Dow Slides 394 Points; Oil Surges $10.75

Freedumb, Freedumb, Read All About It! "In a world of exploding human population, with its myriad needs, wants and desires, the economy keeps falling, with more and more working people around the world, poorer, lacking basic needs and going hungry. Freakohnomics: The new 21st Century Supply & Demand Economics - absolute greed, absolute power brings on absolute madness - Turns into Freakohnomics gone berserk? Or mafia economics by deliberate Design - the greater the need, the higher the price of all commodities required to sustain Life? The Outcome, economic strangulation and workaholic enslavement of a people was not designed by the lord thy God, nor is it Nature's Law, nor a scientific law

The Deadly Dangers of a Mis-informed, Dis-informed & Un-informed Population, Ultimately to Itself, History Provides Ample Evidence.

The Solution: The Promise of New Energy Systems & Beyond Oil

Evaporates the Problem: The ill designed "Corporism: The Systemic Disease that Destroys Civilization."

Mild shock and disbelief barely registered in the nation of the most productive, overworked, underpaid, underinsured, vacation deprived, low paid slave/workers in the world, as they watched their bridges fall down along with their retirement savings in equity & stocks, while their taxes, gas, energy and food costs continued skyrocketing to uncharted realms and many continue to lose their homes and go hungry; as the masses stagnated in unmovable traffic, and government departments threatened to close due to lack of funds - On the bright side, the worldwide corporate 2% greedy guts, individually, had aplenty, more wealth than 30 nations combined, apiece.... irrelevant to who is paying for their errors (as in subprime loans).

As common sense in science is lost with the continued stagnation of our energy base and deep troubling theoretical foundational issues in physics, so too, Civilization's Survival Parameters fly out of sight, out of mind, along with the values and morals inherent within new scientific understanding which new energy systems would reveal. Scientific Stagnation bodes an ill wind to evolution, sustainability, and survival as "cycles of humiliation, dumbing us down, violence, and Unrestrained Corporate Greed prompting resource wars with nuclear finality" join hands with global warming and ecological imbalance to precipitate the historical "rise and fall of civilization" - a Tsunami accelerating toward us with a far more spectacular event than the legends and myths of 'Atlantis and Lemuria"........ had more people known that Energy from Corn (or going backwards to a dimwitted concept of radioactive nuclear power application ) sounded a wee bit kindergartenish and senile for the twenty first century......the Future may have had a chance.



June 7, 2008
Dow Slides 394 Points; Oil Surges $10.75
By ABHA BHATTARAI

June 7, 2008
Oil Prices Skyrocket, Taking Biggest Jump Ever
By JAD MOUAWAD

Wall Street suffered its worst losses in more than two months on Friday after crude oil prices spiked over $138, an increase of nearly $11, and the unemployment rate rose more than expected.
All 30 of the stocks that make up the Dow Jones industrials took a hit as the index dropped nearly 400 points on fears that high energy prices will extend and deepen an economic slowdown.
“The market is meeting its worst fears right now,” said Quincy Krosby, chief investment strategist at the Hartford, a financial services firm.
At the close, the Dow was off 3.13 percent, or 394.64 points. The broader Standard & Poor’s 500-stock index fell 43.37 points, or 3 percent, to 1,360.68, its lowest point in four months. The technology-laden Nasdaq composite index declined 75.38 points, or 2.96 percent, to 2,474.56.
Shares opened lower after the government reported that the unemployment rate in May increased the most in one month in 22 years. The decline accelerated as crude oil rose steadily, closing $10.75 higher in its biggest one-day climb ever.
“Oil prices have reached the tipping point,” said Richard Sparks, an analyst at Schaeffer’s Investment Research. “Prices have rallied for a good two months, but now it’s really weighing on the market.”
Friday’s session wiped out the markets’ gains on Thursday, and left all three major indexes down for the week. The Dow fell 3.39 percent for the week, the S.& P. 500 was off 2.83 percent and the Nasdaq had a loss of 1.91 percent.
Wall Street has run into choppy waters over the last two weeks after a period of relative calm. Friday’s decline was a return to the triple-digit collapses of February and March, when the market was rocked by the Bear Stearns bailout and significant interest rate cuts from the Federal Reserve.
The last time the Dow fell this much was at the beginning of the subprime mortgage crisis in February 2007.
On Friday, the blue-chip index was dragged down by shares of American International Group, the big insurer, which stumbled after accusations that the company may have overstated the value of contracts tied to subprime mortgages.
A.I.G.’s shares fell $2.48, or nearly 7 percent, to close at an 11-year low of $33.93.
Shares of financial firms and companies that depend on discretionary spending were the hardest hit, as investors worried that the weak labor market was likely to raise anxieties among some Americans and put a pall on spending habits. Friday’s report from the Labor Department said that the economy lost jobs for the fifth consecutive month and the unemployment rate surged to 5.5 percent in May, from 5 percent in April, the sharpest monthly rise in 22 years.
Investors are also worried that high energy prices will further slow the economy.
“If oil prices stay this high, you’re going to have to re-examine your estimates for G.D.P., inflation and consumers’ ability to spend outside of nondiscretionary items,” Ms. Krosby said. “This has all of the elements of an investor’s worst-case scenario.”
Oil prices surged almost 8 percent, to $138.54 a barrel after a senior Israeli politician raised the specter of an attack on Iran and the dollar fell against the euro.
“As soon as that news hit the tape, oil spiked about $6,” said David Kovacs, an investment strategist at Turner Investment Partners.
Prices were buoyed further by a report from Morgan Stanley that predicted oil would reach $150 a barrel by July 4 because of higher demand in Asia. Shares of General Motors, whose fortunes can depend on oil prices, fell more than 4 percent, to a record low.
Mr. Sparks added that the market was also taking a hit from a string of bad news that came out earlier this week, including Standard & Poor’s downgrading of Lehman Brothers, Merrill Lynch and Morgan Stanley and the ousting of Wachovia’s chairman.
“All of this has culminated and it’s bringing the boogeyman back out of the closet,” he said.
Bond prices jumped on Friday as investors sought the safety of Treasuries in the volatile market.
The benchmark 10-year Treasury note rose 1 2/32, to 99 23/32. Its yield, which moves in the opposite direction, fell to 3.91 percent, from 4.04 percent.


June 7, 2008
Oil Prices Skyrocket, Taking Biggest Jump Ever
By JAD MOUAWAD
The rise in oil prices turned into a stampede on Friday with futures jumping a staggering $11 a barrel to set a record above $138 a barrel. The unprecedented surge came as the dollar fell sharply against the euro and a senior Israeli politician once again raised the specter of an attack against Iran.
Friday’s jump capped a second day of very strong gains on energy markets, and fueled suspicions that commodities might be caught in an investment bubble.
Oil prices have doubled in the last 12 months, and are up 42 percent since the beginning of the year. Oil futures surged $10.75, or 8 percent, to $138.54 a barrel on the New York Mercantile Exchange, their biggest jump since contracts began trading in 1983. The record rise brought a two-day jump of over $16 a barrel, after Thursday 5.5 percent gain.
“This market is going to shoot itself in the foot,” said Adam Robinson, an energy analyst at Lehman Brothers. “It is searching for a price that will build a safety cushion in the system — either as inventories or as spare capacity. This takes time. But the market has gotten extremely impatient and is not willing to wait.”
The latest jump came as the dollar lost more than 1 percent against the euro amid bleak economic news that fanned recession fears. The unemployment rate surged to 5.5 percent in May, the government said, the biggest increase in more than two decades.
Friday’s negative news pricked a budding sentiment in Wall Street that the financial system was on the mend and stocks fell sharply. The Dow Jones industrials lost 394.64 points, or 3 percent, to 12,209 points, with financial stocks showing the biggest drops. The broader Standard and Poor’s 500-stock index fell 3 percent, its biggest drop since February.
The strong volatility in energy markets in recent weeks continues to puzzle traders. Prices keep rising despite a lack of shortages in the market, and strong evidence of lower consumption in industrialized countries. But investors are caught in a bullish mood, focusing on the perceived risks to future oil supplies and the growth in oil demand from emerging economies, where fuel prices are subsidized.
Even as uncertainties abound about the fundamentals of the energy market, geopolitical tensions in the Middle East regained center stage after Israel’s transportation minister and a deputy prime minister, Shaul Mofaz, said Friday that an attack on Iran’s nuclear sites looked “unavoidable” if Iran didn’t abandon its nuclear program.
Iran is the second-largest oil producer within the OPEC cartel and exports close to 2 million barrels a day. Because the world has few supplies to spare, any interruptions in Iran’s exports could push prices to higher levels. The world currently has about 3 million barrels a day of spare capacity, and consumes 86 million barrels a day of oil.
“The return of the Iranian risk premium calls for a careful assessment of the potential oil supply impact of military strikes on Iran,” said Antoine Halff, an analyst at Newedge, an energy broker. The “comments bring home the point that the dispute over Iran’s nuclear program remains unresolved and that the risks of military confrontation are indeed increasing.”
Investors also reacted to the latest forecast by a large Wall Street bank that oil prices would keep rising. Morgan Stanley predicted that prices would spike to $150 a barrel in the next month because of strong demand from Asian economies.
The threat of a strike by Chevron’s workers in Nigeria also fueled concerns that some production could be shut down. A similar strike by Exxon Mobil workers last April, which lasted a week, reduced Nigerian output by 800,000 barrels a day, or nearly a third of the country’s daily exports.
A strike might delay the start of Chevron’s 250,000 barrels-a-day Agbami project, the country’s largest offshore venture, which is slated for June 15.
One view that has been gaining ground is that the commodity market is caught in a speculative bubble akin to the housing or technology bubble of the late 1990s. That theory was raised by politicians in Washington and a slew of OPEC producers, who blame speculators for the staggering oil rally. Speaking before Congress recently, George Soros, a prominent hedge fund investor, said the current oil markets presented some characteristics of a bubble.
“I find commodity index buying eerily reminiscent of a similar craze for portfolio insurance, which led to the stock market crash of 1987,” Mr. Soros said earlier this week. But he cautioned that an oil market crash was not imminent. “The danger currently comes from the other direction. The rise in oil prices aggravates the prospects for a recession.”
But many analysts say that fundamentals, not speculation, are driving prices.
“I don’t know how else to say it, this is not a bubble,” Jan Stuart, global oil economist at UBS, said. “I think this is real. There is a whole bunch of commercial buyers out there who are spooked and are buying. You are an airline, right now, you’re scared. I don’t see who would buy at these prices unless they need to.”
Jeffrey Harris, the chief economist at the Commodity Futures Trading Commission, who was speaking before another Senate committee last month, said he saw no evidence of a speculative bubble in commodities. Instead, Mr. Harris pointed out to a confluence of trends that have contributed to the oil price rally, including a weak dollar, strong energy demand from emerging-market economies, and political tensions in oil-producing countries.
“Simply put, the economic data shows that overall commodity price levels, including agricultural commodity and energy futures prices, are being driven by powerful fundamental economic forces and the laws of supply and demand,” Mr. Harris said. “Together these fundamental economic factors have formed a ‘perfect storm’ that is causing significant upward pressures on futures prices across the board.”