May, being a hard act to follow
God created June…

Peak this…peak that…

This just in from a Dear Reader, throwing our own words back in our face:

“‘Now, it appears that the gains from mechanization, bioengineering, chemistry and land clearing may have reached their limits. We may soon reach Peak Food’

“Now, let me ask: Has the DR morphed into a Marxist newsletter or something?”

Another reader was more flattering…

“Your writing reminds me of H.L. Mencken, after he had his stroke. But seriously, the one thing that marks human history…above all else…is the constant rise in population and the constantly improving technology to support it. I don’t see any reason why that basic theme should change. Peak Food? Don’t trouble yourself about it…”

Don’t worry about us, dear readers…we have not lost a wink of sleep to the peaks…neither Peak Oil nor Peak Food bothers us. No, it is not the peaks that disturb our sleep…it’s the valleys.

As our Dear Reader points out, we’ve faced peaks before. Many of them. Somehow we’ve made it over them – and then scooted down the other side. That’s how history works – like topography. Peaks, valleys, and broad, fertile plains. What more could you ask for?

We’ll return to the Peaks in a moment…but first let us look around…and get the lay of the land.

Oil sold off last week…and ended at $127. Gold rallied on Friday, but still ended the week considerably down.

Last week, we thought we saw an important break in the terrain. Speculators were betting that the Fed would reverse course and begin raising interest rates. This boosted the dollar, whacked gold, and sent the bond market tumbling. Lower bond prices come with higher yields; soon, the economy begins to sulk as if it had been punished.

“US mortgage rates leap ahead as investors bet on move from Fed,” is the headline in the Financial Times this morning. Thirty-year fixed-rate mortgages rose above 6% for the first time in nearly three months; jumbo mortgage money cost 7.21%. Ten-year notes, meanwhile, fell to yield more than 4%.

Ain’t markets wonderful, dear reader? All that hard work that the feds have been doing – all designed to keep rates low so that people would borrow more money; it can all be undone by a day’s trading!

“The surge in mortgage rates will make it more expensive to buy homes and less likely that existing homeowners will be able to refinance mortgages. That in turn, is likely to dampen hopes of an early recovery in the US housing market,” explained the FT .

What went wrong?

Ah…remember the “crude oil vigilantes?”

When the Fed began cutting rates last September, the price of oil shot up. High oil prices are now oozing into the entire economy…greasing up prices for everything from cucumbers to diapers. And the trends that held consumer prices down for so long are shoving them in the other direction. Labor costs were forced down, for example, as hundreds of millions of Asians entered the worldwide job market. But now those laborers are cooking with gas…and driving automobiles…and eating regular meals – competing with Americans for food and energy, and driving up prices even as the U.S. economy goes into a slump.

Here is the latest from the Associated Press :

“Indonesians are staging protests against shrinking gasoline subsidies in a nation where nearly half the population of 235 million lives on less than $2 a day. And there are now 887 million vehicles in the world, up from 553 million vehicles just 15 years ago, and on track to nearly double to a billion by 2012, according to London-based consultancy Global Insight.

“So as oil prices have soared, average U.S. [gasoline] prices have gone up 144 percent in the past five years – from $1.67 in May 2003 to $4.02 a gallon this month, according to the U.S. Energy Information Administration. Over the same period, gas prices in France went up 117 percent to $9.66 a gallon.

“Proposals by U.S. presidential candidates John McCain and Hillary Clinton to suspend federal gas taxes this summer would lower the price tag – but have little effect on the underlying oil price. French President Nicholas Sarkozy has urged the EU to cut value-added tax on fuel.

“French fishermen and farmers, who need fuel for their trawlers and tractors, say their livelihoods are threatened by soaring prices and have blocked oil terminals around France and shipping traffic on the English Channel to demand government help. Italian, Portuguese and Spanish fisherman joined them and went on strike Friday. British and Bulgarian truckers are staging fuel protests, too.

“Turkey faces similar problems – and even higher prices – $11.29 a gallon, which for a full tank in a midsize car can reach nearly $200, enough for a domestic plane ticket.”

This is just the tip of the iceberg…keep reading here .

Michael Lynch, president of Strategic Energy & Economic Research, believes the long-term trend is down.

“Certainly, a political disruption of oil supplies — civil war in Nigeria, major fighting in southern Iraq, attacks on Caspian pipelines — could occur and would send prices sharply higher, but overall there is a greater likelihood that prices will drop in the next few years, and perhaps sharply,” Lynch wrote.

But John Person, president of National Futures Advisory Service, said he wouldn’t be inclined to call a top “until we close back under the $118 level, which was close to the high made last month.”

All of which is of little concern to drivers, who watched as the retail price for a gallon of regular gasoline climbed to another record of $3.962 Friday, according to AAA’s Daily Fuel Gauge Report. That’s up 24.2% from a year ago.

Source: Oil Little Changed – Gallon of Regular Sets Another Record

I managed to pack in four barbecues (or “cookouts” to put it in American lingo) over the weekend – all pretty close to home – so not too much damage done. And with soaring gasoline and food prices contributing to a projected 3.6% rise in consumer prices this year, it might be the best way to go.

Gas prices obviously remain front-and-center of the news, so let’s check in and see how it’s affecting consumers on both sides of the Atlantic, plus an industry that is arguably getting hammered even harder.

National Average Gas Price

Following a daily march higher over the past three weeks, the current national average gas price per gallon sits at an ugly $3.93. But with gas in 11 US states already over $4 a gallon, this number is now more for headlines than anything else. Bottom line: It’s expensive!

Little wonder that AAA projected a drop in Memorial Day travelers this year – the first decline since 2002. Many have also scaled back their plans, due to rising gas prices. And MasterCard reported a 7% drop in gas sales in the week leading up to the holiday.

But it wasn’t just Americans feeling the pressure at the pump this weekend…

Truck JamLike in the US, Monday was also a holiday in Britain, with the long weekend giving Brits a similar chance to hit the road for a short break.

Trouble is, UK gas prices are 17% higher than this time last year, with diesel prices almost 30% higher. The national average is currently $1.14 a liter and $1.26 a liter respectively. In US terms, that’s about $10.16 and $11.23 per gallon.

You can see why 16% of respondents to an Automobile Association survey said they plan to use their cars less.

What bothers many Brits, though, is that about 60% of fuel costs go into the government’s coffers in taxes. And today, the nation’s truckers took their protest to the streets.

In a mass demonstration against high prices and the government’s planned 2 pence per liter fuel tax rise (set to come into effect in October, having been postponed from April), hundreds of truckers set off from various parts around the UK and conducted a “go-slow” along the motorways.

One convoy ended at London, where the truckers handed a petition to the government at Downing Street. The other convoy, starting from further afield, handed its petition to the Welsh Assembly in Cardiff because (ironically), the trip to London would have cost too much.

The underlying problem that the trucking industry faces today is certainly not exclusive to Britain, though. High fuel prices are hammering both British and American truckers. So could America see a similar backlash?

America’s Big Rigs Have Big ProblemsActually, it already has. You may remember some truckers driving their rigs to the Capitol in Washington, D.C. in early April to protest against high fuel prices and imploring Congress to provide some relief measures.

You can see why. While diesel prices are up 30% in Britain over the past year, the price has blasted 80% higher in the US – from $2.50 a gallon this time last year to $4.50 today, according to the New York Times.

When it costs $1,125 to fill up a 250-gallon fuel tank, that clearly crushes any kind of profit margin that trucking companies hope to generate.

In fact, the American Trucking Association says times are so tough today that during the first quarter, 935 companies with fleets of five trucks or more went out of business. That’s up an astonishing 143% from the 385 in Q1 2007 – and is the worst quarterly “bust rate” since 2001.

In total, 45,000 trucking vehicles have permanently pulled off America’s highways since early 2007, according to America’s Commercial Transportation Research.

The domino effect of this is far-reaching. Reduced profits can erode employee wages, decrease supplies of goods, and create more potential for failing companies. In turn, that can cause bankruptcy and dents GDP growth.

So is there a way to play these developments?

Hit The Road (The Railroad, That Is)In a desperate attempt to offset some of the costs, some trucking firms are turning to rail companies.

While trucks can only haul so much and are directly impacted by rising gasoline costs, rail companies can absorb soaring oil prices more easily, as they can haul more goods. A few of the biggest names in this area include:

Burlington Northern Sante Fe (NYSE: BNI) – a firm that Warren Buffett has invested heavily in… Union Pacific Corp (NYSE: UNP)… and CSX Corp (NYSE: CSX).

All three are also members of the Dow Jones Transportation Average (^DJT), which is a remarkable story itself…

Transports Bust The TrendRemarkably, despite the march in oil prices to over $130 a barrel, that hasn’t stopped the Dow Transports from surging, too.

This is a major reversal in the historical trend. Oil prices and the Dow Transports usually move in opposite directions – and you’d think that with fuel being the biggest expense for Transportation Index companies and high oil prices pressuring so many areas of the transportation sector, the index that represents these firms would also be under severe pressure.

Not so. The DJT is actually up 15% in 2008, and as my colleague Jim Stanton reported in his bi-weekly “Sector Watch” column last Monday (May 19), the index raced to an all-time high of 5,550.17 on the same day. Jim applied some technical analysis to the index – and how to play the next move profitably through the index’s ETF – so take a look.

With the index made up of airlines like American (NYSE: AMR), Continental (NYSE: CAL), JetBlue (Nasdaq: JBLU) and Southwest (NYSE: LUV), plus shipping companies FedEx (NYSE: FDX) and UPS (NYSE: UPS) – all of which are buckling under the weight of high oil and gas prices – economists are now hotly debating whether it’s throwing the market a curveball.

Traditionally seen as a sign of US economic strength and turnarounds, the fact that the index is soaring while consumers and the economy are struggling is a source of confusion.

If you are watching all of this subprime, Alt-A, CDO derivatives crap lose money by the ton and wonder how badly you are going to be hurt since that toxic crap is seemingly everywhere, then you will be interested in Junior Mogambo Ranger (JMR) George P. sending me the news from Bloomberg.com that “Standard & Poor’s lowered its assumptions for how much money investors will recover after defaults of mortgage-tied collateralized debt obligations.”

Naturally, I am curious as to what “lowering assumptions” means to these S&P people, as I have recently been told by my family that they have “lowered” their assumptions again, too, and that they now collectively assume that I have hit bottom, and am now “the worst husband and father in the whole world”, and that they have decided that they will all be forced to live out their stupid little, pathetic lives in “anger, hate and misery”, which sounded about right to me, too, as in “welcome to my world, chumps!”

But this is not about me and my family – who have so discerningly figured me out – but about how people are going to be losing their butts with the stupid idea that they can “invest for the long-term” by letting “investment professionals” invest their money for them in things that pay high commissions. Now it has turned out that “The most-senior bonds from the CDOs originally rated AAA should recover 60 percent of principal owed, while securities rated A or lower will get nothing, S&P said.” Yikes! Nothing! What in the hell kind of long-term investing is that? Hahaha!

People in the office started complaining about the disgusting way I sat there, apparently paralyzed but perversely drooling and humming the theme from Gilligan’s Island, as I tried and tried in vain to fathom how much money that is, but it is measured in trillions of dollars! Trillions!

And getting back a measly 60 cents on the dollar for some CDO assets, and zero cents on the dollar on others, is a lot of money, measured in untold numbers of trillions of dollars (with knock-on effects), too, which means a LOT of money, which I will further emphasize by using several exclamation points, as in “that’s a freaking lot of money to lose!!!”

And these hotshot S&P analysts are not through dispensing terrifying news, as they go on, “Investors should recover 35 percent of principal after defaults on securities from the CDOs junior to their so-called super-senior classes but also originally rated AAA.”

And, even more, “Recoveries on the most-senior originally AAA rated securities backed by Alt-A, subprime, or home-equity loans or tax liens will likely be 80 percent, while for junior AAA securities they should be 65 percent. Alt A bonds initially rated A should recover 35 percent, while similar securities backed by the other types of loans will recover 10 percent.”

By this time, all these numbers add up to, as I previously indicated, “a freaking lot of money to lose!!!”, with three glorious exclamation points for emphasis which, now that I think about it, is entirely too few to convey the true horrific, cataclysmic impact, and it should more correctly read “a freaking lot of money to lose!!!!!”

And where is a lot of this soon-to-be-worthless CDO stuff going? Well, Junior Mogambo Ranger (JMR) George asks, “Isn’t the Fed taking in some of this so-called AAA CDO crapola as security” against Treasury bonds as a blatant attempt to shore up banks’ balance sheets and other nefarious purposes? I sagely nod my head “yes”, and he asks “at what valuation?” Hahaha!

Laughing too hard to reply, and being too stupid to know even if I weren’t, I extend one Long Bony Mogambo Finger (LBMF) to point to the S&P analysis (above), and then (to win both the prize for Understatement Of The Week (UOTW) and Mogambo Dry Humor Award (MDHA)), he says with a deadpan look on his face, “The Bernanke balance sheet may be an even bigger fiction than we think.”

I laugh, and I realize that all the rest of that economic crap is thus a fiction, too. I tried to keep laughing, but I could not. Fortunately, I tried to eat a cheeseburger, and I could. Fries, too! And then I felt better.

P.S. To get The Daily Reckoning sent directly to your inbox, sign up for our free email newsletter, or if you prefer to use RSS, subscribe to the Daily Reckoning RSS feed.

It’s not a new investment vehicle… It’s an old asset, where the opportunity has never been this good. I crunched the numbers, and I discovered we now have the best opportunity to buy in the 50-year history of this asset.

Right now, my savings account pays me less than 3% interest. At that rate, $10,000 would earn you less than $300 in interest in the course of a year. Then, of course, you also have to factor in income taxes on that $300…

So after taxes, you’ll pocket less than $200 on a $10,000 investment over a full year. It’s abysmal. So what can you safely do? You could tie your money up for a longer period of time… But 10-year Treasury bonds are only paying about 3.7%. And again, after taxes, you’re down to, well, not much. So what can you do?

You should consider buying tax-free municipal bonds.

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Right now, super safe, tax-free municipal bonds pay more interest than taxable treasury bonds. This is crazy.

Under “normal” circumstances, a tax-free investment should pay much less interest than a taxable one. For example, if you can earn taxable interest of 6%, then after income tax, you’d pocket about 4%. So if you could earn tax-free interest elsewhere, your “break even” interest rate would be about 4%. Said another way, interest of 6% taxable and 4% tax-free (at a 33% tax rate for this example) should be thought of as identical.

Interestingly, this is not the case at all today.

Thanks to the credit crunch, hedge funds sold their positions in municipal bonds about two months ago. Legendary fund manager Bill Gross started buying munis in March – by the billions. “When you can get a non-taxable security at the same rate as a basically taxable security, then you’ve got a bargain,” Gross said.

Another legendary value investor – Wilbur Ross – also bought a billion dollars worth.

Despite this buying, the anomaly is still here. Tax-free municipal bonds still pay more interest than taxable Treasuries. At the bottom of the market last month, the spread was the widest in history. Take a look:

As I’ve told readers before, this anomaly always sorts itself out in one of two ways: 1) Either regular government bond prices must crash while municipal bonds stay flat. Or 2) Municipal bond prices must soar. Either way, you’ll do extremely well by holding a portfolio of municipal bonds.

Municipal bonds are safe… The cumulative default rate on municipal bonds from 1970 to 2000 (the only numbers I have) was 0.04%. And that number is for all municipal bonds, not just the highest-rated, AAA ones.

Municipal bond prices fell recently. But the uptrend is back.

You can invest extremely safely in boring municipal bond funds from companies like Vanguard. Or you can significantly increase your tax-free yields by going with a closed-end municipal bond fund. I currently recommend two municipal bond funds to True Wealth subscribers. You can sort through a list of them at www.etfconnect.com.

As I’ve said to True Wealth readers… between the tax-free interest and the capital gains I expect as the anomaly sorts itself out, you should be able to pick up double-digit total returns here over 12 months. Safe, double-digit annual returns on your cash, tax-free, is hard to beat.

Good investing,

Steve

P.S. You can learn more about my top two fund ideas with a subscription to True Wealth. To learn more about joining up, click here. (The tax-free interest you earn this year will easily pay for the subscription!)

Bank of America announced a nearly $2 billion write-down and a 77% decline in year-over-year profits this morning. The names and numbers in this crisis are becoming a blur, aren’t they? For armchair analysts like us, it’s getting a little annoying.

Still, net income for BoA rang in at 23 cents per share — barely half of what the Street expected. The company said it has ramped up “loan loss provisions” nearly sixfold, to about $6 billion.

“These results clearly did not meet our expectations,” Chairman and CEO Kenneth Lewis said in a statement. “The weakness in the economy and prolonged disruptions in the capital markets took their toll on our performance.”

Yeah, that’s right, it had nothing to do with your bad investment decisions…

But never fear, the S&P 500 and Dow each rallied in the face of a multibillion-dollar write-down from Citigroup on Friday . In fact, financials of all toxic investments led the way to nearly 2% gains in both indexes.

On the tech side, the uber-bloated Google surged some 20% on good earnings and took the Nasdaq with it, up 2.6%.

For the week, major indexes were up well over 4%, their most uppity week since February.

Earnings for Dow components American Express, Merck, McDonald’s, AT&T, DuPont, Boeing, 3M and Microsoft all come this week. Also, Yahoo, Apple, Hasbro. Mattel, Pulte Homes and UPS. Could be a doozy. But if the pattern holds, these stocks will all rally unless one or more of them declare bankruptcy… or worse. Losses in the billions are greeted as good news these days.

We’ll let you know if there are any entertaining surprises.

The Shanghai Composite fell another 4% on Friday.

The Chinese index is down about 50% from its October high. All of 2007’s magical gains? Poof! Gone. Sorry.

This is what $2.5 trillion in paper gains looks like… on the way up… and the way down.

“The correction in Chinese stocks was bound to happen,” says our Christopher Hancock , keeping his eyes peeled on the exchange there. “Every asset has an intrinsic value. What someone is willing to pay for an asset is another story. The price-to-earnings ratio has fallen on the Shanghai market to 35 times announced income, from a peak of about 70 times last year. But 35 times current earnings is still expensive.

“A fund manager in Asia I know says the risk stigma surrounding Asian investments still looms large — despite the fact that the world’s most risky assets at the moment are Western banks.

“Our Hong Kong recommendations offer much less risk than many U.S. blue chips. They maintain rock-solid balance sheets. They operate in one of the world’s most capital-friendly environments. Government policies that inhibit growth aren’t much of a concern, if any. They have bank accounts rife with money to spend in Asia… not America. And their diversity ensures that income streams aren’t tied to any one business in particular.

“We like our chances…”

Light sweet crude rose to new highs this morning. Three events helped:

*OPEC minister Chakib Khelil denied rumors that OPEC would soon increase production — assuming they could if they wanted to

*Nigerian rebels sabotaged a Royal Dutch Shell pipeline, reducing its capacity by about half a million barrels a day

*Then, a 150,000-ton Japanese oil tanker was attacked off the coast of Yemen.

Et voila… crude oil pops to $117 a barrel. If you’re keeping score at home, oil is up about 23% year to date.

As luck would have it, gasoline followed suit. AAA says gas hit a dizzying $3.50 this morning nationwide. That’s 63 cents higher than a year ago. You may want to subscribe to Outstanding Investments to help recoup some of the dollars you’re hemorrhaging at the pump.

“The new VeraSun Janesville facility is huge,” reports Kevin Kerr from his “Farm Tour 2008.”

The Maniac Trader in farm country… checking on his crops

This VeraSun facility will pump 110 million gallons of ethanol a year when it’s complete. The beast will devour 39 million bushels (over 2.1 billion pounds) of corn — doing its part to cause food riots in Egypt and across the Middle East.

The price at the pump also hit a record high, of $3.386 a gallon. That was a gain of 1.3% on the day and 10 cents ahead of the month-ago price of $3.285, according to the AAA Daily Fuel Gauge Report.

Supply worries drove the market. In addition to the weekend’s troubling news out of Nigeria was added news that bad weather has forced further export terminal closings in Mexico. Petroleos Mexicanos, the third-largest U.S. supplier of crude, said that 5 terminals are now closed.

Everyone is awaiting the Energy Information Administration’s inventory report, due today. After last week’s surprisingly large decline, analysts are projecting a 1.5 million barrel build this week. Another surprise could have a major effect on prices.

• Takeda Pharmaceutical Co. Ltd said yesterday (Thursday) that it would buy Millennium Pharmaceuticals Inc. (MLNM) for $8.8 billion in the largest-ever overseas acquisition by a Japanese drug maker. The friendly cash offer of $25 per share – a 53% premium the closing Millennium share price on Wednesday – is expected to improve the company’s cancer drug business.

• U.S. retail gas prices extended their record run yesterday (Thursday), the national average price of a gallon of gas rose 1.4 cents overnight to a record $3.357 a gallon, according to AAA and the Oil Price Information Service. Prices have set a string of records in recent weeks, and are 56 cents higher than a year ago.

• The number of workers applying for unemployment benefits fell by a larger-than-expected 53,000 last week the Labor Department said.  Jobless claims fell to 357,000 in the week ended April 5 from an upwardly revised 410,000 in the previous week. Still, the four-week moving average of new claims, rose to 378,250, the highest since October 2005.

• Passenger car sales rose for the sixth straight year in India, where growing demand and tax cuts sent sales up 12% to 1.2 million units from March 31, 2007 to the same day this year. “India’s economic growth story has really benefited the automakers,” R.K. Gupta, who owns shares of carmakers among the $100 million he manages at Credit Capital Asset Management Ltd, told Bloomberg. “Going forward, there are issues. Growth is going to slow in India and the higher interest rates are going to hurt.”

• China’s quarterly trade surplus fell for the first time in more than three years, as exports slowed the nation’s growth. The trade surplus shrank 10.2% to about $41.6 billion in the first quarter compared to the same period a year earlier, Bloomberg reported.

• AMR Corp.’s (AMR) American Airlines announced it canceled 933 flights yesterday (Thursday) to continue inspections on MD-80 aircraft wiring. American has now canceled 2,500 flights since Tuesday, Reuters reported. The carrier estimates 100,000 travelers have been affected by the cancellations.

• Amgen Inc. (AMGN) rose 2.39, a 5.75% increase to close at 43.98 after a ruling from U.S. District Judge William Young that Roche Holding Ltd.’s (OTC: RHHBY) anemia medicine Mircera violates patents owned by Amgen. Roche plans to appeal the ruling. Standard & Poor’s equity analyst Steve Silver said, “any legal delay in Mircera’s launch will continue to be viewed favorably for AMGN, though we expect the shares to remain volatile as the situation continues to unfold.” Silver has a hold ranking on Amgen shares, BusinessWeek reported.

• BJ’s Wholesale Club Inc. (BJ) stock gained on news that same-store sales rose more than analysts expected with a 6% increase in March, MarketWatch reported. Total sales increased 8.5% to $858.1 million for the month. Shares gained $1.43, a 4.05% increase, to close at $36.76.

• Merrill Lynch & Co. (MER) Chief Executive Officer John Thain said the financial firm doesn’t need to raise more capital. “We have plenty of capital going forward and we don’t need to come back into the equity market,” Thain told Japan’s Nikkei news service. He also said he doesn’t have plans to sell or merge the company.

• German bank Bayerische Landesbank reported $6.7 billion in write-down from the subprime collapse, twice the amount of its previous estimate. Bayerische is the second-biggest state bank also said it fired Chief Risk Officer Gerhard Gribkowsky. “(It) still isn’t in the clear, but the risk shield will free up capital,” Dieter Hein, an analyst at Fairesearch GmbH & Co. in Frankfurt, told Bloomberg. “The Bavarians have deep pockets and won’t let the bank collapse.”

• Gasoline prices extended their record run at the pump yesterday (Thursday), as the national average price of a gallon of gas rose 0.2 cent overnight to $3.289 a gallon, according to AAA and the Oil Price Information Service. The Energy Department expects gas prices to peak near $3.50 a gallon later in the spring. Many analysts think prices could rise as high as $3.75 or $4.

• Google Inc. (GOOG) has begun layoffs and other realignments at its DoubleClick unit, according to a media report on Wednesday. About 300 of the online advertising company’s 1,200 employees in the United States were laid off or placed in transitional roles today, Bloomberg reported on its Web site.

• Silver Wheaton Corp. (SLW) said yesterday (Thursday) its proven and probable silver reserves had nearly tripled to 346.4 million ounces as of December. The Canada-based mining company said the growth was driven by the acquisition of 25% of the life of mine silver production from the Penasquito Project in Mexico, and 100% of the life of mine silver production from the Stratoni Mine in Greece.

• Northwest Airlines Corp. (NWA) announced yesterday (Thursday) its March load factor increased to 87% from 85.7% during the same month the year prior, Thomson Financial reported. Traffic at the Eagan, Minn.-based carrier increased 2% to 7.16 billion revenue passenger miles, while capacity grew 0.6% to 8.24 billion available seat miles. The company’s stock was down 19 cents, a decline of 2%, to close at $9.21.

• Valero Energy Corp. (VLO) has completed repairs on its gasoline-making fluid catalytic cracking unit at its 210,000-barrel-per-day Delaware City, Delaware, refinery, Reuters reported. Repairs that were scheduled to be completed in early April at Valero’s 275,000 bpd Aruba refinery are still ongoing, a company spokesman announced yesterday (Thursday).

• The American Bankers Association reported that consumer loans at least 30 days past due increased across all categories of loans tracked, which include auto, credit card and home-equity loans. “It’s an indication of the degree of stress consumers are facing right now,” Nigel Gault, director of U.S. research at Lexington, Massachusetts-based Global Insight Inc., told Bloomberg News. “People overextended themselves, they took out loans they thought weren’t a problem as long as house prices kept rising.”