Tropical Storm Lee

While the east coast is still cleaning up from Irene, areas of the Gulf coast are now getting hammered by Tropical Storm Lee. 

Originating in the Gulf of Mexico, moving north at 2 mph, and with sustained winds of 45 mph, Lee is now being termed a "Super Soaker".  Up to 20 inches of rain is expected to fall in parts of Louisiana and Mississippi, and both states have declared States of Emergency.  Tornado warnings were issued for New Orleans, and according to Federal authorities, 169 of the 617 staffed production platforms have been evacuated, along with 16 of the 62 drilling rigs located along the Gulf coast.

Although it's been called "nothing compared to Katrina," and although city officials have declared otherwise, for New Orleans, this will be a substantial test for their rebuilt levees and pumping system, so ordered after the catastrophic flooding Katrina caused in the Big Easy. 

We normally wouldn't include such a storm in this blog, as it may turn out to be less significant, historically.  But, lest we forget the flooding damage caused by Irene, even after it had downgraded to tropical storm, and considering the susceptibility of New Orleans to flooding, and considering hurricane Katia still gathers strength out in the Atlantic, as it rolls in the direction of Florida, we nonetheless considered worthy of mention here, as the summer of 2011 may soon be known as the Summer of Storms.

Irene Lingers

We may have spoken too soon in our last Sunday Summary, regarding the hype centering around, and the damage caused, by Hurricane and Tropical Storm Irene, as the effects of the storm still linger.  As of this morning, the death toll had risen to at least 44 in 13 states, and nearly 2 million people were still without power.  Early estimates pin the damage somewhere between $7 billion and $10 billion.

Possibly, and ironically, the state most devastated by the storm would be one of the last states to see it--Vermont.  Up to 11 inches of rain fell in spots there, swelling creeks and rivers already flowing briskly with a rather heavy winter's runoff, which in turn washed out roads and cars and not a few of those picturesque (not to mention historical) covered bridges.  Thousands remain stranded there, cutoff by the flooding and the damage it has caused.  National Guard helicopters have had to airlift food and water into the stranded communities. 

We can see more clearly now the dynamic of what was purported to be the "hype" of the storm that didn't seem to pack the punch that everyone had expected.  Hurricanes and tropical storms are known for, and categorized by the winds generated near their core.  Hence, as she first made landfall as a category 1, then continued up the east coast as a tropical storm, all wondered where the winds were.  The initial urgency of the storm was then thought to be "hype."  Yet, the dashed expectations of heavy winds left everyone forgetful of deluge of rain that these storms also carry with them, and when that rain falls in places already saturated from recent rain and runoff, there is flooding.

Irene is now long gone, but many shall nonetheless be remembering her for some time to come.

To make matters even more compelling, as of this writing, another storm called Katia churns in the Atlantic ...

Sunday Summary

Well, most of the news this past week has been saturated (pardon the pun) with news of Hurricane Irene.  We must therefore include it in today's Sunday Summary.

Oddly enough, what is most historical about Irene is the damage that it didn't cause.  By the time its first landfall in North Carolina, it had already lost much of its steam, and had been downgraded to a category 1 hurricane.  By the time it hit New York, it was merely a tropical storm.  Yet, in New York, the subway was completely shut down, and hundreds of thousands in the low-lying areas of New York were ordered, ordered by Mayor Michael Bloomberg to evacuate.  Yet, of the roughly 370,000 people ordered to evacuate, it is estemated that only 37,000 people complied.

To be sure, Irene did cause some damage, though in dollar terms, it's still being calculated.  As of this writing, 15 people are known to have died as a direct result of the hurricane, either from falling trees or floodwaters.  And many are still in the dark, after power outages affected more than 4 million people on the eastern seaboard.  Moreover, the deluge of rainfail inland of the coast still needs to drain, which still threatens the water level of the rivers that drain it back into the ocean.

However, the damage is rather minimal in comparison to what Irene was anticipated to cause, and so she was, on the whole, more hype than hurricane.  Without minimizing the loss of those 15 who died, (one harrowing report was of a woman's body pulled from her car, under 150 feet of water), 15 dead out of the 4 million otherwise affected by the loss of power gives one pause to consider that either the whole east coast was unbelievably lucky, or the hurricane wasn't at all what it was played up to be.  The most economical damage appears to be in New York, where a sizeable chunk of retail sales were anticipated lost this weekend--more a result of the city shutting down the entire weekend in preparation for the storm, than from the storm itself.

No doubt, much of the hype is generated by the media, which earns its bread on the sensationalism of stories, and which certainly loves natural disasters as backdrops for their "on-scene" reports.  Yet, and perhaps as an instance of poetic justice, they were let down by the rather unsensational nature of Irene.  According to one report, even CNN's Anderson Cooper, well-known for being the reporter in the thick of events like natural disasters, seemed somewhat let down as he reported from New York.  According to Toby Harnden, the U.S. Editor of the Daily Telegraph, "He looked crestfallen fell briefly silent when a weatherwoman told him that the rain was not going to get any worse. 'Wow, because this isn't so bad,' he said. 'It's an annoying rain but it isn't even a sideways rain.'"

Such hype was also, no doubt, played up by state, local and federal politicians, who, of course, would rather be safe than sorry, but also are trying to either boost or protect their image, especially after the latest hit to that image as a result of the national debt "crisis".  Moreover, the memory of the Federal Emergency Management Agency's mismanaged response to hurricane Katrina in 2005 still lingers in the minds of many, including those of politicians.  No one wants to go through that again. 

Say what we will about the hype, it is nonetheless a good thing that Irene didn't cause more damage than it did, and for that, we should truly be thankful.

Mother Nature Strikes the East Coast

Irene, a category 3 hurricane, is headed north-by-northwest, towards the United States east coast at this hour, packing 115-mph winds.  It is expected to hit the eastern seaboard this weekend from the Carolinas to New England.  All the advisories, watches and warnings have been issued by all the emergency service organizations.  Airlines have begun cancelling flights and moving planes out of harm's way.  Coastal residents are boarding up their homes and businesses.  U.S. Navy vessels homeported in Norfolk, Virginia have put to sea to "ride it out."  Governor Andrew Cuomo has already declared a State of Emergency for New York.

Of course, category 3 hurricanes that make landfall in populated cities will always make history, but we must particularly include Irene in this blog because it comes on the heels of a magnitude 5.8 earthquake that rocked Washington, D.C. just two days ago.  As the largest earthquake to strike the east coast in 67 years, it also could be felt as far away as New York, though causing only minor damage to buildings and monuments.  Nonetheless, Mother Nature appears to be having quite a summer with the eastern seaboard of the United States.

This blogger anticipates a number of explanations for this.  Some will claim, if they haven't already, that these two natural disasters are an example of the global climate change.  Others might believe it's God's way of punishing Washington D.C. for not resolving its debt and budget issues.  Such is the result of the human propensity to ask why these things have to happen.

Whatever the reason, our thoughts here regard the safety of everyone in that part of the country.  Take care, you guys.

Let the Oil Flow

February 17, 2011, Al Jazeera:  "Protesters in Libya have defied a security crackdown and taken to the streets in four cities for a "day of rage,"

February 21, 2011, guardian.co.uk: "Libya uprising forces oil price to highest point since 2008"

March 19, 2011, New York Times (World):  "American and European forces began a broad campaign of strikes against the government of Col. Muammar el-Qaddafi on Saturday, unleashing warplanes and missiles in a military intervention on a scale not seen in the Arab world since the Iraq war."

March 27, 2011, guardian.co.uk: "Libya:  NATO takes full control of military operation"

June 1, 2011, Al Jezeera:  "NATO has agreed to extend its military campaign in Libya until late September, keeping up pressure on Muammar Gaddafi still in power after 10 weeks of air strikes."

August 22, 2011, Reuters:  "NATO said it won’t curtail its five-month air campaign over Libya and will monitor any remaining threats posed by Muammar Qaddafi's military forces as rebels seeking to topple the 42-year regime swept into Tripoli."

August 22, 2011, New York Times (World):  "Col. Muammar el-Qaddafi's grip on power dissolved with astonishing speed on Monday as rebels marched into the capital"

August 22, 2011, New York Times (Business): "The Scramble for Access to Libya's Oil Wealth Begins"

'Nuff said.

Sunday Summary

Let's face it--the economy sucks, right now.

Most of us are aware that it doesn't help matters to say this.  After all, the prime mover for consumer economy is confidence, and to admit that the economy sucks is only likely to make it worse by deflating the confidence that everyone has that it's going to get better.  It may still, and will, hopefully, get better, but right now, it ... well, it's really tanking.

All most of us need do is take a look around them, if it hasn't effected them directly, already.  Especially here, in California, rents are up, houses are being foreclosed upon, small businesses are going under, "For Lease" signs are going up, people are struggling to find work, and are ever more thankful that if they have a job.  In the broader perspective, we hear more bad news, every day--the stock market is falling, unemployment is rising, the government has been spending ever more money to spur economic growth, so the national debt is through the roof, and all while the price of just about everything goes up.

Economists and bankers are only now beginning to suggest that the "risk of recession" is now "very great".  In an interview several days ago, President Obama said that he "doesn't think that the U.S. economy is in danger of falling into another recession."  But, seriously, who are these people kidding?  Have we even yet to really recover from the 2008 recession? 

Peter Schiff, an American investment broker, author, financial commentator, and former contender in the 2010 Republican Connecticut Primary, believes we're in a depression.  What gives him the confidence to make such statements is the credit he received from those in the financial world for noticing and commenting on the sub-prime housing "bubble" back in 2006, long before anyone realized it was even a bubble. 

If Schiff is right, it's very, very likely that the economy is going to get much, much worse before it ever gets better.  To him, the Federal Reserve is running a Ponzi scheme, effectively sanctioned by everyone; that Ben Bernanke is going to continue to print money until it becomes so devalued that it will collapse.  As it was during Germany's Weimar Republic, it will take barrowfuls of money to buy a loaf of bread.  And only those who have gold or silver, (used as money for millenia), will have any real purchasing power.  This prognostication is echoed by growing number of others in the public sphere, including Republican Presidential candidate Ron Paul.

Those of us who study history are not in the business of making prognostications.  However, we still have to feed our families, and to that end, it behooves us to have an understanding of the current economic climate.  Moreover, one of the very reasons to study history, and indeed, one of the reasons we began this blog, is because, in the oft-quoted phrase, "those who cannot remember the past are condemned to repeat it," and most of us, we're sure, wish not to have to live through an economic depression, if history is any guide.

... and It Keeps Getting Worse ...

Quite possibly the most important element of any economy is whether or not people have a job. 

Well, not to say that it was entirely unexpected, but unemployment has gotten worse, especially here in California, where, the U.S. Department of Labor reports, is back up to 12 percent, second-highest in the nation, exceeded only by Nevada.  Nationally, unemployment is down a tick, to 9.1 percent, from 9.2 percent in July.  And to be clear, these numbers don't include the discouraged and under-employed, which would likely add another ten points or so to that, at least in California. Totalled, that's almost a quarter of the workforce.

The unemployment rate for African-Americans is even higher, as nationally, 15.9 percent of blacks are without work.  Evidence for this could be seen in Georgia today, where, according to ABC News, "thousands camp[ed] out in their business suits and office heels and brav[ed] the tormenting heat in Atlanta to stand in line for a job fair" sponsored by the Congressional Black Caucus.  Authorities had to treat 20 people for heat exhaustion. 

To make matters even worse, Bank of America, one of those Corporations once called, "too big to fail", announced plans to cut up to 10,000 jobs in it's endeavors to restructure.  This is on top of roughly 2,500 job cuts already this year for BofA.

On the brighter side (in an attempt to find a brighter side, amidst such bleak news of late), to be sure, unemployment isn't as high as the national rate everywhere.  North Dakota's unemployment is at a meager 3.3 percent.  Nebraska's is only 4.1 percent.  And South Dakota's stands at 4.7 percent.  Only thing is, there are more people in California than there are in all three states combined.  Maybe the reason why there are so many unemployed, is because so few people want to live there.