Harvey Heading Back to Gulf After Dumping 40 Inches in Texas; Experts Fear Second Landfall Near Galveston on Tuesday

Valero is tweeting that they might have an issue with their Corpus Christi and Three Rivers refineries.

1/5 Valero Corpus Christi & Three Rivers refineries are conducting a thorough assessment of refinery status & potential impacts from #Harvey

— Valero Energy (@ValeroEnergy) August 26, 2017

Their other gulf coast refineries appear to be fine.

2/5 Our other Gulf Coast refineries continue to operate.

— Valero Energy (@ValeroEnergy) August 26, 2017

ZH has the full rundown on the storm, its impact, and how the state of Texas is entirely fucked.

Harvey made landfall just before midnight on Friday between Port Aransas and Port O’Connor as a monstrous Category 4 storm – the first of that level to strike the U.S. since Charley in 2004, and the strongest storm in more than 50 years to hit Texas.

By daybreak it had been downgraded to a Category 1 storm from a Category 4, according to the National Weather Service. But the storm was expected to settle in over South Texas for several days. As much as 30 inches of rain is forecast to fall by next Wednesday, with some areas getting as much as 40 inches.

The fear now is Harvey heading back out into the water to rejuvenate, regain its virile powers, and then smash into Texas again on Tuesday.

Fox is reporting the storm may, in fact, make a second landfall on Tuesday, near Galveston.

Hurricane tracker, Mark Sudduth, assesses the damage.

Damage video along 35 near Tivoli TX pic.twitter.com/BVMVzEGyOq

— Mark Sudduth (@hurricanetrack) August 26, 2017

This is probably the worst storm since Sandy, with damages well into the billions.

Adding a bit of levity to the story is a woman literally handing a 6 pack of beers to a Fox reporter covering the storm, adding new meaning to the term ‘Hold My Beer’.

One thing is for certain, Harvey isn’t done yet and should linger for days, with major flooding forecasted across southern Texas.

Charlottesville’s DA, Warner D. “Dave” Chapman, is making an example of Cantwell, denying the ‘crying nazi’ bail for partaking in violence against members of ANTIFA in the Charlottesville fiasco.

The Albermarle County General District said Cantwell could reapply for a bond hearing after his next scheduled court day on October 12th.

He’s facing two charges of ‘illegal use of tear gas’ and one charge of ‘malicious bodily injury’ by way of caustic substance.

Here’s a nice video showing a seemingly immature and doltish Cantwell before and after Charlottesville.

Denying bail for a pepper spray attack seems beyond absurd. However, anyone with insight into the legal system in this country knows that justice isn’t blind, but vindictive and usually done with malice.

Let this be a warning to future nazis out there.

Today’s reason is due to Draghi’s comments regarding a ‘global recovery’ being firmly underway. Truth be told, ever since Trump complained about dollar strength, the greenback has been careening lower.

“The global recovery is firming up,” Draghi said, according to prepared remarks on the European Central Bank website. He noted that in Europe and Japan, “the consolidation of the recovery is at an earlier stage” versus that of the U.S.

The euro is higher by more than 1% vs the dollar today — the highest level since 2015.

Ultimately, Draghi said the ECB’s QE was the prime reason for the recovery, suggesting that his actions were both justified and necessary, which got traders into the QE for life mode.

“Without stronger potential growth, the cyclical recovery we are now seeing globally will ultimately converge downwards to those slower growth rates,” Draghi said. “Slower growth will in turn make it harder to work through the debt and demographic challenges facing many advanced economies.”

Heading into the speech, people thought the ECB might follow the Fed’s lead and begin tightening. However, this speech made by Draghi has people thinking otherwise.

The strength in the euro is a positive for US exporters — therefore a boon for US equities.

Here are some changed to the NHC advisory:

WATCHES AND WARNINGS
——————–

The Hurricane Watch south of Port Mansfield Texas to the Mouth of
the Rio Grande has been discontinued.

SUMMARY OF WATCHES AND WARNINGS IN EFFECT:

A Storm Surge Warning is in effect for…
* Port Mansfield to High Island Texas

A Storm Surge Watch is in effect for…
* South of Port Mansfield Texas to the Mouth of the Rio Grande

A Hurricane Warning is in effect for…
* Port Mansfield to Sargent Texas

A Tropical Storm Warning is in effect for…
* North of Sargent to High Island Texas
* South of Port Mansfield Texas to the Mouth of the Rio Grande

A Tropical Storm Watch is in effect for…
* South of the Mouth of the Rio Grande to Boca de Catan Mexico

A Storm Surge Warning means there is a danger of life-threatening
inundation from rising water moving inland from the coastline in the
indicated locations. For a depiction of areas at risk, please see
the National Weather Service Storm Surge Watch/Warning Graphic,
available at hurricanes.gov. This is a life-threatening situation.
Persons located within these areas should take all necessary actions
to protect life and property from rising water and the potential for
other dangerous conditions. Promptly follow evacuation and other
instructions from local officials.

A Hurricane Warning means that hurricane conditions are expected
somewhere within the warning area, in this case within the next 12
to 24 hours. Preparations to protect life and property should be
rushed to completion.

A Storm Surge Watch means there is a possibility of life-
threatening inundation from rising water moving inland from the
coastline in the indicated locations.

Interests in southwestern Louisiana should continue to monitor the
progress of this system.

For storm information specific to your area in the United
States, including possible inland watches and warnings, please
monitor products issued by your local National Weather Service
forecast office. For storm information specific to your area outside
the United States, please monitor products issued by your national
meteorological service.

Hurricane Harvey is a category 2 storm, 110 mph winds. Here's the latest. #rgv #rgvweather #harvey pic.twitter.com/Pp4tfHHFCx

— Robert Bettes (@BettesWeather23) August 25, 2017

Markets are enjoying the specter of Texas being destroyed. They’ve been getting away with so much, for so long, people are seemingly immune to their plight — living fat off the hog with all of that oil money. With upwards of 30% of the nations refineries located in the path of Harvey, investors have even bidding up refinery stocks like HFC, VLO and CVI.

In addition to refineries, traders are sopping up construction stocks today, namely GV, PRIM, LAYN, STRL, GVA and GLDD.

Auto parts stores are ripping higher too. I suppose with all the flooding and widespread mayhem coming to Texas, they will be busy making repairs soon. Tankers, truckers, airlines, they’re all gapping higher. Markets act utterly retarded during major storms — most of which is nonsensical. I used to get caught up in the hype of these things and I made a fortune trading Katrina. But, more or less, these storms are duds. Sure, they do damage and they stimulate the economy — but it’s always short lived.

In other news, Chinese Burrito stocks are getting flushed.

For the past month, the systematic greatness of Exodus had been underperforming the S&P, for a sundry of reasons. Previous to the recent spate of underperformance, it had humiliated the SPY for 9 out of the previous 10 weeks.

Thanks to a resumption in risk appetite this week, we’ve resumed the pattern of absolutely poleaxing the SPY again — besting it by 2x — clocking in at 1.38%.

Because markets performed well, both TLT and GLD were reduced and we swapped out of the $10-50b quintile of stocks for $5-10b — because they performed best this week.

Bear in mind, I set the rules in the beginning and do not have any say from thereinafter. It’s important to note that this investment program has afforded me with a great many luxuries and an improved quality of life.

I’ve taken time to now upgrade Exodus in many ways, most of which users do not see or know. All fundamental data is now updated each and every Wednesday, through super reliable data streams, and of course the quotes are now real time.

The quant model I had created for this program is designed to chase alpha and find the very best stocks to invest in each and every week. Thus far, and without equivocation, I deem this experiment a wild success.

Do what you like with this one. I just got finished rewatching World War Z and can’t help but to imagine this woman is infected with the zombie virus and will soon be running around NYC biting people in the face.

Say you were an old man, or risk averse. Instead of gambling in the tech space, filled with faggots and caitiffs, you bought an old school electric utility, yielding 4.5%, trading at a discount to the market 5 years ago. Considering the run the market has been on, I’d venture off the believe, if afforded the opportunity to gander, that the SPY would’ve crushed the old man — discarded his wheeled chair, and smoked his pipe for him.

Contrary to what you might otherwise believe, the exact opposite is true.

Mumra is up in this bitch. pic.twitter.com/677ORuqOxe

— The_Real_Fly (@The_Real_Fly) August 25, 2017

Anyway you splice it, the utilities have crushed the SPY, going back at least 5 years.

The biggest in the electric space is DUK, sporting a $60 billion market cap — yielding 4.11% — is up 14.2% for the year, excluding dividends.

Amongst diversified utilities, PCG is the biggest — yielding 3.06% — up 16.6% for the year.

If stock picking isn’t your thing, there are ETF alternatives.

XLU yields 3.1% and is up 15% this year. Another interesting play is JXI, which provides global exposure in the utility sector, providing investors an opportunity to invest parasitically on a worldwide scale.

Frankly, there are a half dozen ways I can attempt to describe the reason for the outperformance. But I think the best reason is we’re in the midst of an investable renaissance where everything works. The avoidable sectors are easily telegraphed and the winners continue to win, in a staid and mechanized fashion.

One day we’ll long for these days, a period in time when even idiots were able to invest their way out of the Third Estate and into the canaille. I, however, endeavor to preside over the destruction of capital markets — positioning myself in a way to act in a manner that is wholly and completely vampirish. Until that day beckons, Exodus will keep me invested, as it deems fit, participating in this ‘tape’, broadly diversified and systematically supreme.

I know it’s bit early in the season for Deacons of Death to come barreling down upon this great nation. But Harvey has a mind of its own — and he’s gunning for Texas — the land of the Mexican snowflake and 10 gallon hatted faggot.

Here's a look a Hurricane Harvey's potential impact on oil prices https://t.co/cs1LcQJpQJ pic.twitter.com/DyA68gxEFJ

— Bloomberg (@business) August 24, 2017

Inside Texas is a lot of tea, of the black tarry varietal. Most of this countries oil refining capacity resides there. Incidentally and coincidentally, a great big fucking hurricane is heading right for those refineries, which is helping out refinery stocks a great deal — as the crack spreads between gas and WTI blow out.

One third of US refining capacity is in the direct path of Harvey. Here is the map.

If Harvey upgrades to cat 3 status, it would become the first storm since 2008 to touch down in Texas. The culprit for the machinations of Harvey are likely due to DARPA meddling with water temperatures in the Gulf.

According to the National Hurricane Center, Harvey will lay waste to Texas, with winds sustaining 115mph and expected to dump a deluge of rain — anywhere form 12-20 inches.

“The main danger with this storm does not seem to be wind, it is the amount of rain and it looks set to stall over the Texas coast,” said Jacob Meisel, Bespoke Weather Services’ chief weather analyst. “This is something we’re watching even for onshore [drilling].”

Subsequently, NYMEX gas futures traded up 6 cents to $1.59 — the highest level since April. With WTI trading down 2.4%, this is pure profit for the soon to be embattled refiners.

“If it’s a Category 3, and it hits a refining center, you literally could have a gasoline price spike that is like 27 cents” a gallon, said “It’s a temporary event, but you could have a temporary price shock for portions of the United States that are fed by the Gulf Coast.”

Weather nerd Meisel warns:

“It has a straight shot at the coast with nothing but fuel to strengthen,” said Meisel. “The conditions are perfect for rapid intensification because of low wind shear and warmer than average water temperatures.”

“The amount of rain some of our weather models are printing out for this storm are totals that are almost unbelievable,” he said. “There’s definitely potential for more than 24 inches around the Houston area.”

The industry is preparing, as would be expected. Anadarko has pulled workers from their GOM platforms, as well as Magellan Midstream closing out operations at its Corpus Christi terminal.

According to Lipow, a cat 3 storm would  do enough damage to the installations in Texas and the Louisiana shore, it would take 2-3 weeks to get back to normal.

“There is more likely to be evacuations, widespread power outages, wind damage, flooding and difficulty getting workers back to the facilities,” he said.

“It could still be disruptive. You can’t have this magnitude of potential shut-ins without seeing prices go up,” said John Kilduff, energy analyst with Again Capital. “This could be a hiccup. It will be temporary, but it could be a hell of a spike.”

Meisel continues his wish casting:

“You’ll get really intense bands of rainfall that are really narrow. What you can get are pretty crazy totals of rainfall differences across a very small area. That’s where the main uncertainty lies right now.”

“We’re pretty convinced that the storm will make landfall in southern or coastal Texas,” he said. “…The question is where do those bands show up.”

Obviously, we’d like all people to escape the wrath of Harvey. We are, however, rooting for the complete and total destruction of the refining industry, located at and around the GOM — taking America back to the days of horse and buggy.

According to Dallas Fed’s Kaplan, America has an over abundance of jobs and needs to attract wanton amount of migrants in order to fill the insatiable demand for cheap labor, aka ‘skills gap.’

While on one hand, Kaplan ceded to the notion that globalization was a primary reason for price deflation and stagnant growth, he also blamed America’s aging demographics for lackluster growth.

“One of the big challenges we face in the United States and one of the reasons why GDP growth has been so sluggish is our population is aging and our workforce growth has been slowing,” he said in an interview from the Fed’s annual conference in Jackson Hole, Wyoming.

“There’s a big skills gap in this country. There’s hundreds of thousands if not millions of jobs that employers can’t fill, and everywhere I go I hear about this,” he said. “We need to grow the workforce if we’re going to grow the GDP.”

While much of Europe and Japan are beset by aging populations that threaten the very fabric of the burgeoning credit card industry, according to the most recent demographic projections, America is just fine. As a matter of fact, just 15% of our population is over 65 years old and our population should steadily increase for the next 50 years.

Taking a passive-agressive shot at President Trump’s immigration ideas, Kaplan reminds us that his parents were immigrants. Ergo, using that logic, we should therefore embrace anyone who’d like to enter the country and take out a credit card loan, or perhaps one designated for students. He’s also a big fan of NAFTA.

“Immigrants and their children have made up over half the workforce growth in this country over the last 20 years. They’re likely to need to make up more than half in the next 20,” Kaplan said. “And one of the key distinctive competencies in the United States is our ability to take people, including my grandparents, assimilate them and make them productive members of society. … I would be very loathe to see us lose that distinctive competence.”

Kaplan also voiced support for international trade agreements, though he agreed with the administration’s position that NAFTA should be renegotiated.

“Those trade relationships are essential to U.S. competitiveness and growing U.S. jobs,” he said.

It’s important to remember that members of the Federal Reserve and the banking industry do not belong to any nation. They’re merely cogs in a very big wheel, crunching numbers and wholly interested in seeing banks do well. The social ramifications of too much immigration will never resonate with people like Kaplan, nor do they understand, or care, about who fills construction jobs or other forms of manual labor, as long as America is able to do so in the cheapest way possible. Free trade agreements will always be supported by the Fed, because it enables US corporations to hire very cheap labor in Mexico. That’s all that really matters, to men like Kaplan. Your neighborhood and your job is an unimportant statistic and could be replaced by ‘innovation’ or free trade agreements — because companies like Apple need to hoard MOAR cash.

Just a few days ago, the mall looked dead. Today, there is vibrancy and purpose in the once lauded destination. One of today’s stalwart winners is BURL, higher by 4.3%. Out of all the stores in America, I’d rate this one my least favorite. Inside these denizens of slobbery is an aura of depression that cannot be shaken after weeks of heavy drinking. Nevertheless, America is broke as fuck, so discount retailers like BURL are thriving.

Both GES and ANF have exploded to the upside as well. While the stocks are both crazily higher today, understand that this is merely a case of two beaten up retailers exceeding lowered earnings estimates. But the halo effect is real, with gains across the industry.

By the way, JCP has a 3 handle on it.

Quick question for you trading fools.

Will this be the last Christmas for both JCP and SHLD? If so, what will the malls do with all of that empty space?