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09/02/2005 Archived Entry: "Katrina affecting Northeast US"
Katrina is affecting much of the country. In a town about 20 miles from Boston, I passed lines of 10 cars and more waiting for gas at 2 different stations. Thank God I have a Prius! Even with its wimpy 11-gallon tank it will go nearly 600 miles between fill-ups. It may have to.
Today's Wall Street Journal reports that "Long gas lines were reported in Denver, Indianapolis, Hartford, Conn., Atlanta and Orlando, Fla., among other cities. In Charlotte, N.C., between 13% and 15% of stations had no gasoline and prices have soared as much as 70 cents a gallon in those stations that still have fuel to peddle, said Tom Crosby, a local AAA official there."
Gas jumped certainly jumped around here. I paid $2.99 Wednesday night on my way home from the airport. Thursday it was up to $3.69 in spots. You won't hear me crying about gouging; this is the market at work allocating a now scarcer resource to its best and highest uses. But it is a very bad sign.
I heard Bushimo on the radio saying "Don't buy gas unless you have to." So I immediately found a station with short lines and filled up. I checked at two large hardware stores; the shelves had been stripped bare of 5-gallon plastic fuel containers.
Speaking of market, the manipulation of the stock market is getting extremely obvious, and I can't be the only one noticing. We have the worst devastation of a US city in a century, damages that must total $30 billion and counting, thousands of bodies lying in the street in New Orleans, which is sliding into anarchy and chaos, with firemen being shot at and the National Guard unable to keep order, yet.
Fully 90% of the gasoline and jet fuel production in the NO area is shut down and likely to stay that way for weeks, airlines are cancelling flights for want of fuel, and gas lines are forming. Gold was up over $10.50 at one point in the day, closed up $8.40. New jobless claims are higher than expected, 320,000, when only a year ago anything over 240,000 was viewed as very bad news.
And the stock market lost a lousy 22 points, one-fifth of one percent. It started a steep slide, and suddenly at 11 AM sharp it rallied as if someone had light a rocket underneath it.
Which they almost certainly had. There are reports all over the net about huge positions being taken in index futures, some so large that they theoretically control substantial fractions of the entire market. This has been going on for some time, but the bets are getting bigger, the cheating more obvious. There is just one place that can throw down that kind of money day after day.
The trouble with attempting to control the market's re-allocation of resources in response to new and changed circumstances is that it takes progressively bigger and more violent interventions to achieve the same result. In a year of basically terrible financial and investment news, the stock market has traded within about 500 points of 10,400 the entire time. It's being managed, it has probably been cheated since 2002 or 2003. Eventually the deciet will be revealed. When economic reality asserts itself there is truly going to be hell to pay.
I'm stocking up. On everything. This may not be the big one, but those clouds on the horizon sure look bad.
Posted by Silver @ 08:29 AM CST