This title seemed appropriate given the state of affairs in the U.S. Gulf Coast region. Without a doubt, there are many who have lost much. Unfortunately, too many paid the ultimate price and lost it all. All those afflicted - they remain in our prayers.
The economic ramifications of what has been lost on the Gulf Coast are still being assessed. The toll on the insurance industry, according to pundits refining their estimates, may exceed 100 billion alone.
Congress already has allocated $62.3 billion for rescue, recovery and repair from Hurricane Katrina, and analysts expect the total to go far higher. Add in at least $40 billion in private insurance payments plus billions more in state funds and federal flood insurance, and "it's over a $200 billion event by the time you're done with this," said David Wyss, chief economist for Standard & Poor's.
So, we can safely say that insurers are indeed 'losing it'. I don't know about you, but it seems to me that when ever the insurance industry loses anything - they usually 'find it' pretty quickly - more often than not through increased premiums. If I was a betting man, I'd say pretty soon we might all be feeling a little bit lighter in the wallet. While losing weight around the mid rift might be appealing to some - I must say I prefer good ole fashioned exercise! Can you say Ouch!?
While we're on the topic of the economics of 'losing it' - let's not forget all the production/refining capacity lost by the Gulf of Mexico's petroleum industry in the oil intensive Gulf States:
Next Report will be issued on Monday, September 26, 2005 at 1:00 PM CDT. For information concerning the storm click on www.mms.gov
This survey reflects 74 companies' reports as of 11:30 a.m. Central Daily Time [Sept. 25/05].
|Districts||Lake Jackson||Lake Charles||Lafayette||Houma||New Orleans||Total|
|Oil, BOPD Shut-in||77,751||61,071||211,602||335,969||815,470||1,501,863|
|Gas, MMCF/D Shut-In||963.77||1,172.07||1,164.32||1,337.53||3,409.13||8,046.82|
These statistics are reflective of evacuations and shut-in production from Hurricanes Katrina (remaining) and Rita
Getting one's head around the severity of these losses outlined above might be best summed up by the following:
- These evacuations are equivalent to 81.32% of 819 manned platforms and 68.66% of 134 rigs currently operating in the Gulf of Mexico (GOM).
- Today's shut-in oil production is 1,501,863 BOPD. This shut-in oil production is equivalent to 100% of the daily oil production in the GOM, which is currently approximately 1.5 million BOPD.
- Today's shut-in gas production is 8.047 BCFPD. This shut-in gas production is equivalent to 80.47% of the daily gas production in the GOM, which is currently approximately 10 BCFPD.
- The cumulative shut-in oil production for the period 8/26/05-9/25/05 is 33,283,422 bbls, which is equivalent to 6.079 % of the yearly production of oil in the GOM (approximately 547.5 million barrels).
- The cumulative shut-in gas production 8/26/05-9/25/05 is 156.037 BCF, which is equivalent to 4.275% of the yearly production of gas in the GOM (approximately 3.65 TCF).
Where I come from, all of the above spells s - h - o - r - t - a - g - e - s folks. Yup, energy shortages just as we are getting set for heating season - despite the blather you hear on T.V. or read in the newspapers - that's a sure fire recipe for higher prices and a lighter wallet folks!
Along the lines of getting 'caught short' [or perhaps with your pants down?] - which most people would agree implies a loss of some kind - comes this 2.5 billion dollar tidbit that flew in under the radar whilst the bright lights of the main stream media were warming up for the events on the U.S. Gulf Coast. On the same day that Katrina struck, 8 former KPMG executives were indicted - with the firm agreeing to pay 456 million in fines for fraudulently setting up 'tax shelters' to help their clients - bilking the IRS out of said 2.5 billion in revenue. At least this tale of loss has a happy ending, with KPMG's directors worried that the firm itself might have been criminally indicted [meaning breakup a la Arthur Andersen] - Attorney General Alberto Gonzales stopped short of that action citing,
"The conviction of an organization can affect ordinary workers,"
"Justice must serve offenders and victims as well as the economy and the general public."
Oh la-la. Isn't it great [or a sign of the times, perhaps?] when we live in a world where one would even consider referring to 456 million dollar fines and 2.5 billion missing from the IRS/Treasury - as tidbits?
As if all this isn't enough - when it comes to losing it - [hope you spotted the French lead in] let's all take a moment to reflect on newly minted thoughts of Sir Alan of Greenspan at high level bilateral talks with G7 finance ministers. In talks with French Finance Minister, Thierry Breton, Sir Alan is alleged to have said,
...the United States has lost control of its budget deficit..."We have lost control,' that was his expression, Breton told reporters after a bilateral meeting with Greenspan.
"The United States has lost control of their budget at a time when racking up deficits has been authorized without any control [from Congress]," Breton said.
In keeping with the losing it theme - it's no wonder a Treasury official became clearly irritated when questioned further on this matter - stating,
"Things can get lost in translation."
I wonder if Sir Alan has ever stopped to consider that perhaps Congress lost their way around about the same time that he lost his way - with irrationally exuberant 1% interest rates - fostering delirious credit creation - that, among other things, stoked the biggest real estate bubble this planet has ever seen?
Thought I would point out a few of these inconspicuous items that perhaps got lost in the translation, errr shuffle - but let me take rest here before I lose it too.