years of production, economic activity associated with ANWR oil
production would generate almost $29.2 billion in new Federal revenues and almost
$31.4 billion in new state revenues for a total of over $60.5 billion.

Our perilous oil import dependence would be reduced.

In June, 2003 the U.S. imported 65.5% of its crude oil and refined products, with 18% of
imports coming from the Persian Gulf. ANWR production could replace more than 70%
of the oil imported from that unstable region. Alaskan natural gas production could add at
least 1.1 Trillion Cubic Feet to 1.5 Trillion cubic feet per year to U.S. natural gas
supplies.

For more information and totals by states see:

http://www.anwr.org/docs/ANWR_jobs_brief.pdf

Another excellent place for more information on this including statements from the Inupiat Eskimoes see:

http://www.anwr.org/

Plenty of interesting reading there on all of ANWR and Alaska.

[Soldier4Christ]

COULD A LAND SWAP SOLVE THE ANWR STANDOFF?


Congress has repeatedly refused to allow drilling on the 2,000 acres set aside for that purpose in the Arctic National Wildlife Refuge, a tiny portion of tundra in a 19-million-acre preserve.  That parcel had been created with the specific intent of extracting oil from the area when ANWR first received its federal protection, but environmentalists have continually blocked oil companies through other federal action.  Sean Parnell, the Lieutenant Governor of Alaska, has a proposal to end federal oversight on that stretch of barren land:

    Sean Parnell, lieutenant governor and a Republican candidate for the U.S. House of Representatives, proposed a land swap as a way of opening the Arctic National Wildlife Refuge.

    “I propose a land swap of 2,000 acres of state land to the federal government in exchange for 2,000 acres of the coastal plain in ANWR into state hands,” Parnell said at a press conference Tuesday in Fairbanks.

    Parnell said he could work with Gov. Sarah Palin and the administration to identify the 2,000 acres of state land that would be traded, perhaps extending a portion of ANWR by 2,000 acres.

Could this defuse the controversy?  In a land swap, the federal government would not lose an inch of overall land.  If Alaska offered adjoining land from an area with actual wildlife on it, it would serve to bolster the preserve’s actual mission.  The state would then take responsibility for the parcel where oil extraction would take place, and Alaska would have little trouble overcoming any objections from state groups to get oil flowing as soon as possible from that spot.

Normally, Congress would not be likely to let go of such a potentially lucrative spot, nor would the opponents of drilling on ANWR be willing to stand aside as the parcel passes out of their control.  However, the energy debate this year has had a significant effect on both Capitol Hill and the American electorate.  The latter is angry over the former’s unwillingness to increase domestic production, and while voters remain ambivalent about ANWR, the momentum for drilling there has grown tremendously this summer.

A land swap would allow Congress to graciously eliminate ANWR as an ongoing issue.  Enough Democrats in both chambers want to get this debate in their rear-view mirrors, and a land swap would allow them to save face, especially if it added more significant preserve space to ANWR.  Parnell may have a compromise that will allow everyone, perhaps even the environmentalists, to declare a victory on ANWR.

[HisDaughter]

Is this what we want?  Of course it is.  Will it ever happen?  I doubt it.  Why?  Because it's a GOOD thing and it makes sense.  It won't happen because it would help the American people in so many ways and our government doesn't want to help the American people.  They want to help themselves to what little we have left in our pockets. 
I hate to be the doomsayer all the time, but I just don't see it happening.  Oh I see SOMEONE drilling there eventually but not us and not to benifit us.  By the time they get around to it, after all the arguing, hemming and hawing, red tape, whatever, the Rapture will have come and gone.  And if not it won't be the USA by then anyway.  It will be the "United States of Islam" or "Muslimotopia" or somesuch.  Whatever it is, whenever it is; the people of the United States will never reap the benefits of the drill.  Prophecy?  Naw.  Just my prediction.

[Soldier4Christ]

Troubled U.S. bank list grows to 117
'Assets of problem institutions also will continue to rise'

The number of US banks on a "problem list" grew to 117 in the second quarter from 90 in the first three months of the year, the banking industry regulator said Tuesday.

The list of troubled banks is now the largest since mid-2003, according to the Federal Deposit Insurance Corporation, which insures bank deposits and can take over insolvent banks.

Total assets of problem institutions increased to 78 billion dollars by June 30 from 26 billion in the first quarter, according to the FDIC, which noted that 32 billion of that total came from California-based IndyMac Bank, taken over by the regulator in July.

"More banks will come on the list as credit problems worsen," FDIC chairman Sheila Bair said.

"Assets of problem institutions also will continue to rise."

Bair also announced that in early October the FDIC will consider a plan to replenish the agency's fund, which experienced a large drop to cover losses at IndyMac and other bank failures.

The plan "likely will include an increase in the premium rates that banks pay into the fund," she said. "And we'll be proposing changes to the current assessment system that will shift a greater share of any assessment increase onto institutions that engage in high-risk behavior to encourage and reward safer behavior."

The FDIC said profits for its 8,400 member banks plunged 86.5 percent in the second quarter compared with a year ago to 5.0 billion dollars. With the exception of the fourth quarter of last year, the latest earnings were the lowest for the industry since the fourth quarter of 1991.

"By any yardstick, it was another rough quarter for bank earnings, but the results were not unexpected as the industry coped with financial market disruptions, the housing slump, worsening economic conditions and the overall downturn in the credit cycle," said Bair.

[Soldier4Christ]

Oil rises as Gustav nears U.S.
Investors worry that Tropical Storm Gustav could damage oil facilities in the Gulf of Mexico. Energy Department reports decline in crude and gas supplies.

Oil prices ticked higher on Wednesday as Tropical Storm Gustav approached the Gulf of Mexico and the dollar fell against the euro.

U.S. crude was up 90 cents to $117.17 a barrel by 1:06 p.m. ET on the New York Mercantile Exchange.

Oil had traded as high as $119.63 a barrel during the session, but gave back some of those gains as the dollar rebounded.

Gustav: Worries about the approach of Tropical Storm Gustav eclipsed any reactions to a government petroleum inventory report showing a decline in oil and gas stockpiles. Crude had been trading up $2.04 a barrel just before the report's release.

The National Hurricane Center projected Gustav could strengthen as it passes over Haiti, and touch the Louisiana coast by Monday.

Gustav had been downgraded from a Category 1 hurricane as it passed over the island nation. However, the Hurricane Center cautioned that Gustav could gain steam on Wednesday as it moves out into the warm waters of the Gulf.

Gulf infrastructure: Oil platforms in and around the Gulf of Mexico account for more than a quarter of U.S. oil production. They are also vulnerable to extreme storms such as hurricanes.

Hurricanes Katrina and Rita in 2005, both of which reached Category 5 strength before making landfall, destroyed 113 offshore oil and natural gas platforms and damaged 457 pipelines, according to the government.

Unless Gustav bypasses the Gulf, it could reach Category 3 or 4, said Brian Wimer, senior meteorologist with AccuWeather.com.

"Once [Gustav] gets into the Gulf of Mexico, conditions are favorable for further strengthening," he noted.

Oil giant Royal Dutch Shell PLC (RDS) said it could begin evacuating workers on Wednesday. And Exxon Mobil (XOM, Fortune 500) said it was monitoring the storm closely.

"One of the most menacing aspects of Gustav is that it's approaching over a three-day weekend," said James Cordier, founder of OptionSellers.com in Tampa, Fla.

Investors usually buy and hold going into a weekend, just in case disaster strikes, sending prices higher. Because Monday is Labor Day, the U.S. market is closed longer than usual.

Inventories: Investors practically ignored a government inventory report showing a decline in crude and gasoline supplies.

The Energy Department said that stockpiles of unused crude fell by 100,000 barrels and gasoline stockpiles fell by 1.2 million barrels last week.Economists had expected crude supplies to rise by 1.5 million barrels, and gas to fall by 2.8 million, according to a survey from Platts, the energy research arm of McGraw Hill Cos.

Supplies of distillates, which are used to make diesel fuel and heating oil, remained unchanged.

Over the past several weeks, the Energy Department has reported unexpected buildups and drawdowns in supplies of petroleum commodities. Investors had been paying particularly close attention to gasoline stocks.

Supply estimates are "an imprecise science," said Tom Orr, head of research for financial services firm Weeden & Co. Weekly supplies depend heavily on weather patterns and on whether or not tankers are able to deliver their cargos.

Dollar: Oil got a boost from a weaker dollar during Wednesday's session, but pulled back slightly as the dollar market reined in its losses.

Oil prices have risen and fallen very closely in relation to the dollar over the past several months.

Oil is traded in U.S. dollars. So when the dollar loses strength, oil becomes cheaper for foreign investors. Many also purchase oil and other commodities as a hedge against inflation.

The dollar fell in value against the 15-nation euro Wednesday as investors mulled the possibility that inflation is coming under control, but losses were lower around 1:00 p.m. ET.

Over the past several weeks the dollar has gained strength against the euro as investors worried that economic trouble may cause the European Central Bank to cut a key interest rate in order to keep cash flowing through the economy.

Some investors are starting to feel that the monetary policies are where they should be, and that "discussions about declining rates in Europe are premature," said Orr.

Crude was higher earlier in the day as dollar values deteriorated, but then prices pulled back as the dollar's losses shrank.

The dollar strengthened on Tuesday as Gustav moved into the Caribbean, keeping prices from rising too much, but the dollar reversed on Wednesday, taking that pressure away.

Demand: Oil prices have fallen more than 20% since hitting a record high of $147.27 on July 11.

Investors worries that high oil prices had cut into consumption as businesses reigned in spending and consumers drove less.

Retail gasoline prices have followed crude, sliding to a nationwide average of $3.667 a gallon on Wednesday.

[Barbara]

US Economy

by Bill Koenig

US banks already burdened by losses and concerns about their financial health, face a new challenge: paying off hundreds of billions of dollars of debt coming due ... The Wall Street Journal reports that "floating-rate notes" -- securities used heavily by banks in 2006 to borrow money -- are the issue.

The crunch will begin next month, when some $95 billion in floating-rate notes mature. J.P. Morgan Chase and Co. analyst Alex Roever estimates that financial institutions will have to pay off at least $787 billion in floating-rate notes and other medium term obligations before the end of 2009. That's about 43 percent more than they had to redeem in the previous 16 months.

 

[Soldier4Christ]

Yes, questionable business practices are catching up with a lot of banks and corporations and it is the average citizen that will end up paying for it all.