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Several major U.S. refiners said early checks on Monday showed their facilities were unharmed by Hurricane Gustav, but at least two others were said to be considering dipping into the U.S. Strategic Petroleum Reserve to keep operations going after the storm shut down key waterways.

Gustav weakened to Category 2 before roaring ashore near Port Fourchon, Louisiana, on Monday, potentially sparing the kind of damage that the region’s platforms, rigs and refineries suffered at the hands of more powerful Katrina three years ago.

Offshore operators said remote sensors indicated that major platforms remained where they were moored before the storm, although Shell, the region’s largest producer, said it may take three to five days to restore production.

Energy companies had to shut in all 1.3 million barrels of U.S. offshore oil production — a quarter of U.S. output — as well as 7.06 billion cubic feet per day in natural gas supply, or nearly all of the 15 percent of national production the Gulf provides, as Gustav ploughed through the region.

By late Monday night, Gustav had subsided to a tropical storm, with winds of 60 miles per hour (96.5 kph), as it moved inland across Louisiana.

U.S fast cash advance loan. crude stood at $111.07 a barrel by 12:15 a.m. EDT, about 33 cents below trading levels late on Monday, when prices slumped $4 on easing concerns about Gustav, which had been called the biggest threat to the sector since 2005’s devastation.

Thirteen refineries with a combined capacity of 2.67 million barrels per day (bpd) — 15 percent of the country’s total — were shut by late Monday, but early signs suggested many had been spared.

Valero Energy Corp said an initial check of its 250,000 barrels per day (bpd) refinery at St Charles, Louisiana, refinery showed no significant structural damage from Gustav, and that the plant had electrical power. 

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Record gas and higher food prices drove inflation to the biggest annual jump since 1991 and fanned fears about growing pressures on consumers.

The Labor Department reading on Wednesday is another sign, along with mounting job losses and declining home prices, of the economic pain suffered by Americans as prices outstrip increases in paychecks.

The latest reading came as Federal Reserve Chairman Ben Bernanke, in testimony on Capitol Hill, was warning that inflation could pose a major drag on the economy for the rest of this year.

Retail prices were up 5% annually in June, the biggest 12-month change since May 1991 - an annual figure that was skewed by the surge in gasoline prices related to the first Gulf War.

A separate Labor Department report showed the average hourly wage up only 3.4% over the same 12-month period, meaning the typical American is having trouble keeping up with the price increases.

"The government report confirms what every consumer in America has known for months now: inflation is soaring and it’s having an adverse impact on the economy," said Rich Yamarone, director of economic research at Argus Research.

On a monthly basis, the Consumer Price Index was up 1.1% in June, after a 0.6% rise in May. Economists surveyed by Briefing.com had been looking for only a 0.7% rise.

Energy prices were up 6.6% in the month, led by a 10.1% jump in gas prices. That left gasoline prices up nearly a third from a year earlier.

But there was also pain at the grocery store for many Americans, as food prices jumped 0.8% compared to May, led by a 2.8% jump in fruits and vegetables, and a 1.6% rise in dairy and related products.

The rise left grocery prices up 6.1% compared to a year ago, with cereals and bakery products posting one of the biggest year-over-year gains, up 10.4%.

Yamarone said that he believes inflation could remain at elevated levels for the next six to nine months, even if oil prices retreat from current levels.

"I wouldn’t be surprised if we creep up to 6, 7 even 8%," he said.

The so-called core CPI, which excludes volatile food and energy prices, rose 0.3%, after a 0.2% rise guaranteed cash advance loan. Economists had been looking for another 0.2% rise. The higher than expected core reading was also troubling because that could tie the Fed’s hands in its effort to help the struggling economy.

The 12-month rise in core CPI is now up 2.4%, up from a 2.3% rise in that reading in May.

Bernanke warned lawmakers on Tuesday and again on Wednesday that inflation poses a risk for the economy.

"Rapid increases in the prices of energy and other commodities … have sapped household purchasing power even as they have boosted inflation," he said in testimony.

He also warned that spending by consumer spending, which provides nearly three-quarters of the nation’s economic activity, "seems likely to be restrained over coming quarters" and that price increases could also make businesses cautious about their own spending plans.

One measure of the economic stress on households is the so-called economic misery index - calculated by adding the 12-month inflation rate and the unemployment rate. With the jump in inflation to 5% in June from 4.2% in May, the misery index is now at 10.5, the first time it has hit double digits since 1993.

While the Federal Reserve responded to economic pain earlier this year by approving deep interest rate cuts, it’s not clear the central bank will be providing any more help to help households in the foreseeable future.

The Fed generally wants to see core inflation measures up between 1% and 2%, so the new core reading was well outside the so-called comfort zone.

Bernanke said in his congressional testimony that despite the weak outlook for economic growth, the Fed could not ignore signs of rising inflation. The Fed’s strongest measure to spur economic growth, interest rate cuts, are seen as adding to inflation pressure. 

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New Zealand consumer confidence has fallen to a record low as the economy faces a recession and unemployment rises, according to a survey.

Forty nine percent of 1,119 people surveyed in the two weeks ended June 29 said it was a bad time to a major household item buy, up from 45 percent in a poll completed two weeks earlier, research group Roy Morgan said in a statement on its Web site. Thirty five percent said it was a good time to buy.

New Zealand's economy contracted in the three months ended March 31 and eight of 13 economists surveyed by Bloomberg News expect a contraction in the second quarter, putting the economy in its first recession since 1998. Record-high interest rates are crimping confidence and spending, say retailers.

“The deterioration in confidence bodes ill for retail spending,'' said Shamubeel Eaqub, economist at Goldman Sachs JBWere Ltd. in Auckland. “Current confidence levels match the lows seen in the early 1990s' recession.''

Sixty four percent of consumers expect the economy will deteriorate over the next year and 58 percent said they are financially worse off than a year earlier, Roy Morgan said. A record-high 33 percent of people expect to be worse off in a year instant payday loan.

Roy Morgan's overall confidence rating fell to 82 from 87.6 in mid-June.

Profit Outlook

Employment fell by the most in 19 years in the three months ended March 31, while the jobless rate increases to 3.6 percent from 3.4 percent. The central bank expects the jobless rate will rise to 4.6 percent by the first quarter next year.

Warehouse Group Ltd., New Zealand's biggest discount retailer, last month cut its profit forecast 10 percent, citing a slump in spending as food and fuel costs soar.

“I don't think there's a household in the country that's not under pressure financially from the burden of these higher food and petrol costs,'' Chief Executive Officer Ian Morrice said in a June 27 interview.

Reserve Bank Governor Alan Bollard said last month that slow growth means it is “likely'' he will cut the official cash rate from a record 8.25 percent this year. Twelve of 13 economists surveyed by Bloomberg News predict a rate reduction by September.

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Manhattan apartment sales dropped the most for a second quarter since 1998 and unsold inventory approached an eight-year record, two signs prices may be poised to drop in the nation's most expensive urban housing market.

Sales fell 22 percent from a year earlier and inventory rose 31 percent to 6,869 units, New York-based real estate appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today. The median price of a co-operative or condominium apartment increased almost 15 percent to a record $1.03 million, lifted by new developments.

Transactions are declining as financial firms have announced plans to cut almost 90,000 jobs after taking more than $400 billion in mortgage-related losses and writedowns. Those companies may lose as many as 175,000 employees by next June, according to executive recruiters such as New York's Gerson Group, casting a pall on a property market driven by Wall Street compensation.

“People are asking: `Am I going to have a job?''' said Pamela Liebman, chief executive officer of the Corcoran Group, a Manhattan-based real estate brokerage that also issued a price report today. “There is a lot of uncertainty and uncertainty puts people on the sidelines.''

The U.S. housing slump started in mid-2005 when sales of new and existing homes began to drop, bringing a five-year boom to a close. Prices for existing homes started falling last July and finished the year below 2006 levels, the first annual decline since the Great Depression, according to the National Association of Realtors in Chicago.

Longer Selling Time

While prices in New York City are holding up for now, buyers remain wary and apartments are taking longer to sell. The average time spent on the market rose 15 percent to 135 days, according to Miller Samuel. At the end of May, there were 7,320 housing units for sale in Manhattan, the second-highest number for the month since Miller began keeping records in 2001.

“There is sort of the anticipation, the expectation that the other shoe is going to drop,'' Miller Samuel President Jonathan Miller said. “I think for this quarter, it hasn't.''

All four reports issued today show price increases. Corcoran, owned by Apollo Management LP, and the New York-based brokers Brown Harris Stevens and Halstead Property LLC, owned by Terra Holdings LLC, produced reports in addition to Miller's. The figures vary in part because the brokers include some of their own sales that have yet to show up in the city's public records database.

Manhattan apartment prices rose 3.6 percent in 2007, according to Miller Samuel.

Luxury Sales

About a third of second-quarter closings were new condominiums, some of which went into contract before turmoil hit the credit markets last August and September, said Gregory Heym, chief economist for Terra Holdings us fast cash.

Many of the units closing now are multimillion dollar condominiums at the recently converted Plaza and at architect Robert A.M. Stern's 15 Central Park West.

Those properties helped drive the median condominium price up almost 22 percent to $1.3 million in the three months ended in June and contributed more than three percentage points to the city's overall increase in median price, according to Miller. Without them, the median rose 11.2 percent, Miller said.

Goldman Sachs Group Inc. Chairman Lloyd Blankfein, former Citigroup Inc. Chairman Sanford Weill and rock star Sting have bought units at 15 Central Park West, where the apartments have heated bathroom floors, Vermont marble countertops and six-burner Thermador ranges.

Future Bonuses

Other buyers there include Nascar Inc. Chairman Brian France, who paid $10.7 million, and Mitchell Julis, co-founder of the asset management firm Canyon Partners LLC, who paid $10.2 million, according to city records.

Once the remaining units in Stern's building and the Plaza close, average prices may drop as much as $200,000, Heym said.

“I don't expect to see any dramatic price change before the end of the year,'' Heym said. “The real telling thing will be Wall Street bonuses and how the city looks going into 2009.''

Prices of two-bedroom apartments rose 18 percent to $1.65 million, the biggest increase for any size category. Studios rose almost 12 percent to $480,000, one bedrooms increased 11 percent to $778,961, three bedrooms by 3 percent to $3.7 million and apartments with four or more bedrooms climbed 11 percent to a median of $7.35 million, Miller's data show.

`Kiss the Ground'

The top end of the residential market remained the strongest as wealthy buyers bought condominiums with amenities such as gym and spa services, hotel-style room service and swimming pools.

The median price of a luxury apartment rose almost 38 percent to $4.95 million in the Miller Samuel survey and 35 percent to $4.88 million, according to Corcoran. Both companies consider apartments of more than $3.1 million as luxury.

“Real estate markets go up and down, and when it comes to New York City, it's an island. There's not a lot of land, and it'll survive,'' said Dottie Herman, chief executive officer of Prudential Douglas Elliman. “I think we need to kiss the ground because we live in New York.''

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ST. PETERSBURG–Russian President Dmitry Medvedev said "economic egoism" has led to what may be the worst economic contraction since the depression of the 1930s, and placed some of the blame on the United States.

The Russian leader said no single country, even the U.S., can reverse the global economic decline alone, and claimed a role for Russia in finding a solution.

"An underestimation of risks by the largest financial companies together with the aggressive financial policy of the world’s largest economy led not only to corporate losses. Unfortunately, the majority of people on the planet became poorer," Medvedev said.

"For global financial markets, 2007 was one of the hardest years in recent decades and, if experts are to be believed, the most complicated since the Great Depression of the 1930s," Medvedev said, speaking at the opening of the St. Petersburg International Economic Forum.

The Russian president said the global institutions responsible for financial regulation had "no levers" to counteract "economic nationalism," when countries’ "pragmatic interests" give way to "political concerns."

"The modern world is already globalized. And in such conditions, mistakes in the policies of individual countries, not to mention national egoism, immediately affect the situation in the entire global economy," he said.

"The disparity between the formal role of the U.S. in the world economic system and its real potential is one of the main reasons for the current crisis," Medvedev said. "As strong as the U.S. market is, and as reliable as the U.S. financial system is, they aren’t capable of replacing global goods and financial markets."

U.S. Commerce Secretary Carlos Gutierrez, attending the forum, said he didn’t think Medvedev had singled out the U.S. for criticism.

"It’s a very good point," Gutierrez told reporters. "I brought up an example of economic egoism when I talked about the Doha round of negotiations for the WTO," he said, referring to talks on the World Trade Organization. "We could help food prices to come down. We could help 500 million people to get out of poverty. Every country has to make some sacrifices."

Alexander Medvedev, deputy CEO of Russia’s energy giant OAO Gazprom, told reporters at the St low rates payday advance. Petersburg economic forum that his company will hold talks "soon" with TransCanada Corp. on a planned project from Alaska to the continental U.S., as Russia’s natural-gas exporter strives to become a global energy company.

Gazprom, which wants to enter the North American market with shipments of liquefied natural gas, agreed to supply the proposed Rabaska terminal in Quebec last month. The Russian company has already proposed joining BP PLC and ConocoPhillips’ Alaskan pipeline project that rivals TransCanada’s.

BP, ConocoPhillips and other producers yesterday bid a record $1.21 billion (Canadian) to obtain rights to drill for oil and natural gas in Canada’s arctic as record crude prices encourage exploration in remote areas.

Winning bidders paid an "unprecedented" amount for concessions in the Beaufort Sea, Mackenzie Delta and the Central Mackenzie Valley in the Northwest Territories, the Canadian government said.

In other developments on the oil front yesterday:

• Oil’s record gain of more than $10 (U.S.) a barrel Friday will likely slow global growth, the International Monetary Fund’s First Deputy Managing Director John Lipsky said. "This will add to the downward pressure on global growth," Lipsky said at the economic forum in St. Petersburg. "If you compare it to where we were back in September when we made our forecast for 2008, this would take about a full percentage point off." Crude oil rose $10.75, or 8.4 per cent, to $138.54 (U.S.) a barrel in New York.
• The record jump in crude-oil prices may have been an overreaction, Goldman Sachs Group Inc. chief economist Jim O’Neill said. "Oil is the one thing I’m really not sure about," he said in St. Petersburg.
• Leading energy-consuming countries urged oil producers to boost their output to counter soaring prices threatening the world economy, while they pledged to develop clean energy technologies and improve efficiency. The five countries – the United States, China, Japan, India and South Korea – differed, however, on how urgently oil subsidies should be phased out, with Washington backing bold movement while India and China warned of political and economic instability.

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Lehman Brothers Holdings Inc may raise billions of dollars of fresh capital, suggesting the investment bank will post its first quarterly loss since going public, the Wall Street Journal said on Tuesday, citing sources familiar with the matter.

Analysts and Wall Street executives estimate it might total $3 billion to $4 billion, the newspaper said.

Lehman may issue common stock, diluting current shareholdings, and will probably reveal its capital plans when it reports quarterly results the week of June 16, the WSJ said.

Lehman’s market value is about $18.7 billion, based on Monday’s closing stock price of $33.83, Reuters data shows.

The report sparked selling in the U.S. dollar and weighed on Asian stocks, while boosting demand for safe-haven government bonds such as U.S payday loan. Treasuries.

“The developments are a reminder to markets that the effects of the credit crisis continue to reverberate around markets,” said Zurich-based UBS currency strategist Geoffrey Yu in a note to clients.

According to recent analysts research notes, Lehman has been hurt by hedges used to offset losses in various securities.

Second-quarter losses from asset writedowns and ineffective hedges are likely to top $2 billion, the newspaper said. The bank will also realize losses tied to job cuts, the WSJ said, citing a person familiar with the matter. 

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Bank of Montreal profits dropped to $642 million in the second quarter as the bank booked $151 million in provisions for credit losses, but gave a mildly optimistic outlook on the state of credit markets.

Earnings for the period ended April 30 were worth $1.26 per share, down from $671 million or $1.31 per share a year ago.

The bank's revenue improved four per cent year-over-year, to $2.62 billion.

In the capital markets division, net income dropped 7.5 per cent to $182 million, including a recovery of $42 million pre-tax, or about six cents per share, from writedowns logged in previous quarters.

Part of the reversal of previous charges was tied to the troubled Apex and Sitka asset-backed commercial paper trusts. Apex underwent a restructuring that completed on May 13, after the quarter ended, and the bank says it expects to recover more of its writedowns in the third quarter.

"Results in BMO Capital Markets reflect current market conditions as activity in the investment banking business was slow in the quarter," said BMO president and CEO Bill Downe.

But, he added, the bank has seen "indications that concerns are easing in credit markets as credit spreads are trending towards more normal levels and we are encouraged by these developments."

BMO's earnings per share (TSX: BMO) were below expectations, excluding the recoveries and an unusually low tax rate of 16.3 per cent, according to John Aiken of Dundee Capital Markets quick payday loan. He said core EPS was between $1.10 and $1.14 per share, compared with a Thomson Financial consensus expectation of $1.19.

"Further, with BMO, traditionally the low-provision bank, increasing its provision guidance, we believe that the other banks will face earnings headwinds in the coming quarters related to deteriorating credit and higher provisions," Aiken added.

BMO shares opened with a gain of one per cent after the quarterly release, but by midmorning were down 16 cents at $48.84 – compared with over $70 a year ago.

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A top aide to billionaire investor Kirk Kerkorian says Ford Motor Co. should sell its Volvo and Mercury brands.

Jerry York tells Automotive News for a story Thursday he sees no reason for keeping them. York says he’s confident in Ford’s turnaround plan and thinks the automaker will put Volvo on the market within 1 1/2 years.

Kerkorian disclosed Monday that he acquired a 4.7% stake in Ford and hoped to boost his holdings. His investment company plans to make an offer for up to 20 million additional shares at $8.50 a share.

Ford (F, Fortune 500) spokesman Mark Truby told The Associated Press on Friday that Volvo isn’t for sale and that the company is investing in Mercury savings account payday advance. But he said the automaker continues to evaluate its portfolio. 

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Advanced Micro Devices Inc (AMD.N: Quote, Profile, Research) on Sunday unveiled its first computer brand, aimed at small and medium-sized businesses, with design and sales help from its major chip customers such as Dell Inc.

AMD Business Class desktop personal computers will be followed by notebook PCs in the second half of this year.

AMD customers who plan to sell the computers include Acer (2353.TW: Quote, Profile, Research), Dell, Fujitsu-Siemens, Hewlett-Packard Co (HPQ.N: Quote, Profile, Research), and Lenovo (0992.HK: Quote, Profile, Research), said Hal Speed, a marketing architect for AMD based in Austin.

“It’s not like retail,” he said. “People are buying this for work and we really tried to identify the nuggets (of technology for business desktop PCs) that weren’t being looked at.”

The new product line is part of AMD’s efforts to regain its competitive edge against Intel Corp (INTC.O: Quote, Profile, Research) after a disastrous 2007. AMD has reported six consecutive quarters of net losses as Intel has regained much of the market share that it lost to AMD in 2005 and the first part of 2006.

AMD is also seeking to use the leverage it built with the success of its Opteron microprocessors, which have made inroads into the server market over the last few years against Intel, a larger company.

“AMD has tackled the consumer market, they’ve made significant inroads into the mobile PC market, and they’ve made some inroads into the business market,” said Dean McCarron, an analyst at market research firm In-Stat no checking account payday advance. “This is an important program for them.”

AMD said Business Class is initially aimed at the small- and medium-size business market, but is also designed to scale up to the biggest corporate clients as well. The desktops include AMD Phenom X3 triple-core and AMD Phenom X4 quad-core processors as well as AMD Athlon X2 dual-core processors. 

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The Federal Reserve should threaten banks to make them raise more capital as a step toward restoring faith in credit markets, central bank policy-makers were urged on Friday.

“I think the most important thing for the Fed to do is not just use moral suasion, but a baseball bat with respect to the banking system,” Paul McCulley, managing director at bond fund manager PIMCO, told a conference in response to a question from Fed Vice Chairman Donald Kohn.

Kohn asked McCulley and other panelists at a credit market symposium hosted by the Richmond Fed whether market strain had persisted and whether the Fed’s actions to relieve strain were working.

“If you are under strain, don’t cut your dividend. Eliminate your dividend. You don’t want to dilute existing shareholders? Well, dilute them,” McCulley urged. “A more forceful move by the Fed beyond moral suasion on capital raising is necessary to fix that problem,” he said.

Bankers and policy-makers spent two days talking about credit strains and systemic risk as financial markets battle to regain their footing from the shock of the collapse of the subprime mortgage market payday loans.

Richmond Federal Reserve chief Jeffrey Lacker said he was confident that measures taken by regulators and financial firms to make the system safer would yield results, but were not a silver bullet for current market woes.

“I am confident myself that the result of this (regulatory) response will be broadly beneficial, and will result in improvements in the efficacy of financial arrangements, even if the response doesn’t result in the complete absence of financial market turmoil from now on,” he said.

Darryll Hendricks, managing director and global head of quantitive risk control at Swiss bank UBS, said that the Fed’s emergency liquidity measures had helped to ease strains, but had not removed the fear of a truly damaging upset in markets. 

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