While it fails to exceed the magnitude of the subprime swill in the U.S., it’ll be interesting to see if home prices in the red nation go the way of I.O.U.S.A. Add in China’s plummeting stock market and weakening export economy… we’re inclined to think Chinese housing has some more room to fall before the next leg up.

Investors pulled nearly $30 billion out of emerging market bond and equity funds from June-August, says EPFR Global today. That’s the biggest dollar amount of redemptions in at least 13 years, when the research firm started keeping track.

The MSCI Emerging Markets Index fell to 850 this week, its lowest level in a year and a half.

In the Gulf of Mexico, Hurricane Ike is setting his sights on the U.S. oil patch. The hurricane swept close to the U.S. coast overnight and has already triggered the shutdown of 7% of the country’s oil and gas output. Forecasters now predict Ike will make landfall in Texas on Friday or Saturday as a Category 3 hurricane, which poses an obvious risk to the litany of refiners there. Four refineries on the coast have already shut down as a precaution.

Over 15% of U.S. natural gas and 25% of its oil is produced in the Gulf.

So logically, crude oil is down a few bucks today, to $100 a barrel. Oil traders seem unfazed by Ike’s towering presence. The demand issue is moot today too.Yesterday’s weekly inventory report from the Energy Department showed far bigger declines in oil and gas stockpiles than the Street had anticipated. But before traders could buy back in, Saudi oil officials announced they would be willing to ignore OPEC’s order to cut production. If you’re buyin’ oil, Saudi Arabia will pump as much as you can carry home.

So all that’s moving energy markets today is the U.S. dollar. More on that in a minute. But first, we wonder, why does oil continue to plunge today in the face of so many bullish indicators?

“Oil has not plunged,” Byron King corrects us.

“This time last year — September 2007 — a barrel of oil cost about $80, and rising. I remember being in Houston in October 2007 — sitting about 10 feet from T. Boone Pickens and his wife — when oil crossed the $90 mark for the first time. Pickens commented, ‘We’ll see $100 oil before we ever see $80 again.’

“Pickens was right. Today, a barrel of oil is trading for about $107, or about a 33% increase year over year. That’s no plunge.

“Oil is down 27% from its recent high. But that’s after more than doubling in the past year. So the recent price retreat is not a plunge. It’s just a correction within a long trend of rising prices for energy.”

Also catching headlines in the oil patch today — and you’ll NEVER believe this — the government officials who handle energy royalties in the U.S. have been accused of corruption . Gasp!

The media is shocked to learn this morning that at least 13 members of the government’s Minerals Management Service are accused of accepting gifts from major energy companies, including vacations, dinners, drugs and sex. Frankly, we’re shocked that’s all they were caught doing.

“It’s open season,” notes Byron, “on the idea of leasing and energy development on federal lands. There’s a clique out there — the usual suspects — that is looking for any reason to derail the energy development process for fossil fuels. What better way to do this than to highlight how the ‘process is broken.’ OK, a few people are crooked… so that means we can’t do what the energy developers want to do, right? Screw that ‘Drill, drill, drill’ stuff, eh?”

As we mentioned, the dollar rally is forging ahead again today. The dollar index surpassed that 80 mark we told you about yesterday and now scores 80.2, a one-year high. The euro has fallen to $1.39, nearly a one-year low. At $1.74, the pound is just a breath away from a 2½-year low.

And the Japanese yen continues to buck the trend. $1 can score you 106 yen today, the highest exchange rate for the Japanese currency since July.

Dollar buyers are brushing off today’s trade balance report. The dollar barely responded to news of the biggest U.S. trade deficit in 16 months. The deficit increased 5.7% in July, to $62.2 billion, $4 billion larger than Wall Street anticipated.

If you’re short gold, or looking to buy the stuff at a discount, you’ve had a hell of a week. The precious metal is down again today, this time by another $20, to $750. That’s about $50 short of a one-year low.

Stocks continued their erratic ways yesterday. After some big swings up and down, the Dow finished up 0.3% and the S&P 500 rose 0.6%, while the Nasdaq enjoyed 0.8% gains. Investors found some comfort in the Lehman Brothers announcement to spin itself off and clear up its balance sheet.

But today, those plans are being exposed for what they are… just plans. Without tangible hope in sight, Lehman is back in the doghouse today. The company was slammed with several brokerage downgrades this morning, and opened down 44%. Ouch. Other financials, like AIG and Washington Mutual, are feeling the pain today too.

We told you about a wave of post Fannie/Freddie regional bank failures on Tuesday. Well, Warren Buffett is telling you the same thing today.

Kansas Bankers Surety, a Berkshire-owned insurer, has been given orders to stop selling private bank insurance above the FDIC-guaranteed amount. KBS refused to say whether the order came straight from Buffett.

Eleven banks have failed already this year, including one a stone’s throw from KBS — Columbia Bank & Trust of Topeka.

Pages: 1 2 3

Pages: 1 2 3