bond players tend to be smarter. i'm a currency smarter so i agree. >> on that note, simon, good to be with you. >> another good show. street signs begin right no now. >> hello and welcome. we begin with breaking news. all eyes on what is now hurricane isaac. the storm inching close tor the gulf coast and nerves are high. >> they are. the hurricane center out with updates to the storm track. dr. greg, what are we seeing? >> the strength upgraded about half hour ago, still moving to the northwest about 10 miles an hour and outer effects are beginning to come on shore in mississippi and alabama and mississippi louisiana. a half hour ago, wind at 75

miles an hour. you can see the center is right here and strongest winds are in this band. we just saw flight level winds 5,000 feet up in this band with winds 180 miles an hour, 5,000 feet at surface, and less than that, 65 miles an hour. definitely, these are the strongest and another band to the south. rotating southeastern louisiana and will be in there in 6-12 hours. here's a rainfall forecast overall across the southeast. isaac has huge wide ranging impacts. look at these rainfall totals. much closer where isaac comes ashore. more than 10 inches in the gulfport, daltbaton rouge, 5-10 inches. there will be places where one of these rain bands move through and it will deposit a lot of rain and wind and storm surge as

wel well. >> thank you, greg. isaac is a massive storm. its impact far reaching. the gulf coast is on high alert ahead of the landfall. more than a million barrels per day of refining capacity is currently offline in the region and thousands of residents under a mandatory evacuation. and 1.32 million barrels per day of refining capacity offline. and the tweets about the massive storm now a hurricane, among the hashtags being used, isaac and hurricane and gulf coast. just to show how many people are talking about this, social media track up, more is being said about isaac than the republican national convention. you can really see them starting to roll in here. >> cnbc has a team of report ready to go. you have scott cohen there for

katrina. keeping you updated on the rigs and refiners. let us begin with scott cohen, who was there for katrina nearly seven years ago to the day. scott, you're comparisons for the preparation then versus now, if you can. >> reporter: it's night and day, brian. we should point out they're two very different storms. as you can see, we had rain bands come through. it's a soft gentle rain right now, we know is the proverbial calm before the storm. the preparations have been very visible. i can tell you seven years ago for hurricane katrina, we didn't see national guard troops in the streets of downtown new orleans until several days after the storm hit and levees broke. we didn't see fema or any sort of presence. we saw police in a little bit of

chaos at that point without so much as a police bullhorn to let people know what to do. it is very different this time around. again, it is a much more tame storm, but katrina is fresh in everyone's memory. there are national guard trouop already at the convention center, which was the site of so much tragedy really seven years ago during katrina. they are there now. the public seems to be heeding evacuation orders, and this $14.6 billion upgrade of the levee system that failed so catastrophically during katrina. the floodgate closed to for the first time at the 7th street canal that breached seven years ago. the officials say that can't happen anymore but that doesn't mean there are not risks. >> but there is still some residual risk at the end. you have to listen to your local

elected officials. if the mayor says advocaevacuatt is part of a risk reduction measure. you better evacuate. >> reporter: there have not been mandatory evacuations here but a lot of pronouncements from officials about getting prepared. rushing preparations to completion yesterday. people very much did seem to be heeding that, so much so, as we came into new orleans yesterday we were seeing many gas stations out of gas when it wasn't clear that the storm was going to hit here. now, it seems clear it will and hopefully people are more ready this time. >> we certainly hope so. thank you for that report. let's get to brian shactman now. what are you seeing there? >> we're not too far from where scott mentioned the national guard troops. the troops and the wind are the only noises you will hear in new orleans today. all is quiet. out on the ocean, everything in isaac's path has been evacuated. 80% of oil and gas production in

the gulf is shut in right now. we reached out to a slew of companies today including exxonmobil, bp, phillip 66, murphy petroleum, all pretty much on lockdown right now. we haven't had much information since yesterday. you can't blame them. everyone is waiting to see what happens. not much they can do until now. only one company that is not waiting, marathon petroleum, they have a refinery outside new orleans that can handle a half a million barrels a day. they looked at the charts and decided they will remain in operati operation although at a reduced rate. they wouldn't say what that is but it operates 24 hours a day. they will stay in motionality marath marathon. it might not be until the thick of the storm hits new orleans. >> thank you. let's get out to mary thompson in new jersey at at&t's global

network operations center with an update whether or not people will be able to communicate with their loved ones. >> certainly keeping their fingers crossed. this center basically allows at&t to monitor its massive network that protects or allows connectivity to your cell phones and land lines as well. the wall behind me allows access to a variety of at&t's different operations, call lines, undersea cables and cell phone towers. one thing getting a lot of attention these days is this tracking the weather, approaching isaac along the gulf coast, a storm at&t has been prepping for. here's the center's director, chuck kirchner. >> we started last week. there's a series of checklists our folks go through in those

impacted areas and make sure the generators are fired up, run properly. fuel tanks are much totopped of will make sure roofs won't fly off. >> meanwhile, they will reroute calls that tend to pour in after weather related events as family and friends check in to see if loved ones are okay. they will monitoring the walls to check cell towers that may show up as damage or impacted by the storm, allowing for quicker and hopefully more efficient deployment of personnel to that site to get the equipment and service up and running again. it's almost impossible to create a perfect plan for any weather related event. the one at&t put in place is related to past storms and the fire drills it runs throughout the year. >> i'll take it from there. thank you very much. across the gulf coast region,

weather american and officials have been preparing for the big one and what has happened in louisiana since katrina. >> we're hoping this is not a devastating storm. all preparations are being made by local and state officials. the president, fema, secretary of homeland security has sent us a much better fema than the one that showed up in katrina. we didn't wait until last week to start preparing. we've been preparing since katrina. >> the parish is beefed up since hurricane gu ststov. and michel claudet, are you ready? >> we're as ready as we can

requesting mandatory vaccineses on our parish and issued about 150 thousand bags. we're about as ready as we can be right now. >> what's your biggest fear? >> our biggest fear if it stays on top of us and continues to rain on us or stays offshore and continues to push water into our parish. the wind doesn't bother us on this one as much as the water. >> michel, i was looking in your local paper and noticed the shrimp and petroleum festival will go as planned this week. i don't mean to make light of it, if we will push it off a day or two, seems like many residents are not that concerned. is that the wrong way to think? >> you have to understand, this is not our first rodeo. we've been through this a million times and that festival is in morgan city to the west. we're right around it may be going shortly a little bit to

our east and the western side of the storm is always the best. they prepare for it all year and i'm expecting they want to have it. i suspect they'll probably be in good shape for it in mortgagan city. >> i was there for the flooding, which is hard to believe given the flooding you had this year, wise in morgan city. how will you prepare for the level of water? do you believe we will see a storm surge at a certain feet, and if so e, what are you estimating for the height of water? >> they're telling us 6-9 feet. 6 feet will not cause us a problem. if it gets toup to 9 feet, it certainly will. we have done a lot of investment in the levee districts and the inner parish drainage levees, gives us multiple lines of defense. we're not where we need to be but hoping we can ride this storm out and goes as quickly as

we can. >> what do you have in the way of pumps to pump out some of that water and are they up to it? >> you have to understand, i have 82 pump stations. we check them regularly and all checked and a few tanks topped off. we are as prepared as we can be. we pumped down the systems as far as we can to maintain levee stabilization and about ready to go. >> we understand at this time you are evacuating some residents. do they understand and comply and understand tsity of this? >> understand, we can't pull them out of the houses. we have declared an administer evacuation in lower parts of the parish and opened up a shelter for them. the majority of people have friends and relatives and rather than go to a shelter, they go with relatives instead of the shelter. most people comply.

again, this is not the first time they have been through that. >> i know you are some of the toughest people in america. you can handle it. be safe. take care. tulane university was hammered by katrina. now, the school's president will join us once again and tell us how his school and the entire community has changed. later on, they promised a big energy boost but is it a bunch of burnink? new york investigates what's in those energy drinks? [ male announcer ] it's a golden opportunity to experience the ultimate expression of power... control. [ engine revs ]

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for those in new orleans, the threat of hurricane isaac is a glaring reminder of katrina. your next guest was a leader in the recovery of new orleans after hurricane katrina's destruction. tulane university president's scott cowen will tell us about this lesson and how he is preparing students. thanks for joining us. i know it was a very emotional time the last time you talked to cnbc. what lessons have you learned and how has it made you better prepared this time around?

>> the most important thing is you prepare for every eventuality. everything that might happen you have to plan for. we have detailed contingency plans for every event regardless of the size or intensity of the storm. detail planning is critical. the second is really about communications. during the time of a storm like this or any disaster, people are anxious, just because of the event itself. it's actually critical you can communicate with them as often as you can. that helps alleviate some emotional distress and anxiety they're going through. the third thing is a very clear chain of command in a disaster like this. this is a time where you have to speak as one voice and you have to make sure all the members on the team are clear about what their roles and responsibilities are and that they're executed. i'd say those are the three major lessons we learned from

katrina we're certainly applying as we're about to face isaac. >> how many of your preparations were privately financed. after katrina you were waiting for the money for the reparations and after a year, nothing came from the government. you mobilized private enterprise to get things going. >> after katrina, we were able to garner sources from many sources. one was from private philanthropy. another students and tuition, and another freshman federal government and fema and believe it or not still seven years later, we're still trying to collect money from fema. there were various sources. the key was we didn't wait until someone came and i helped us, we were proactive developing plan to recover. that was key to our recovery. we didn't waste weeks and months hoping someone would come in and save us.

we decided to grab ahold of the situation to do what we had to to make sure we did renew and recover ourselves and that worked. >> are you worried, concerned for your students? >> the most important thing for the president of a university or head of any organization is the safety of the people in the organization. i am always concerned about safety. so, yes, as we approach isaac, i am concerned about the safety of all our people on the campuses. but i am comforted by the fact we have done detail planning, we have tested those plans, we have a wonderful experienced team on the ground here in new orleans, who are overseeing it. i think the students who are here at the university and the staff have been thoroughly briefed. i'm comfortable everybody knows what they're supposed to do and when they're supposed to do it. >> president cohen, good luck to you at tulane university. sure we'll talk to you again. batten down and be safe. talk to you again. latest news on oil refining

capacity out of the gulf region. you probably saw headlines. 93% of capacity is offline. let me do the math exactly what that means. according to the eia, energy departme department of administration, we refine refined last year and if you take 40%, that would be 7 million barrels in the gulf. take 93% of that, what you're talking about is 6.5 million barrels per day being taken offline out of a total u.s. refining capacity just under 18 million barrels a day. literally back of the note math i just did. 6 to 6.5 million barrels a day, oil up 50 cents but a couple

bucks lower than it was a few days ago. a lot of talk about will the strategic petroleum reserve get tapped? >> i know iea is dead against the strategic petroleum reserve being tapped and said high prices should not be a trigger for that, very strong words to the obama administration not to do that at this stage. >> remember, the world's biggest refining -- i don't want to call it plant, really a complex in the world in venezuela, exploded a few days ago. this is the biggest single total plant, numerous deaths. let's bring in mark. he has written about katrina, drought, gustof and co-write "path of destruction." he is a senior writer and he is joining us. thank you for joining us. i wish we could speak one time

on good things and how great the weather is in new orleans. let's promise to do that at some point. i looked at the cover of the times this morning, many people saying they will weather this out at home. is that a good idea? >> for this particular storm, yeah, because it is coming in as a category 1 hurricane, which is not horrendous. i will say my own family, my wife and grown kids did evacuate the area because they didn't want to get messed up in the widespread power outages likely to follow this. this is going to be a wind ev t event, rainfall event. the rainfall especially is going to be really problematical, now talking about 10-15 inches of rain over a 36 hour period throughout the area with locally amounts up to 20 inches or more. they extended a flashflood watch

through thursday. >> lack of power is a problem also for thepumps. do they have backup where if you lose power a few days, you can still pump out some of these levees? >> in the aftermath of hurricane katrina, diesel power or another alternative power source has been installed in the vast majority of the pumps, especially the city of new orleans itself. >> mark, the new orleans times, picayu picayune. thank you for joining us. still ahead, is the threat off isa off -- of isaac big enough for the president to tap the spr? right after this break, don't change the channel. polar e the earth's gravitational pull and hurtle us all into space.

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the dow is trying to avoid post ing posting a net loss in seven sessions. that trend of little movement is one that has taken hold in recent session. the s&p 500 is near break even right now. it could post its second straight session with a move at

less than a point and fall in about seven sessions. the nasdaq has been the standard and we're all waiting for jackson hole wyoming at the end of the week. back over to you, brian. >> mandy, thank you. the other big story of the day. the republican national convention is under way in florida and new jersey governor chris christie and ann romney are set to speak tonight. before we get to the issues, what is this we hear about a possible floor mutiny by the texas delegation? >> i was interested in your interview with the president from tulane. my daughter is there. i have a live update, they're watching forest gump in her dorm room. shelters in place, not evacuate, sounds like they will be okay. as for this floor revolt by the poll delegates, not going to

happen. the romney campaign backed down from a rules change that was designed to give more top down control over delegates. remember, the paul campaign was very active on the ground, grassroots efforts to try to build up his delegate totals. there was back and forth over whether that -- how appropriate that was. had some delegate disputes in maine and louisiana and other places. the romney campaign didn't want a stalemate on the floor. the paul campaign also wanted to avoid that. looks like it will be avoided. >> i'm glad to hear about your daughter. sounds like they feel safe, an odd movie to watch, given the shrimp scenes. i'm sure your daughter will do just fine but i do pray for her safety as well. and maybe the republicans would have to pull back a little bit. is this going to be, for the next few nights, a sffull steam ahead, aggressive republican

agenda pushing at the democrats? >> i think it will be absolutely right. they are going to continue watching. i had a briefing with romney campaign officials this afternoon and will be watching to see how bad the storm is. the level of devastation isaac wreaks on the gulfcoast may dictate tonal questions and how much of an observance or whether there is a pullback. i think as of now, they're not expecting the need to do that. i don't see it as a a great problem. people realize natural disasters happen and other stories go on at the same time. you will see ann romney paint a more in grashiating picture than americans may have at this time and why she loves him, a very positive thing and chris christie will talk about obama's failed economic policies and he has been able to get things done in a blue state, new jersey,

mitt romney could, too, if he was elected. >> thank you for the update and again, hope your daughter stays very safe. >> thank you. tonight, a special report featuring hurricane isaac and the republican national debate at 10:00 p.m. eastern. and we have an update coming up on hurricane isaac and how post katrina has been a good example of the good things big government can do. best selling author, douglas brinkley is with us. >> yes indeed. imagine this. your gas pedal is stuck on a busy highway and you are going 120 miles an hour. what would you do? how one driver finally stopped this nightmare ride. it has to be seen to be believed. i don't spend money on gasoline.

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about 30 minutes ago, the latest on hurricane isaac. >> the category 1 hurricane expect ed expected to hit new orleans hours after it hit the gulf coast seven years ago. >> there are big changes in the last couple of hours. first, now, we have a hurricane on our hands, as we have expected. secondly, the forward motion has increased. you can actually kind of see that right here, looking to the southeast of new orleans at what appears to be a developing eye. that is what is producing, of course, the strengthening of the storm as it comes together. it does seem like it's starting to speed up and means it won't have a chance to strengthen much more. previous storms that took this

trajectory were extremely dangerous. you can see some of them right here, including katrina. betsy in 1965, we have andrew. that was back in '92. they took a very similar path with a lot of devastation. here's the difference. those storms were category 3 storms. they were not weak like the current storm is. currently, we're looking at a category 1, which means the winds are only between 74 and 95 miles an hour. with that new motion, that new forward speed of 10 miles an hour, which puts it onto the louisiana costs line this evening, problably around 9:00 o midnight, the latest we expect it to be there, it won't have a chance to be a category 2. that's good news but we still expect that strong storm surge. that's something we saw in katrina as well. >> indeed it was. thank you very much for that. we will be interviewing katrina's historian, douglas brinkley. he is the best selling author of

"the great deluge." it will be interesting to hear his thoughts on lessons learned as isaac bears down on new orleans. stick around for that. finally, as hurricane isaac makes its way toward land, oil and gas prices have been all over the map this week. sharon epperson is with us from the nymex. we have the storm and venezuela probably under-reported given the storm but traders still can't seem to make up their mind about oil. why not? >> a lot of traders said we're waiting on the sidelines until we see this make landfall. todd just talked about the storm surge. that this is key when you talk about what happens to gas and oil prices as well. what happens to flooding at the refineries and power outages and how long we will see refineries shut down or at reduced rates. we could potentially see all 2.4 million barrels of capacity in the new orleans baton rouge area

shut down before this storm is over and it will take several days to ramp it back up. while prices are back down for gasoline, they could come back up. in terms of the oil price, we are seeing it a little bit higher but not too much different from friday's close. traders are waiting to see what happens. right now, the administration is not talking about an apr release, waiting to see what happens with the inventory report for oil anniversary and could have an impact on the crude price and one factor energy analysts and traders seem to be pretty firm on. it won't have much impact on natural gas. yes, we've seen about 67% of natural gas production in the gulf. there is plenty of natural gas in storage and frankly levels higher than we've seen for this time of the year. on the nat gas side, prices keep going lower. back to you. >> thank you. if oil prices were to really spike, at what point would the president, should the president use the strategic petroleum

reserve. with 32,000 votes on finance at yahoo!.com, 72% of you said only in an emergency. >> speaking of oil, what impact will hurricane isaac have on the shippers. let's ask greg lewis. good of you to join us. this is a sector if you look at the 5-year charts, rates have been cyclicly low, is there going to be a spike in rates because of this? >> yes. thank you and good afternoon. we have yet to see a pickup in rates due to isaac. what we have seen is some increased product cargo flows down to south america following the am way fire earlier this week. >> in terms of the actual shippers themselves, are there any in particular you expect to see more impacted than others and change your recommendation

on any? >> in the shipping markets, movements and rates tend to impact all shippers positively. any sort of delays we would see from potential of isaac accelerating and causing havoc, i think that would help shippers across the board. at this point, though, it's going to make landfall soon. we don't really expect to see any impact on shipping rates or the shipping stocks over the next few days. >> what will happen -- forget about the storm for a moment, some of these names, you look "frontline," they're down 90% over three years. is there a fundamental economic scenario on a mac row level for the these? >> we have seen a period of overbuilding that created too much capacity in the system. i think over time, that capacity will be whittled away. in thinking about stocks that play, it's important to focus on companies that will survive the current downturn and come out of

this market and have significant upside. a couple names we like to highlight, we think pnp is a name people might want to invest in. they have product exposure and crude exposure and hedging your bets one way or the other. >> thank you for that. i know put up the screen. overseas ship holding group down 91% the past five years. and 83%. unbelievable. >> goldman sachs upgraded "frontline" last week, and selling to a neutral after three years of pain. maybe the date is over. >> year-to-date, unbelievable gains. coming up next, call it the shop dressed man. >> and new york's nanny state. herb will get his monster on ahead. tdd#: 1-800-345-2550 you should've seen me today.

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ending some deductions. does that mean the mortgage tax deduction could be on the shopping block? if so, could that kill the housing recovery? are the rich being taxed enough? and a majority believe the upper class are not paying enough in taxes. shocking details coming up. you think your account on twitter is private. it may not be for long. a landmark court case could have major fallout for the social media industry. we look forward to seeing you at the top of the hour on "closing bell bell". >> the feeling is mutual, bill. look forward to seeing you as well. first, we have phillip on a rising beat. >> a lot of people buy iing tome hilfiger. it held up better than many

competitors. that stock has held up well, up 32% year-to-date. >> what's really interesting it upgraded its outlook for the third time this year and pinpoint europe. >> they wear underwear there, too. >> do they zplooncht apparently. >> not down on the south of france. nevada group is soaring up by 17%. luxury is alive and well. >> it is. it shows the two-tier economy. better than expected earnings. that stock is now up 94.5% year-to-date. luxury watch demand remains strong. >> like the watch indicator. remember earlier this week we talked about forces sill that forecast earnings above estimates. ticker asei getting a boost thanks to an analyst upgrade. slapping a $67 price tag on the name. they see another seven bucks of

upside here, a $37.4 million order with an unnamed customer. that will help the firm keep a steady revenue stream. >> we have seen action and debate with best buy with the founder buying stock. >> there was a form 4 filing in sec transaction filing, which came out today. a lot of hullabaloo made on the internet about this, is he selling stock? it looks to me because the proceeds are in the form of a promissory not going to a revokable trust, it looks to me just like an estate planning tax move by him and not a dumping of best buy. >> i don't read it as a significant. if he was selling the stock, that's a weird time. >> not a promissory note. >> it's our knee-jerk reaction to this one but our knee jerk is

more right than not. >> best buy was a vevorevok rev trust sale. various reports new york's attorney general is looking whether or not energy drink makers like this one are misleading customers, right? >> the "wall street journal" reporting subpoenas issued to pepsi, that makes amp, monster, and private living. >> monster itself not two weeks ago disclosed it received subpoenas from an unnamed state we know thanks to the wall street journal is new york. i have a piece going up on cnbc.com just about now, there is another part of the story had nothing to do with health. i was talking to beverage digest, the editor-in-chief, said his research shows the entire category is finally seeing a flattening in household

penetration, which, as you know, would mean it would start to fall over. any time you see an all in on any product, anything out there, if they're in a growth stock, you have to be paying attention to that because at some point that will have -- >> for the benefit of the viewers in terms of what the investigation is about, whether the companies stated the various exotic cocktail-like ingredients and underestimated or did not say enough about the potential caffeine. >> it gets to the issue of lab l labeli labeling. >> it covers a lot of different things. let's not forget dick durbin. >> the market doesn't care, only down 1%. >> it's already been clobbered. >> i know. come down from a monster drink high. >> they're not as much regulated as normal sodas. herb, you've also been digging into netflix.

>> it is interesting. you have the red box-rverizon deal, one of the many competing services. sub-10 is what it is expected to be. if you get dvds screaming from netflix, currently $16. here's the rub. last week in a blog, netflix quietly said they're changing billing for dvd and streaming. if you get either streaming or dvd, we'll give you one month free. >> i saw a blockbuster machine at dwayne reed in manhattan. this is competition galore. >> while this is occurring, remember one thing, as the company discloses in its 10q obligations for the cost off content are rising. the next year they owe $2 billion. they have another $2.5 billion due within 3-5 years. more to this story you need to pay attention to. >> it has been creeping back up

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every wants to avoid a repeat of katrina, but how different is the new orleans of today compared to 2005. joining us is doug brinkly, the author of "the great deluge." how different is it now from then? >> it's a much safer city in many regards. there have been a lot of hurricane evacuation roots. residents did not come back. they do not come back and it's a smaller city. it's leadership with mitch as mayor, and a police force that's fastly improved. if you remember last night the policeman had looters, and the levies have been fixed.

did the new system work, but the piece not fixed is the disappearing louisiana wetlands that used to be the buffer for new orleans. you had barrier islands that would take the hurricane blow, and the wetlands were like a sponge that would stop that surge from pounding on the flood gates. i'm afraid we have not done much in the way of wetlands restoration. >> we were shchatting earlier, d we were talking about the drought, and when the ground is hard it doesn't absorb the same or flow assay. we know with the drought, and the ground, and the way the water will disperse, do we know what it will do. >> yes, the ground will not be able to absorb, and it's the

death of the wetlands. louisiana is still on a lot of 1950s bad engineering. you asked about katrina in 2005, and what is now closed is the mississippi river gulf outlet. it was like a funnel effect. it connected the salt water gulf to the presh water mississippi, and it had a devastating effect. the hurricane pulled up and pushed all of that water over the levees. the river itself has been channelized and the wetlands are not nourished, it means you have a natural environment to absorb this amount of rain that's coming. so you will find the streets of new orleans i'm afraid terribly flooded. the good news is that the cities will recover quicker than last time. >> it's just a one, not a three or a four.

>> what is not being adequately prepared that could have been given the experience and the time. >> i think the city is pretty well prepared, but they don't really have the hospitals in the shape they want. as soons as the electricity goes off, people who need life enhancing machines for asthma, they're going to be a grim problem because of 90 degree heat, and life gets tough, and it's unclear if the police force is ready to deal with the crime. >> thank you, doug, for your insights, joining us there from houston. >> it's also a street in new york. >> i would mispronounce melbourne. coming up next, a horror ride on the highway. this country was built by working people. the economy needs manufacturing.

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i'm going 80 or 90 miles per hour, and i'm scared to death. >> the accelerator on her suv got stuck. she was for nearly 35 minutes. she stopped the suv, and