Baltic Dry Index. 1040 -02
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“Every day, in every way, I'm getting better and better"
The Talking
Chair, with apologies to Emile Coue.
For news on when hell freezes over, or at least that part
known as the EUSSR, scroll down to Crooks Corner. Winter 2014-2015 looks interesting. My smart
phone tells me this morning that we got down to 39 F overnight. And it’s only
the 20th of August. More geese flew in on Sunday too. What could
possibly go wrong?
We open with more news on the Great China Wobble.
But don’t let on to our global stock markets, now dead certain that at the Fed’s
Jackson Hole junket, “the talking chair, et al,” will announce new schemes on
how to keep the Fed’s final bubble inflating forever. China’s statistics get
more dubious by the day.
Bank of China Doubles Money for Bad Loans as Growth Slows
Aug 20, 2014 3:09 AM GMT
Bank of
China Ltd. more than doubled its money set aside for bad loans as profit
growth cooled to the slowest pace in five quarters on weakness in the economy. Provisions for potential soured debt climbed to 12.7 billion yuan ($2.1 billion) in the second quarter, up 116 percent from a year earlier, based on half-year figures released by the Beijing-based company yesterday. Net income rose 8.5 percent to 44.4 billion yuan, the earnings statement showed.
The nonperforming loans of China’s fourth-largest bank surged to 85.9 billion yuan, the highest in more than five years, as companies struggled with repayments in an economy at risk of the weakest full-year growth since 1990. The nation’s lenders are already trading at the cheapest price-to-earnings valuations of global banks.
“The biggest concern for Bank of China is their asset quality,” Chen Xingyu, a Shanghai-based analyst at Phillip Securities Research, said by phone. “The trend is very obvious. We expect nonperforming loans to continue rising in the next two quarters.”
----At a briefing in Beijing, President Chen Siqing said the company had stepped up efforts to dispose of bad credit, adding that the economy faced downward pressure in the second half of the year. Gross domestic product may expand 7.4 percent this year, a Bloomberg survey shows.
More
Staying with Asia, anything America can do, China can
and will do to. Below, China copies America and starts throwing its weight
around. After roughing up European and American firms, it’s now old enemy Japan’s
turn apparently. Today is not like
yesterday anymore, and tomorrow, won’t be like today either, all the more so if
China enters a hard landing, suicidal EU sanctions on Russia send Club Med into
meltdown, or if the Fed’s talking chair, isn’t getting better and better every
day.
China slaps Japan companies with record antitrust fine
Published: Aug 20, 2014 1:04 a.m. ET
HONG KONG (MarketWatch) — China has issued a dozen Japanese companies with
the largest antitrust fine in recent history, the state’s top regulator said
Wednesday, though it decided to give two of the offenders a pass.The 10 of the companies — all auto parts or ball-bearing manufacturers — were fined a total of $1.235 billion ($200 million) for monopolistic price-fixing in China markets, making it the largest anti-monopoly fine since China implemented its antitrust laws in 2008, according to state-run broadcaster CCTV.
Eight of the Japanese entities were auto parts suppliers, and were fined a combined total of 832 million yuan, with the initial list included Hitachi Ltd. 6501, -0.98% HTHIF, -0.13% Sumitomo Corp. 8053, -0.52% SSUMF, +2.26% Denso Corp. 6902, -0.99% DNZOF, +0.66% and Mitsubishi Electric Corp. 6503, -0.30% MIELF, +0.76%
According to the National Development and Reform Commission, the nation’s top economic planner, the manufacturers unfairly set prices for auto parts from 2000 to 2010.
----However, it added that Hitachi would be exempted from any financial penalties, as it voluntarily admitted to the offenses and provided important evidence against the other companies.
The other four fined firms were ball-bearing manufacturers — specifically NSK Ltd. 6471, +0.36% NPSKF, +24.17% NTN Ltd. 6472, +0.68% JTEKT Corp. 6473, +1.20% JTEKF, +24.21% and Nachi-Fujikoshi Corp. 6474, +0.14% — which raised the prices of ball bearings sold in China between 2000 and 2011, the NDRC statement said.
However, Nachi-Fujikoshi was, like Hitachi, exempted from the fines for also coming clean and offering details of the price-fixing.
More
In other Asian news, Mongolia is returning to the
fold. Better the devil we know, rather than those fiendish Anglo-American devils.
Following the botched Obama coup in Kiev, our world seems to be polarising into
two Cold War camps.
Mongolia Seeks Economic Lifeline With Pivot to China, Russia
Aug 20,
2014 4:55 AM GMT
After two decades courting Western investors and political allies, Mongolia
is refocusing on foreign ties closer to home seeking to revive its economy. China’s President Xi Jinping is scheduled to arrive tomorrow in the country landlocked between his nation and Russia, as Mongolia’s economic woes mount. Growth is the weakest in four years, foreign investment has plummeted, inflation is rising and the currency has plunged to a record low.
Xi’s trip to the mineral-rich nation, the first by a Chinese president in 11 years, comes ahead of the expected visit of Russian President Vladimir Putin about two weeks later. As analysts anticipate deals or negotiations from energy to infrastructure, the visits signal a pivot to Russia and China as a prolonged spat with Rio Tinto Group over Mongolia’s biggest ever investment has cooled foreign interest in the nation.
“The timing is critical,” said Peter Morrow, partner at NovaTerra LLC, which advises on projects including energy, from Ulaanbaatar. “Both China and Russia are keenly interested in Mongolia’s resources, and both know that the country is going through a rough economic patch.”
Since breaking free from Soviet influence and becoming a democracy in 1990, Mongolia -- with an estimated $1.3 trillion of natural resources -- has tried to counter the leverage of Russia and China by seeking ties with so-called “third-neighbors” including the U.S. It has sought to woo investors including Peabody Energy Corp., Anglo American Plc and South Korea’s Samsung Engineering Co.
The nation is turning to China, its biggest trading partner, and Russia after foreign investment collapsed 70 percent in the first-half. Investment plunged amid an already 18-month dispute with key investor Rio Tinto and after Mongolia passed more nationalist-minded investment laws in 2012, that were later reversed.
“Everyone is dealing with China,” Mongolia’s vice minister for mining Erdenebulgan Oyun said last month in an interview. Among potential deals expected to be signed during the Chinese leader’s visit is a gas project and supply accord with China Petrochemical Corp., known as Sinopec Group, according to Erdenebulgan.
----China’s thirst for power and alternatives to burning its own coal because of environmental concerns, make Mongolia and its vast reserves of the fuel a logical replacement, Chuluunbat Ochirbat, Mongolia’s Vice Minister for Economic Development, said July 23. The $400 billion natural gas supply deal Russia signed with China in May also offers Mongolia a chance to collect fees from transit pipelines, he said. Russia’s Putin is expected to visit the nation in early September, Chuluunbat said last month. A date for Putin’s visit hasn’t yet been set, according to the Ministry of Foreign Affairs in Ulaanbaatar.
More
Elsewhere, more fallout from the insane coup in
Kiev.
Carlsberg Cuts Full-Year Profit Outlook Amid Russia Woes
Aug 20,
2014 6:39 AM GMT
Carlsberg
A/S (CARLB), Russia’s
biggest brewer, cut its full-year earnings outlook amid mounting economic
difficulties in eastern Europe. Operating profit will rise at a low- to mid-single-digit pace on a so-called organic basis, the Copenhagen-based company said in a statement today, less than its previous guidance for high-single digit percentage growth. The brewer also reduced its outlook for reported operating profit and net income.
“Due to the recent macro events the consumer sentiment and the outlook for some of the economies in eastern Europe are becoming increasingly challenging and uncertain,” Carlsberg said. “Consequently, we believe that the beer category will deteriorate further in the second half of the year. In addition, we expect considerably less stocking among distributors in Russia.”
----Carlsberg said it expects a high single-digit percentage decline in the Russian beer market this year, worse than its previous prediction for a mid single-digit drop. For western Europe, the brewer sees unchanged or slightly declining beer markets, compared with the slight decline anticipated before.
More
Two thousand scientists, in a hundred countries,
engaged in the most elaborate, well organized scientific collaboration in the
history of humankind, have produced long-since a consensus that we will face a
string of terrible catastrophes unless we act to prepare ourselves and deal
with the underlying causes of global warming.
Al Gore, Sept. 9, 2005.
If the facts don't fit the theory, change the facts.
Albert Einstein.
Albert Einstein.
At the Comex silver depositories Tuesday final figures were: Registered 59.93 Moz,
Eligible 116.23 Moz, Total 176.16 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Thinking of jetting off for a late summer vacation
on the Costa del Sol? Better buy a return train and ferry ticket as insurance.
Iceland’s gearing up to repeat 2010. If blowback from Russian sanctions doesn’t
do in Europe, a severe cold winter lacking Russian gas will. Not to worry
though, no one in Washington’s War Party will be affected by a collapse of
continental Europe. Are botched coups great or what? I wonder what the talking
chair thinks?
''If you fly into the ash and your engines stop, you crash.''
Peter Purcell, of the Natural Environment Research Council.
16/4/10.
Iceland Prepares for Volcanic Eruption as Tremors Persist
Aug 19,
2014 12:16 PM GMT
Iceland’s Civil Protection Agency has registered hundreds of earthquakes
since midnight yesterday at the site of one of its biggest volcanoes as the
island braces itself for a possible eruption. “There is a very strong indication of magma movement east of Bardarbunga caldera,” the Reykjavik-based agency said in a statement late yesterday. Around 800 earthquakes have been observed in the area since midnight Aug. 18, with the strongest one measuring 4.5 on the Richter scale, the agency said.
The Bardarbunga volcano is 25 kilometers (15.5 miles) wide and rises about 1,900 meters above sea level. It last erupted in 1996 and can spew both ash and molten lava. The volcano lies beneath Vatnajokull, Europe’s largest glacier. Roads to and from the area have been closed off and Iceland’s police commissioner has met with Prime Minister Sigmundur Gunnlaugsson and other government ministers to go over the risks, the agency said.
Ash from Iceland’s Grimsvotn volcano forced flight cancellations in Scotland, northern England and Germany in May 2011. An eruption of the Eyjafjallajokull volcano in April 2010 caused the cancellation of more than 100,000 flights on concern glass-like particles formed from lava might melt in aircraft engines and clog turbines.
Iceland’s Met Office yesterday raised the alert level at Bardarbunga to “orange,” indicating “heightened or escalating unrest with increased potential of eruption.” The agency continues to note that there are still no visible indications of an eruption. The closest town to the volcano is Husavik in the island’s north, with about 2,200 inhabitants, according to the Icelandic Road and Coastal Administration.
“The seismic activity around Bardarbunga is still considerable,” the Met Office said today in a statement on its website. “It slowed a little around midnight but increased again around 04:00 and has now slowed again a little. The activity therefore comes in waves.”
European Gas Reverses Biggest Drop Since 2009 on Ukraine
Aug 20, 2014 6:08 AM GMT
European natural gas prices are reversing their biggest slump in five years
as concern mounts that tension between Russia and Ukraine will again disrupt
flows to the region. Gas for next-month delivery in the U.K. rallied 21 percent over the past six weeks as Ukraine said it may ban OAO Gazprom, Europe’s biggest supplier, from shipping the fuel across its territory because of Russia’s support of separatists. The Moscow-based company, which meets 15 percent of European gas demand through Soviet-era pipelines across Ukraine, halted supplies to its neighbor on June 16 in a debt and price dispute.
Gas storage in Ukraine is less than half full and the nation began this month to limit domestic use to conserve fuel. U.K. prices, the regional benchmark, fell to their lowest since 2010 last month after a mild winter left storage sites across the 28-nation European Union at their fullest for this time of year since 2008. Wholesale costs next quarter will be 11 percent higher than what companies are paying for that period now, according to a forecast by Societe Generale SA in Paris.
“The continued threat of gas transit interruption is putting upside risk into gas prices,” Nick Eagle, director of sales and trading at Clean Energy Trading Ltd. in London, said yesterday by e-mail. “While there’s no denying European gas storage levels are in a very healthy position, there would be significantly more concern if any disruption was to occur during the winter period.
U.K. gas for next-month delivery has gained 7.4 pence since falling to a four-year low on July 8 to close yesterday at 42.65 pence a therm ($7.10 a million British thermal units), according to broker data compiled by Bloomberg. The front-month price is the lowest for this time of year since 2010.
Gas flows to Europe were interrupted for 13 days during freezing weather in January 2009 in a similar dispute between Russia and Ukraine. Gas for same-day delivery surged as much as 27 percent the day before the stoppage.
In Ukraine, Kiev’s biggest utility restricted Eka Beradze-Fokina’s hot water to save gas, leaving her to use an electric immersion coil and a pot to prepare her 3-month-old son’s bath.
Beradze-Fokina, 35, lives in one of 8,856 residential buildings affected after utility PAT Kyivenergo, which supplies 75 percent of Kiev’s heating and all its power, cut hot water to 57 percent of its customers.
The limits may last through the end of September, Kiev Mayor Vitali Klitschko said Aug. 4.
More
"The most puzzling development in politics during the last decade is the apparent determination of Western European leaders to re-create the Soviet Union in Western Europe."
Mikhail Gorbachev
The monthly Coppock Indicators finished July.
DJIA: +157 Down. NASDAQ: +318 Down. SP500: +232 Down. The Fed’s final bubble has taken on a
very scary wobble, but this is nothing compared to the return of real interest
rates at some point ahead.
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