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 At least 73,533 of 600,000-plus bridges in the nation are currently classified as "structurally deficient," the Federal Highway Administration reminded the country yesterday.
After the disaster in Minneapolis, the FHA stated 12% of U.S. bridges hold this rating because they are either too weak to handle heavy loads, in need of immediate repair or closed because of imminent danger to motorists. Incredibly, many of these “deficient” bridges were built as recently as the early ’90s.
The cost to repair the nation’s bridges: at least $9.1 billion a year, until 2027, says the American Society of Civil Engineers. We’ve been assembling a report on the best infrastructure plays for the better part of 2007, so keep your eyes peeled.
 Markets endured another skittish trading day yesterday. The Dow and S&P flirted with the red, but in the end, the bulls prevailed… both indexes gained a little less than 1%.
 “Unless you don’t have a pulse, you’ve noticed the markets have been quite volatile the past few weeks,” writes Brian McCauley in an alert to his Survival Report readers. “Many indexes have lost 6-10% from the July highs. But the real story has been what’s been going on beneath the decline.”
Last Thursday, the market’s worst day so far in this correction, there were over 700 more new 52-week lows than new 52-week highs, a level reached only five times since 1991.
“With the exception of 1994, all the other times we saw breadth this bad was at the end of a major decline,” Brian told his readers. “What makes last week’s extreme breadth readings so interesting is that even though the major headline indexes were only a few percent off their record highs, over 700 stocks on the New York Stock Exchange were lower than they had been in a year.
“What this suggests is that even though the major indexes have continued to rally over the past six months, it has been a very narrow and ‘hollow’ rally, in which many stocks have not been participating.”
In the next issue of The Survival Report, Brian and Mish promise readers a full analysis of the market correction, along with a technical forecast of what’s to come. Click here to subscribe in time…
 This morning’s employment report revealed an increasing jobless rate and slowed employment growth… signs of the economy reacting to the slowing housing market and fallout from the collapse of subprime lending.
Nonfarm payrolls increased just 92,000 in July, far below “expectations.” The unemployment rate, as calculated by government quants and Maria Bartiromo, ticked up a tenth of a percent, to 4.6%.
Also of interest, U.S. manufacturing employment dropped again -- its 13th month in a row. Domestic manufacturers have not hired more workers than the previous month since June 2006.
 It’s been a pretty boring week for the dollar and its major rival currencies. Aside from a small rally in the yen and Swiss franc markets, traders have kept things pretty quiet in our first week of August. The dollar has inched up a few hundredths of a cent here and there, but prices remain about the same -- $1.36 per euro, $2.03 per pound and 119 yen per dollar.
“While the dollar has been little changed versus most of the currencies this week,” explains Chris Gaffney from the EverBank World Markets desk, “the interest rate differentials will come back into focus after these rate announcements and the dollar will likely start back on its slow slide down.
“Central banks around the world are raising rates to tackle the threat of accelerating inflation. We have seen recent increases by New Zealand and Canada and expect the Bank of Japan to move its rate up. By contrast, the U.S. Federal Reserve has kept its benchmark rate unchanged, and the housing meltdown will prevent it from raising the rate well into 2008. The rate differentials will continue to put downward pressure on the dollar.”
 The gold ETF saw a record level of investments this week. Investors piled in $140 million on Wednesday alone… thus, the current total gold stockpile for this popular ETF sits at its all time high -- over 20 million ounces of the yellow stuff.
Gold itself has had somewhat of a dull week, as well… it’s slowly crept up from last week’s corrections and currently trades at $668.
 “Offshore drilling stocks are still cheap,” says Dan Amoss of Strategic Investment. “All are trading in the range of seven-10 times 2008 earnings estimates (in blue) and nine-20 times trailing-12 months’ cash flow (in red). And these multiples get smaller as you look into a future of visible growing earnings and cash flow. This growth will come over the next few years when these companies book the high-margin contract work that already exists in their backlogs:”
Dan’s been ringing the bell for offshore drilling stocks for some time. His offshore equipment supplier play in Strategic Investment is up 91% in nine months. But according to Dan, the recent merger of Transocean (RIG) and GlobalSantaFe (GSF) indicates very strong insider bullishness.
“This is a ringing endorsement from two great management teams that their stocks are too cheap -- so cheap that it makes more financial sense to acquire peers than to try to replicate them in shipyards,” says Dan. “The executives at Transocean and GlobalSantaFe clearly see opportunity in the continued strong demand for offshore drilling, and they’re ‘hitting the accelerator,’ so to speak. This is a very important signal amid the noise of day-to-day financial news.”
 American Home Mortgage, the very screwed lender highlighted by The 5 on Wednesday, officially kicked the bucket today. The company announced it will close its doors, lay off 90% of its work force (about 7,500 souls) and seek bankruptcy protection immediately. This makes AHM on one of the worst causalities of the subprime bust, but certainly not the last.
We wouldn’t be surprised if we hear from these guys again. This subprime bust is eerily reminiscent of the dot-com bust. Companies like AHM are hailed as innovators. The stock skyrockets. Then the accounting gets fuzzy. Bankruptcy. Shareholders get left holding worthless paper. The principals of the company walk away unscathed… and set up shop somewhere else.
Our "Rude" partners highlighted the demise of yet another mortgage lender... click here for the full story in this morning’s Rude Awakening
 Here’s a funny story. Sean Penn, the Oscar-winning actor, has become quite close with Hugo Chavez. Penn recently called Cheney and Rice "villainously and criminally obscene people," and apparently that struck a chord with Hugo. Hugo got on Venezuelan TV on Wednesday and publicly welcomed Sean to the country. "He's one of the greatest opponents of the Iraq invasion," Hugo claimed.
Yeah, we oppose the invasion, the war and Cheney, too. We’re not all that fond of Rice, either. But does that put us in bed with that Venezuelan nutjob?
 “The chief executive and the governor of Guangzhou” writes a reader, “just made a joint presentation regarding the deadline for establishing enhanced crossborder transport with links to the new high speed (300 kph) rail service now beginning to snake its way across China. Guess who's thinking ahead?”
Surely, one of many arenas in which China is about to eclipse the U.S. But as railroads go… that wouldn’t take much.
 “Amtrak has never made a profit in its 25 years,” wrote in a reader armed with a few interesting stats. “Since 1972, Amtrak has received more than $13 billion of federal subsidies and is demanding a half cent of the federal gasoline tax so it can permanently be on the federal dole.
“Presently, the average taxpayer already subsidizes $100 per Amtrak rider, or 40% of the total per passenger cost. Even this figure doesn't adequately express how hugely inefficient some long-distance routes are today. For example, the average subsidy to a New York-Los Angeles rider exceeds $1,000. The estimated round-trip subsidy per passenger for a Denver-Chicago trip is $650. It would be cheaper for taxpayers to purchase discount round-trip airfare for all these Amtrak riders.
“Amtrak's typical riders are not low-income Americans. The poor are less likely to travel by Amtrak than by most other travel options. Only 13% of Amtrak passengers have incomes below $20,000. The average Amtrak rider has a higher household income than the average taxpayer. In fact, the clientele for Amtrak Metroliner service between Washington and New York consists largely of Wall Street traders, K Street lobbyists and other affluent business travelers. These folks aren't poor.”
Amtrak recently announced it’d be offering a $100-in-free-booze incentive for passengers traveling on sleeper trains, too. What’s so bad about government subsidies?
 “I'm libertarian-leaning,” writes another reader, “but where you dyed-in-the-wool types flame out in hypocrisy is when you get behind the wheel and expect your roads and bridges to go where you want to go and to be in tiptop shape and the government better be up to the job. What kind of idiot company would build and maintain a bridge? Or an interstate highway?”
Dyed-in-the-wool types?
We can think of several “idiot” companies in this business, but for the sake of preserving your five minutes, how about just one: the Macquarie Infrastructure Group. MIG owns 11 toll roads (including a few bridges) in seven different nations, and currently has a market cap of around A$9.1 billion. It is, in turn, owned by Macquarie Bank Group, which despite its recent mix-up in the subprime fiasco, is one of the most successful group of banks and investors in the world.
 “It sure seems like every time one of your letters makes a few good picks, you feel a need to raise the price of the letter (the latest being Chris Mayer's Special Situations),” wrote a reader in an e-mail so politely entitled, “You’re pissing me off.”
“Shouldn't all of your letters be making good picks? Isn't that what we pay for? I'm seriously considering dumping all of your letters because of this attitude. Don't you guys take any pleasure at all in helping the readers get ahead? You are beginning to have the appearance of a group who's in it just for the money. Or is it just you, Addison?”
Last year, we raised the price on Resource Trade Alert because we were having serious issues with liquidity in the trades and paid-up traders were having trouble getting their trades filled. Supply and demand. Raise the price. Less people trying to make the trades. Last year, we raised the price of The Emerging Capital Report for similar reasons. Other than that… we’ve actually dropped prices on a number of our products.
And if you think $795 is expensive for the work Chris Mayer does in his Special Situations report, just try to get this kind of in-depth analysis and insight anywhere else in the financial world. Even if you could find it, you wouldn’t get it for less than $10,000, let alone for less than $1,000. Of course, we take pleasure in helping our readers get ahead. That’s why we’re in this business.
Have a nice weekend,
Addison Wiggin
The 5 Min. Forecast
P.S. We’re not sure what it is with you and the U.S. railroad system. This issue is hotter and more controversial than our “nutjobs” from Venezuela and the White House comment, “deathanol,” “meatheads” who drive trucks, immigration, and our black youth unemployment report. But we’re tapping emotions so often we’re considering giving The 5 Min. Forecast its own site and letting you discuss the day’s news with other 5 Min. readers, blog style. Stay tuned…
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August. 2, 2007:
Recent guerilla attacks in western Mexico have authorities on both sides of the Mexican border scrambling to protect billions worth natural gas pipelines. Companies such as Hershey’s, Honda, and Kellogg’s are losing up to $7 million a day as local rebels bomb energy sites left and right. Meanwhile, several little known organizations are well positioned to profit from a sudden energy grab... or… worse yet, a full blown U.S. / Mexico Border War. 
