When Cora and I understood that gas prices would remain at an all-time high this summer, we decided to stay home and make do with what entertainment we could find around the neighborhood. Cora looks at this "home adventure" as a return to childhood, where her mother will play a two-month-long game of RISK with her, and where she can make frozen popsicles from fruit juice concoctions. I look at staying home as a form of will power, where I will not spend $100 at the local mall on items like perforated rubber "soap savers" just because we didn't go anywhere.

Other than games, kitchen antics, and mall behavior modification, we also try to predict the weather in various parts of the world and then we compare our guesses with the Weather Channel (great background noise for closet cleaning). Then, we try to understand how that weather will affect our various investments or the equities in our watch portfolios. Weather creates a huge impact on our economy. In fact, last year's hurricane season is probably one major reason why we're at home this summer, as the 2005 hurricanes played havoc with the Gulf of Mexico's oil and gas production.

Hurricane season began on 1 June and it ends on 30 November (or so they say). The weather pundits were wrong about a "pre-hurricane season hurricane," unless you count Tropical Storm Zeta, which began on 5 December 2005 and dissipated about 6 January 2006. But we worry, because the Gulf waters have remained at an 85 degree balmy average, with a current high of about 89 degrees in Pensacola, Florida. That Pensacola number is higher than at any time during all of 2005. You can check out the current coastal water temperatures along the eastern and southern U.S. at the National Oceanographic Data Center (NODA), a division of National Oceanic and Atmospheric Administration (NOAA).

This high water temperature translates into a ripe environment to foster and feed cyclonic activity. On 22 May this year, NOAA released its forecast for the 2006 season. They predict 13 to 16 named storms, with 8 to 10 becoming hurricanes, and 4 to 6 becoming major hurricanes. That same week, on 19 May, President Bush declared that week as "National Hurricane Preparedness Week," and directed individuals to a Homeland Security site, where a list is available to help those along coastal areas to prepare for this year's storms.

While the number of predicted storms for 2006 falls short of last year's record storm number,* we hope that people who live along hurricane paths don't become complacent about safety. In light of last year's snafus by various governmental departments and national and state officials, some pre-game announcements by the same have been launched:

• The U.S. Department of Treasury has called upon all hurricane-zone residents to sign up for direct deposit of Social Security checks immediately so that citizens along the Eastern and Southern coastal regions can enjoy uninterrupted payments. Cora and I also discovered that one main reason behind this promotion, other than problems created by banks which disappear during hurricanes and resultant tornados, is that the Department of Treasury issued over 70,000 checks worth approximately $61,000,000 that were illegally signed for in 2004. Additionally, the direct deposit program has resulted in approximately $5,000,000,000 in savings for the Federal Government since 1986 (see the link for "Senate Resolution" in the right sidebar of that "Go Direct" site link).
  
  
• A University of Texas study shows that 43 percent of businesses which suffer a catastrophic loss never recover, and that half of those businesses close shop within two years. While the Small Business Administration (SBA) offers loans for small businesses and individuals to recover from disaster, they're pushing flood insurance to those within the hurricane zones to help mitigate the number of loans that aren't covered by flood insurance. For more insight into the figures behind this SBA news release, see their PDF file, dated 22 May.
  
  
• "Flood insurance is the only way to financially protect your property or business from flood damage." That quote comes from the Federal Emergency Management Agency, or FEMA. This federal agency points readers to FloodSmart.gov, where "everyone is at risk" for floods, especially since some hurricane effects are felt as far north as Pennsylvania and New York. In other words, the federal government is making a stand on what is or isn't covered, and how you will or won't be helped after a flood, dependent upon your flood insurance coverage.

Since Cora and I are already well-weathered by hurricanes (Cora braved the worst of Katrina last year, and I swore off the Gulf Coast after my brush with Hurricane Andrew in 1992), we know the immediate damage that can occur from these storms. The outlying damage can be just as severe, as the economics surrounding these natural disasters affects everyone in this country. On the other hand, if you study the points above and various flood insurance companies on the stock market, or at how financial institutions handle direct deposits (which software do they use, etc.?), then you might blaze a new avenue for investment possibilities.

Hopefully, all predictions will fly out the window this year and we may see a drop in gas prices as a result. You might keep an eye on the weather, though, and be prepared. While professional predictions are as good as it gets until the first and last storms roll in, the economic realities behind hurricanes have been proven by last year's effects. If this year is just as horrific, we may need to batten down the hatches on more than those storm windows?

Until Next Week,
Linda Goin

* A total twenty-eight tropical and subtropical storms occurred in 2005, of which a record fifteen became hurricanes. Of these, seven strengthened into major hurricanes, a record-tying five became Category 4 hurricanes and a record four reached Category 5 strength, the highest categorization for Atlantic hurricanes (for information about Category Strengths, see the Saffir-Simpson Hurricane scale at Wikipedia). Among these Category 5 storms was Hurricane Wilma, the most intense hurricane ever recorded in the Atlantic.