Europe eyes bolstering banks ahead of debt storm (Reuters)

DUBLIN/FRANKFURT (Reuters) – European banks may need more than 100 billion euros ($135 billion) to withstand the sovereign debt crisis, Ireland estimated on Saturday ahead of a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy to work out how to recapitalize the lenders.

The falling value of banks' holdings of government debt from Greece and other euro zone periphery states has already prompted the implosion of Belgian lender Dexia, adding urgency to the Merkel-Sarkozy talks on the crisis.

Germany and France have so far been split over how to strengthen shaky lenders and fight financial market contagion that may follow a possible Greek default.

Paris is keen to tap the euro zone's 400 billion rescue fund, the EFSF, to recapitalize its own banks, while Berlin is insisting the fund should be used as a last resort.

The International Monetary Fund (IMF) has said European banks need 200 billion euros in additional funds.

Irish Finance Minister Michael Noonan said the capital needed to bolster banks cushions was likely to come from a variety of sources but the bill would be large.

"I think there is general agreement that it will be significantly in excess of 100 billion (euros)," Noonan told reporters on the sidelines of an economic forum in Dublin.

"I know that some of the big German banks that I was talking to personally intend raising money on the market so it will be private funding. Other banks would like to avail of the EFSF fund. Other banks will rely on their sovereign governments to provide the capital so there is going to be a range of ways of doing it," he said.

Regulators worry that forcing a raft of major lenders to take state aid would not be the best use of Europe's capital resources, while banks fear than singling out only some lenders for extra support could heighten market worries about weaknesses at individual banks.

German newspaper Frankfurter Allgemeine Zeitung on Saturday cited financial sources as saying France's five-biggest lenders would agree to take 10-15 billion euros in funding from the French state but also wanted to see Germany's No. 1 lender Deutsche Bank plump its capital cushion.

Deutsche Bank Chief Executive Josef Ackermann is against any role for the state in his own bank's capital position and has ruled out a capital increase.

A Deutsche Bank spokesman on Saturday referred to Ackermann's long-standing public position and declined further comment.

Sarkozy is due to arrive in Berlin late on Sunday afternoon and hold a working dinner with Merkel in the evening, amid signs that conditions for resolving the crisis are getting no easier.

Slovakia's coalition government was in deadlock on Saturday over talks on ratifying a strengthening of the EFSF rescue fund, with a junior party insisting on conditions for its support.

Euro zone minnows Slovakia and Malta are the last countries holding up expansion of the EFSF mandate, which is needed to fight the sovereign debt crisis.

Meanwhile, Greece's representative at the IMF said the country's borrowing needs will be higher than currently projected due to a tougher-than-expected recession and the outcome of a debt agreement with private sector creditors.

"This financing gap will have to be covered either by increasing the 109 billion euro loan agreed on July 21 or through a restructuring of private debt," Panagiotis Roumeliotis said in an interview in financial daily Imerisia.

EU leaders agreed in July to provide Greece with a second bailout of more than 109 billion euros to help the country service its debt through to 2020. ($1 = 0.741 Euros)

(Reporting by Jonathan Gould, Sarah Marsh, Carmel Crimmins, Lorraine Turner, Christian Plumb, Philip Blenkinsop and Andreas Rinke; Editing by Alison Birrane)

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Longshoremen storm Wash. port over labor dispute (AP)

LONGVIEW, Wash. – Hundreds of Longshore workers stormed the Port of Longview early Thursday, overpowered and held security guards, damaged railroad cars, and dumped grain that is the center of a labor dispute, said Longview Police Chief Jim Duscha.

Six guards were detained for a couple of hours after 500 or more Longshoremen broke down gates about 4:30 a.m. and smashed windows in the guard shack, he said.

No one was hurt, and nobody has been arrested. Most of the protesters returned to their union hall after cutting brake lines and spilling grain from car at the EGT terminal, Duscha said.

The International Longshore and Warehouse Union believes it has the right to work at the facility, but the company has hired a contractor that's staffing a workforce of other union laborers.

Meanwhile, the international union is investigating reports of a wildcat strike at the ports of Seattle and Tacoma.

"It appears the members have taken action on their own," said ILWU spokesman Craig Merrilees from union headquarters in San Francisco. "We're trying to understand how many are involved and to what extent this apparent wildcat action has spread."

Thursday's violence at Longview was first reported by Kelso radio station KLOG.

Police from several agencies in southwest Washington, the Washington State Patrol and Burlington Northern Santa Fe responded to the violence to secure the scene that followed a demonstration Wednesday.

"We're not surprised," Duscha said. "A lot of the protesters were telling us this in only the start."

One sergeant was threatened with baseball bats and retreated, Duscha said. "One officer with hundreds of Longshoremen? He used the better part of discretion."

The train was the first grain shipment to arrive at Longview. It arrived Wednesday night after police arrested 19 demonstrators who tried to block the tracks. They were led by ILWU International President Robert McEllrath, who said they would return.

The blockade appeared to defy a federal restraining order issued last week against the union after it was accused of assaults and death threats.

EGT chief executive Larry Clarke said it was unfortunate that law enforcement needed to make arrests.

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Tropical Storm Lee lumbers toward Louisiana coast (Reuters)

NEW ORLEANS (Reuters) – Slow-moving Tropical Storm Lee strengthened as it lumbered toward the Louisiana coast on Saturday, bringing torrential rains that will put the flood defenses of low-lying New Orleans to the test.

The storm is expected to reach the Louisiana coast later on Saturday and bring up to 20 inches of rain to southeast Louisiana over the next few days, including to New Orleans, which was battered by Hurricane Katrina in 2005, the U.S. National Hurricane Center said.

The center of Lee was 45 miles southwest of Morgan City, with maximum winds of 60 miles per hour, the hurricane center said. Lee's winds were expected to stay below the 74 mph threshold of hurricane strength.

But the prospect of flooding in low-lying New Orleans evoked memories of Hurricane Katrina, which flooded 80 percent of the city, killed 1,500 people and caused more than $80 billion in damage. Half of the city lies below sea level and is protected by a system of levees and flood gates.

The city's extensive levee system is capable of processing about one inch of rainfall per hour, but the storm's slow-moving nature could bring challenges, officials said.

EVACUATIONS

Low-lying parishes around New Orleans saw rising waters, which covered some roadways in Plaquemines and St. Bernard parishes, but no homes or businesses were threatened. Some residents in Jefferson Parish were ordered to evacuate.

Periodic breaks in the rainfall allowed the city's giant pumps to catch up with the water flow and clear standing water, said Jefferson Parish President John Young.

"Everything looks good," Young told local television. "The pumps are keeping up with the water. We are getting some street flooding."

Lee will weaken once it hits land, but it will lose strength more slowly than normal due to the marshy nature of the Louisiana coast, the hurricane center said.

Lee's northeasterly track could bring heavy rains to Mississippi, Alabama, Georgia, Tennessee and the Appalachian Mountains next week.

Major offshore producers like Royal Dutch Shell, Exxon Mobil Corp and BP Plc shut down platforms and evacuated staff earlier this week.

Shell began returning workers to its offshore Perdido platform in the western Gulf of Mexico on Saturday.

About half the U.S. offshore oil production, all based in the Gulf of Mexico, and a third of offshore gas production were shut as of Friday, according to the U.S. government. Most of that output should quickly return once the storm passes.

Louisiana Governor Bobby Jindal on Friday warned that heavy rains, substantial winds and tidal surges from the Gulf of Mexico could produce flash flooding in parts of New Orleans throughout the Labor Day holiday weekend.

Meanwhile, Hurricane Katia weakened to near tropical storm strength as it churned in the Atlantic Ocean, 485 miles east-northeast of the northern Leeward Islands. Katia had maximum winds of 75 mph, moving northwest at 10 miles per hour.

(Additional reporting by Erwin Seba in Houston, Writing by Chris Baltimore; Editing by Vicki Allen)

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Oil companies brace for possible Gulf storm (Reuters)

HOUSTON (Reuters) – A tropical depression hovering over the central Gulf of Mexico on Friday threatened to bring heavy flooding to the energy infrastructure-heavy Gulf Coast in the coming days.

Tropical depression 13, which could become Tropical Storm Lee later on Friday, has already prompted oil and gas producers to shut down platforms and evacuate workers from the offshore oil patch that provides about a third of the nation's oil production and about 12 percent of its natural gas.

The slow-moving system that has essentially parked about 210 miles south of the mouth of the Mississippi River could bring up to 20 inches of rain over southern Louisiana, Mississippi and Alabama through Sunday, the National Hurricane Center said.

Louisiana Governor Bobby Jindal on Thursday declared a state of emergency, citing the likelihood coastal and inland areas would be drenched by up to 15 inches of torrential rain within 48 hours.

Heavy, prolonged rains could pose a severe test to low-lying New Orleans and its protective levee system.

The Gulf Coast is home to 40 percent of U.S. refining capacity and 30 percent of natural gas processing plant capacity. Much of that infrastructure is in southeast Texas and near the coasts of Louisiana and Mississippi.

"They're calling for 18 to 20 inches of rain in spots over the next several days. You've got big issues," said Aaron Studwell, a meteorologist with Wilkens Weather in Houston.

Will Hinson, spokesman for Exxon Mobil Corp's joint-venture 192,500 barrel-per-day (bpd) refinery in Chalmette, Louisiana, said the plant was prepared and was operating normally.

Other refiners also said they were prepared for bad weather and were monitoring the system.

Major Gulf producer Royal Dutch Shell spokeswoman Kelly op de Weegh said on Friday the company had "minimal" production impacts, but had evacuated 500 workers and may evacuate more. Shell operates six oil and gas platforms in the Gulf.

Other producers, including BP Plc and Anadarko Petroleum Corp, were shutting all output and evacuating all workers.

Studwell said the system was about 190 miles southwest of the center of Mississippi Canyon and 75 miles south-southwest of Green Canyon, the two areas of the Gulf with the highest concentrations of oil and gas platforms.

(Reporting by Kristen Hays and Erwin Seba; editing by Jim Marshall)

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Assad loyalists storm U.S. and French embassies in Syria (Reuters)

AMMAN (Reuters) – Protesters loyal to Syrian President Bashar al-Assad briefly broke into the U.S. embassy in Damascus on Monday and security guards used live ammunition to prevent them storming the French embassy, diplomats said.

No casualties were reported in the attacks but a U.S. official said Washington condemned Syria's slow response and its failure to the prevent the assault on its embassy.

The attacks followed a visit by the U.S. and French ambassadors to the city of Hama last week in support of the hundreds of thousands of pro-democracy demonstrators who have been gathering there despite attacks by Syrian forces.

"We are calling in the Syrian charge (d'affaires) to complain," said the U.S. official, who spoke on condition of anonymity.

"We feel they failed (in their responsibility to protect U.S. diplomats). We are going to condemn their slow response."

Human rights groups say at least 1,400 civilians have been killed since an uprising began in March against Assad's autocratic rule, posing the biggest threat to his leadership since he succeeded his father 11 years ago.

In other violence on Monday, Syrian forces killed one civilian and wounded 20 in heavy-machinegun fire on Homs, Syria's third city, and went house-to-house arresting suspected opponents in Hama, human rights activists said.

Despite using force to crush the protests, Assad has also called for talks on reforms. But many opposition figures have refused to attend a two-day conference in the capital, saying it was futile as long as violence continued.

"Dialogue can only work when both parties respect each other and look at each other as equals," said Ayman Abdel-nour, the Gulf-based editor of all4syria.com website. "At the moment, there is no dialogue."

Vice President Farouq al-Shara told the opening ceremony of the Damascus conference on Sunday that the authorities would open a new page, hinting at allowing political parties, other than the ruling Baath Party, to operate.

The meeting was expected to discuss legislation which would allow a multi-party system and constitutional amendments.

But independent analysts said reform would remain on paper as long as the security apparatus and Assad loyalists continue to operate with impunity against demonstrators.

Hilal Khashan, a Lebanon-based political commentator, said Assad's call for dialogue was not serious and aimed at buying time.

"If the regime was serious about reforms, they would change their security measures. Nobody in their sound mind would expect anything from Damascus as genuine political reform. The regime is buying time," he added.

(Additional reporting by Oliver Holmes in Beirut and by Paris and Washington bureau; editing by Timothy Heritage and Jon Boyle)

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Ariz. washes away dust deposited by massive storm (AP)

PHOENIX – Arizonans are calling it the mother of all dust storms.

The mile-high wall of ominous, billowing dust that appeared to swallow Phoenix and its suburbs is all that locals can talk about.

It moved through the state around sundown Tuesday, halting airline flights, knocking out power to nearly 10,000 people, turning swimming pools into mud pits and caking cars with dirt.

The sky was still filled with a hazy shade of brown Wednesday as residents washed their cars and swept sidewalks.

Because dust storms, also known by the Arabic term "haboobs," are so hard to predict, Tuesday's took everyone by surprise.

Seemingly out of nowhere, the 100-mile-wide storm moved like a giant wave, the dust roiling as it approached at up to 60 mph. Once it hit, visibility dropped to zero in some areas, the sky turned nearly black, trees blew sideways, and even downtown Phoenix skyscrapers became invisible.

"Just the height of it looked like a special-effect scene from a movie, like a dust storm out in Africa," said Charlotte Dewey, a National Weather Service meteorologist in Phoenix. "It looked so huge, looking at the city down below, it was just specks of light and miniature buildings.

"I have a feeling that people will be talking about this for another week or two, at least," Dewey said.

She said meteorologists were still trying to get exact measures from satellite and radar to figure out how big the dust storm was and compare it with previous ones, but they estimate it was more than a mile high and more than 100 miles wide.

"People who've lived here their whole lives, 30 or 40 years, are saying they've never seen a storm this large," Dewey said.

She said winds from separate thunderstorms in the eastern and southern parts of the state collided somewhere between Phoenix and Tucson and combined with a severe lack of moisture to create the wall of dust. The storm also hit the Yuma area in southwestern Arizona, and far western Arizona.

Haboobs only happen in Arizona, the Sahara desert and parts of the Middle East because of dry conditions and large amounts of sand, Dewey said.

"It's a pretty rare thing to be able to see," she said.

While some Arizonans revel in the strange weather, many were unlucky enough to be outside when the storm rolled in. The storm blasted them with dust that went up their noses, behind their contact lenses and in their mouths, leaving behind a gritty taste.

Holly Ward, a spokeswoman at the Maricopa County Air Quality Department, said pollution levels skyrocketed.

During the storm, the amount of particulate matter in the air reached 375 micrograms per cubic meter, more than double the level federal standards consider healthy.

"You didn't have to go far anywhere in the dust storm to feel the remnants of that dust in your throat and in your nose," Ward said. "If someone already has breathing problems like asthma and bronchitis, this is an incredible health challenge and serious health threat for those folks."

The dust storm also grounded flights at Phoenix's Sky Harbor International Airport for 45 minutes. At least three flights were canceled and more than a dozen were delayed, while several incoming flights were diverted to Tucson and Ontario, Calif., said airport spokesman Julie Rodriguez.

Federal Aviation Administration spokesman Lynn Lunsford said planes need to be grounded during dust storms because of the low visibility, high winds and potential damage from the dirt.

"If you think about it, glass is made from sand that has been melted, and if you think about the temperature inside a jet engine, it's hot enough to melt sand," he said. "If you can't see through it, you definitely don't want to fly through it."

He likened the storm to volcanic ash that wreaked havoc in the skies in April 2010, when an eruption grounded flights across Europe for days, disrupting travel for 10 million people.

Arizona's dust storm annoyed others who couldn't see out of their car windows or found their pools filthy in the morning. But that created pay dirt at local businesses.

"It's crazy here," said Margaret Viloria, manager of Los Olivos Hand Car Wash near downtown Phoenix. "When we opened this morning cars were lined up outside. It's just been nonstop."

On a typical day, the car wash cleans about 25 to 30 cars an hour. It was averaging 55 an hour Wednesday, Viloria said.

Joe Pinelli, owner of The Pool Service in Phoenix, was also having an "absolutely chaotic" day.

"I don't think I've been off the phone since about 6 a.m.," he said.

Dewey, the weather service meteorologist, said there was a slight chance of blowing dust in the Phoenix area Wednesday and Thursday and a slight chance of thunderstorms the rest of the week.

"As far as if it would be of any magnitude we saw Tuesday, I don't know," she said.

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Fierce storm surprises Wis. campers, child killed (AP)

GRANTSBURG, Wis. – A fierce thunderstorm swept through a normally rural Wisconsin county that was packed with holiday campers, toppling trees that killed an 11-year-old girl, blowing boats ashore and injuring more than three dozen people, officials said Saturday.

The storm moved across Minnesota and Wisconsin on Friday, packing winds approaching 80 mph and hail as large as softballs.

In northwestern Wisconsin's Burnett County, at least 39 people went to hospitals after the storm toppled hundreds of trees and left several thousand utility customers without power. Authorities said most of the injured were treated and released, but three were in critical condition Saturday afternoon.

A search was under way Saturday along the St. Croix River for missing canoeists, the Wisconsin Emergency Management Office reported. Boats were upended and blown ashore in the area, while an airport hangar in neighboring Douglas County collapsed onto a single-engine plane.

The storm came at one of the worst times of the year for rural Burnett County: a summer holiday weekend, when the area's lakes and rivers attract tens of thousands of visitors, said Rhonda Reynolds, a regional director for Wisconsin Emergency Management.

The county population is 17,000 she said, but the long weekend drew an estimated 80,000 visitors to the county about 90 miles northeast of Minneapolis.

"The weekend holiday traffic is complicating things just because of the number of people," she said. "Emergency crews are trying to get access to various areas but with trees blocking roads, and with all the people, movement is restricted."

Law enforcement reported the girl who died was killed when a tree fell on her at a campground in the county. No other details were immediately released.

The storm moved into southwest Minnesota on Friday afternoon and took nearly six hours to pass through before slipping into northwest Wisconsin, said Matt Friedlein, a National Weather Service meteorologist. The bad weather had moved out by Saturday morning, when skies were clear and sunny with temperatures in the 80s.

Anita Frase, the owner of Bay Park Resort & Campground in Trego, said she and the resort's 300 visitors knew a storm would be coming but they didn't expect it to hit so swiftly and with such intensity.

"About 9 o'clock the winds picked up and within five minutes it was upon us. Those were probably the darkest skies I've ever seen up here," she said, adding that the storm knocked down several trees, with some landing on vehicles. "A lot of people were very nervous. Some of the kids were crying."

Workers were also rattled at a Grantsburg store near the St. Croix River that rents canoes, kayaks and boating gear. Store clerk Aimee Van Tatenhove said the wind was so strong and loud that no one realized a medium-sized tree had fallen into the roof until employees went outside.

In Minnesota, a driver suffered minor cuts when hail the size of a baseball hit a vehicle's windshield, said Meeker County Sheriff Jeff Norlin. Roofs were torn away in several towns.

"Some communities had multiple passes at this storm — including golf ball-, baseball- and softball-sized hail," said McLeod County Emergency Management Director Kevin Mathews, who said two tractor-trailers were blown off local highways.

Two Minnesota state parks sustained tree damage so heavy that a conservation officer who was making sure no campers were in the area had to abandon his vehicle and hike back out on foot, said Chris Niskanen of the Minnesota Department of Natural Resources.

He urged people to stay out of Camden State Park and St. Croix State Park, which are technically closed because of the state's government shutdown but could still attract campers because they're public land. He cautioned that some trees may have uprooted but gotten hung up tenuously on other trees.

"It's an issue of health and safety," he said. "Since those parks are closed they don't have the personnel to go in and remove (the trees). People need to know there's a danger if they start wandering around."

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