Crude Drops Despite Hurricane
Oil traders ignored the fact that Hurricane Isaac, now a Category 1 storm, stepped ashore in Louisiana. WTI crude actually dipped nearly $1 to $95.55. Despite the billions of dollars of damage the rain and wind from Isaac will bring, there is no evidence that rigs in the Gulf of Mexico or refineries along its shores will be off-line for more than a day or two. The storm did not turn out to be the menace - to the ability to drill oil, make it into gas or ship it to regions of the United States where demand is strong - it might have been if it had been much more powerful. The lack of effect on oil prices also will hurt the chance that a request by G7 finance ministers for oil-producing nations to increase their activity will be taken seriously. The supply of oil is no worse than it was a week ago.
ECB President Makes More Promises
President Mario Draghi made another vague comment about how the European Central Bank can help relieve the financial tension in Europe:
Yet it should be understood that fulfilling our mandate sometimes requires us to go beyond standard monetary policy tools. When markets are fragmented or influenced by irrational fears, our monetary policy signals do not reach citizens evenly across the euro area. We have to fix such blockages to ensure a single monetary policy and therefore price stability for all euro area citizens. This may at times require exceptional measures. But this is our responsibility as the central bank of the euro area as a whole.
The comments are like those he made several weeks ago when he said the bank would do all that was necessary to save the euro. Since then, the ECB has done nothing of the kind.
The Torch Is Passed at Fidelity
Abigail Johnson, the daughter of Fidelity Investments CEO Edward C. Johnson III, has been promoted to run almost all of the money management behemoth. The company was founded by her grandfather and she owns a large portion of the stock in the firm. The announcement has been expected for some time, as the power to oversee the company passes again from one generation to another. Abigail may find her job more challenging that her father's, at least short term. Individual investors, the financial holdings of whom are a backbone of Fidelity sales, have drawn away from most equity investments to those that are safer. Even the mutual fund business has been hurt by this. Much of what Americans earn now goes to pay down debt they loaded on in the decade of the 2000s. In addition, Reuters points out that Fidelity returns have been less than spectacular, as "Fidelity customers have withdrawn more money than they have added over the past few years."
Douglas A. McIntyre
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