Tuesday, October 21, 2008

Oil speculators off the radar


With crude oil prices at about half their painful July peaks, what became of the push to stop the evils of speculation?

It's hard to stay upset, after all, when gasoline at the pump has fallen to the $3-a-gallon range, from $4, and seems headed even lower.

OPEC, some of whose leaders railed the loudest against market speculators a couple of months ago, called an emergency meeting for this Friday to address the price drop. Analysts believe the cartel could decide to cut oil production by a million barrels per day.

Light, sweet crude finished last week at $71.85 a barrel compared with the summer high of $145.29 on July 3.

"One gets the sense that OPEC is beginning to panic," says Stephen Schork, Villanova-based energy consultant.

Back in May, when crude was at $135 a barrel and rising, I proposed five possible ways to stop the price escalation: reduce demand for oil, pump way more out of the ground, quell speculation, strengthen the weak dollar, and usher in a recession.

Only one of these - a substantial increase in oil production - didn't happen in the intervening months. The rest have come to pass, or are about to - sorry to say - in the case of the looming recession.

As for the speculators, they've unwound their positions. In fact, two summer reports, including one from the industry-funded Energy Policy Research Foundation, found that speculation had only a limited role in the oil bubble.

"And it's not a feature in why they're running down," Lucian Pugliaresi, the foundation's president, told me Friday. It issued one of the summer reports.

And, after some huffing and puffing, Congress did nothing about reining in wild speculation.

Perhaps lawmakers will take up the subject after the elections, but Pugliaresi doubts that. "The Congress is going to be extremely busy next year. I find it hard to believe that this will be at the top of their list."

McCain is pulling out all the stops in Pa.

Despite polls showing him trailing Democrat Barack Obama by double digits in Pennsylvania, John McCain continued to treat the state as if the whole election depended on it.

Yesterday, his wife, Cindy, made four stops in Philadelphia and Yardley, speaking at two rallies, visiting a hospital, and meeting the mothers of men and women in the military.

Today, the Republican nominee has three appearances in Pennsylvania, starting with a morning rally in Bensalem. He made two visits to the Philadelphia suburbs last week, and running mate Sarah Palin was in Lancaster over the weekend.

"It sure doesn't sound like a campaign that's pulling up stakes," said Chris Borick, a political scientist and pollster at Muhlenberg College in Allentown.

All the McCain activity is happening in a state where Democrats outnumber Republicans by nearly 1.2 million, double from four years ago; where Obama, flush with cash, is outspending McCain on television by several orders of magnitude; and where the Democrats have an organizational advantage.

Indeed, Obama - who announced last night that he will leave the campaign trail Thursday and Friday to visit his suddenly seriously ill grandmother in Hawaii - apparently feels comfortable enough about his position in Pennsylvania that he has no plans to return to the state before the middle of next week.

G. Terry Madonna, director of the Center for Politics and Public Affairs at Franklin and Marshall College in Lancaster, said of the McCain campaign: "I think they're still here because they can't get out. They can't pull out because it would be psychologically devastating to their campaign nationally."

The last five public polls have Obama ahead in the state by 12 to 15 points.

McCain's aides say they remain optimistic about their chances in Pennsylvania for the same reasons they focused on it in the first place.

Although the state went Democratic in the last four presidential elections, the margins of victory were modest. The state has a lot of older, socially conservative voters with whom Obama has struggled, and Obama ran poorly in the Democratic primary.

State party leaders also believe they have a chance to do well enough in parts of South and Northeast Philadelphia to hold down Obama's margin of victory in the city.

With the Democratic ticket leading in many of the states President Bush carried in 2004, McCain needs a blue-state breakthrough.

"We will win Pennsylvania, and those 21 electoral votes will be the margin that puts us over the top," campaign spokesman Peter Feldman said. "We wouldn't be here unless we were 100 percent confident of that."

The good news for McCain is that the national polls seem to have tightened somewhat. From a peak last week of more than seven percentage points, Obama's average lead stood slightly above five yesterday.

Obama said in an interview on NBC's Today Show: "We think that the race will tighten, just because that's what happens at the end of campaigns."

In the same interview, Obama said Gen. Colin Powell, who endorsed him Sunday, would serve "as one of my advisers," with or without a formal role, should Obama become president.

McCain spent the day in Missouri, which President Bush carried in 2000 and 2004. There, he seized on comments made Sunday night in Seattle by Joseph R. Biden Jr. The Democratic vice presidential nominee warned that if Obama were elected, "we're going to have an international crisis" within six months, "a generated crisis, to test the mettle of this guy."

Said McCain: "We don't want a president who invites testing from the world at a time when our economy is in crisis and Americans are already fighting in two wars."

Obama campaigned yesterday in Tampa, Fla., where he was introduced by David Price, the pitcher who saved the game that sent the Tampa Bay Rays into the World Series against the Phillies.

"I've said from the beginning that I am a unity candidate, bringing people together," Obama said. "So when you see a White Sox fan showing love to the Rays, and the Rays showing some love back, you know we are onto something right here."

When he campaigned in Philadelphia during the National League Championship Series between the Phillies and the Dodgers, Obama said he was rooting for the Phils.

Obama also talked about the criticism from McCain over Obama's plan to revoke the Bush tax cuts for individuals making at least $200,000 and families making $250,000, and to give a tax cut to all working people who make less.

The Democrat noted that McCain opposed the Bush tax cuts in 2001 on the grounds that they benefited the wealthy rather than middle-class Americans in need of relief.

"Well, he was right then, and I am right now," said Obama, whose Florida visit coincided with the start of early voting in the state.

Later in the day, former Democratic rival Hillary Rodham Clinton joined Obama at a rally in Orlando, where more than 50,000 people gathered outside a sports arena to see them side by side. It was the first time the bitter primary opponents had appeared together since a pair of fund-raisers in July.

The two played off a Republican theme by saying this election's theme should be "jobs, baby, jobs" for people hurting in the economic crisis. The GOP has coined the chant "drill, baby, drill," referring instead to oil and gas exploration.

Later, as Obama spoke, he picked up the chant at his audience's urging. "Jobs, baby, jobs - you like that, don't you?" he said to cheers.

In Philadelphia yesterday, Cindy McCain traversed the area in the company of former New York Mayor Rudy Giuliani and the wives of two Republican senators and two Republican governors.

At a rally at the National Constitution Center, she warned against the dangers of having Democrats in charge of the House, the Senate and the presidency, and praised her husband's qualifications for chief executive, saying: "He may not be a man for all times . . . but he's certainly a man for these times."

Yesterday, the McCain campaign said it had $47 million cash on hand at the start of October, out of the $84 million in federal funds it received in September for its general-election campaign. The Obama campaign, which rejected federal funding, said Sunday it raised $150 million in September alone.

Tuesday, October 7, 2008

Ocean City and Doylestown Earn BFC Honorable Mentions


The Bicycle Friendly Community Campaign is an awards program that recognizes municipalities that actively support bicycling. A Bicycle-Friendly Community provides safe accommodation for cycling and encourages its residents to bike for transportation and recreation. The League of American Bicyclists administers the Bicycle Friendly Community Campaign.

Once again no community in the region has earned bicycle friendly community status. Philadelphia received an honorable mention in 2006, in 2008 Doylestown and Ocean City were the latest to receive an honorable mention from the BFC Board.

This designation is one with real meaning—it is difficult to earn and important to renew. There are now 96 awarded communities in 32 states. Since the program’s inception in 2003, 245 communities have applied. “In this round, 10 communities were given honorable mentions,” Clarke said. “It is important to recognize communities as they begin to build bicycle friendliness into their network. But a designation only goes to communities with established records in two or more of the five categories.”

The five categories local and national reviewers look at are:

Education: Does the community have systems in place to train children and adult cyclists?

Engineering: Are bicyclists included in the city’s transportation plan?

Enforcement: Do police officers understand and enforce bicyclists’ rights and responsibilities?

Encouragement: Does the community participate in Bike Month, offer bike rodeos, host community bike rides, or otherwise encourage cycling?

Evaluation: Does the community have methods in place to ensure their bicyclist programs are making a difference?

Market dive makes Philadelphia's most valuable companies less so

What is it about Mondays in October?

Yesterday’s declines in all major stock market indexes won’t earn a colorful name like Black Monday. But seeing intraday percentage drops of 7 to 8 percent was pretty unnerving.

The Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 domestic stocks, is often seen as the proxy for the entire U.S. equity market. Those who track it say yesterday’s downdraft blew away $500 billion in market capitalization.

I looked at 25 U.S. companies either based in the Philadelphia area or with significant operations here and calculated that collectively they lost nearly $33 billion in value yesterday alone.

JPMorgan Chase & Co., which employs thousands in northern Delaware, saw its market cap drop $6.5 billion from the end of trading on Friday to Monday’s close. If you’d owned 100 shares of JPMorgan, your holdings dropped $190 in a single day.

Stocks don’t get much more defensive than Johnson & Johnson - Band-Aids, Listerine, Tylenol and baby shampoo. But even J&J got bruised by $4.6 billion in lost market value.

Utilities were no safe haven either. The market storm zapped $2.5 billion in market value from Exelon Corp., the parent of Peco, the region’s biggest electric and gas service provider.

While many were glued to scrolling tickers throughout the afternoon on cable news channels, Comcast Corp. lost $800 million from its $53.6 billion in market cap on Friday.

The picture was no different if they happened to be watching Verizon’s FiOS TV service. Verizon Communications Inc. was worth $3.6 billion less by the day’s end.

Radnor-based Lincoln National Corp. had it particularly rough among local stocks. Shares of Lincoln closed at $33.60, down $5.63 or 14 percent. An owner of 100 shares would have a one-day paper loss of $563.

Of the 25 big local stocks I reviewed, only one finished the day higher. Given the intensifying global credit crisis, it stands to reason that that stock would be a bank: PNC Financial Services Group Inc. Shares of the Pittsburgh-based bank rose $1.25 to close at $75.40.

comment