Economy – The Third Horseman

LONDON (AP) — Oil prices fell to $95 a barrel on Monday after Hurricane Ike inflicted minimal damage to oil installations on the Texas coast. Federal officials said Sunday that the storm destroyed at least 10 oil and gas platforms and damaged pipelines in the Gulf of Mexico — only a small amount of the 3,800 production platforms in the Gulf. Three years ago, back-to-back hurricanes knocked out more than 100 platforms. Power outages were slowing efforts to restart the refineries. Valero Energy said only one of its closed refineries had power, and spokesman Bill Day said he couldn't estimated how long it would take to resume production. However, gasoline prices rose nearly 5 cents a gallon Monday, bringing the total increase in the three days since Hurricane Ike slammed into Texas to almost 17 cents, according to a nationwide survey.

Investors must absorb the bankruptcy filing at Lehman Brothers and Merrill Lynch's forced sale to Bank of America for $50 billion in stock. And perhaps most ominously, American International Group is reportedly asking the Federal Reserve for emergency funding. The world's largest insurance company plans to announce a major restructuring Monday. The swift developments are the biggest yet in the 14-month-old credit crises that stems from now toxic subprime mortgage debt. U.S. stocks fell moderately at the opening bell Monday, then got worse, after the stunning reshaping of the Wall Street landscape. Global stocks fared much worse as a feverish sell-off in Europe and Asia turned markets sharply lower.

WASHINGTON — The nation's industrial output plunged in August by nearly four times the amount that had been expected. It's the worst performance since Hurricane Katrina devastated the Gulf Coast in 2005. The Federal Reserve reported Monday that industrial output dropped 1.1% last month, far worse than the 0.3% decline economists had been expecting. The weakness was led by an 11.9% drop in production of motor vehicles and parts, reflecting the hard times facing the U.S. auto industry. The U.S. manufacturing sector has been battered by a prolonged housing slump and feeble demand for autos, due to the weak economy and the big jump in gasoline prices this year.