Friday 28 March 2014

Europe Saved Again - By Spain!!!



Baltic Dry Index. 1412 -84

LIR Gold Target in 2019: $30,000.  Revised due to QE programs.

Isn’t Manual Labour a Spanish waiter? And Hertz van Rental a Dutch artist?

Anon. How to get kicked out of the EU.

We’re saved! Saved once again! Saved by those devilishly clever Iberian oilmen, the “European Texans” with the European “Californian coast.” Champagne corks were popping all across Euroland on Wednesday, when man-made global warming, looney leftist,  UK Guardian newspaper, reported that newly discovered oil off Spain might generate 250,000 jobs by 2065. Reporting on the manna from heaven report published by auditor Deloitte, the Guardian gushed that Spain could become a gas exporter, just like President Putin’s doghouse Russia, though we might have to wait until 2031. By then, if it’s God’s will, I will be 81 or 82, and unlikely to care much if Spain replaces Russia in holding the EUSSR to ransom.

Below, the news that stopped President Putin dead in his tracks, Wednesday. Now will he give back the Crimea and swear fealty to Washington and its King Barry Obama the Good, and his bag carrying, Pantomime underboss, U-turn Cameron the Bad?

Q: How many Spaniards does it take to change a light bulb.
A: Just Juan

Spain's oil deposits and fracking sites trigger energy gold rush
Major offshore oil discoveries and prospects for shale gas extraction are generating excitement – and resistance

Wednesday 26 March 2014 16.02 GMT

Spain is already the world's largest olive oil producer but now it's looking to a very different kind of oil to pull it out of economic decline: petroleum.

The discovery of two significant offshore deposits, and prospects for fracking in many areas, have triggered a black-gold rush, with demand for exploration permits up 35% since 2012.

A report published this week by Deloitte says the oil industry could create 250,000 jobs and constitute 4.3% of GDP by 2065. The report is based on an estimate of 2bn barrels of oil and 2.5bn cubic metres of gas.

The oil companies estimate that the deposits in a series of oilfields off the Canaries, the latest of which was confirmed last week, amount to 500m barrels of crude.

Deloitte predicts that Spain could become a gas exporter by 2031 while producing 20% of the oil it consumes.

With 6 million people unemployed and an economy that shows only feeble signs of recovery, the Spanish government seems ready to brush aside environmental concerns and give the green light to the oil companies.
These are led by the Aberdeen-based oil and gas exploration company Cairn Energy and the Anglo-Turkish firm Genel Energy, headed by the former BP boss Tony Hayward. So far, 70 licences have been granted to explore both shale gas and conventional resources.

The main offshore deposits lie between Lanzarote, in the Canary Islands, and Morocco, and in the Bay of Valencia, close to Ibiza. As both the Canaries and Ibiza are places of great natural beauty whose principal industry is tourism, there is intense opposition to the plans.

Opposition is so fierce in Ibiza that the Eivissa diu no (Ibiza says no) movement has succeeded in creating a united front across the entire political spectrum, taking in environmental groups and hoteliers, and has won the support of celebrities such as Kate Moss, Sienna Miller, Fatboy Slim and Paris Hilton, who wrote on Instagram: "Don't let them ruin one of the most beautiful islands in the world." The record producer and rapper Puff Daddy described the plans as "a disaster on every level".

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Next up, Japan. Does history repeat? On Tuesday next, Japan is about to find out when their sales tax jumps from 5 percent to 8 percent. One last weekend of manic shopping ahead to beat the coming sales tax hike.

March 28, 2014, 2:01 a.m. EDT

Japan steps off the tax cliff Tuesday — Can it survive?

LOS ANGELES (MarketWatch) — The year was 1996. Japan had gone from a rising economic superpower to a nation in decline, mired in what would be known as “The Lost Decade.”

And yet a recovery seemed just around the corner, as most economic indicators were popping back up to levels last seen during the heyday of the 1980s boom.

The late Ryutaro Hashimoto was prime minister at the time, and with an eye to shoring up Japan’s finances, he decided to raise the consumption tax — a sort of national sales tax that covers almost all goods and services — by two percentage points to 5% at the start of the new fiscal year in April 1997.

The result was unmitigated recession, dashing any hope that Japan would quickly return to its rapid growth of the previous decade. And while some of this was likely due to the Asian financial crisis that broke out several months later, the tax hike has taken much of the blame. Until recently, the idea of another consumption-tax increase was inextricably linked to the idea of economic retreat.

Unfortunately, Japan is also facing a huge public-debt load, at around 225% of annual GDP in 2013. Also, the nation could really use a corporate-tax cut — the Nikkei Asian Review cites data showing Japan’s effective corporate-tax rate is well above that in the U.S., U.K. and France, and is more than double what Germany charges.

To cut the debt and to pay for a possible easing of the corporate tax at some point down the road, Prime Minister Shinzo Abe is set to raise the consumption tax for the second time in Japanese history.

And not just one hike either: While the rate will go to 8% from its current 5% on Tuesday, the government is planning another hike to 10% in October 2015 if all goes well with the April increase.

But will Japan’s economy survive the shock?
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While we wait for Spain’s “Texans” to get on with saving the EUSSR and the world with a new era of cheap oil and gas by 2065, we close for the week noticing that America is about to run out of soybeans, thanks to rising demand for pork in China, while this year’s Spring planting season in America looks likely to get off to less than a stellar start in much of the northern grain belt. Not to worry though, we can always rely on the Ukraine, Brazil, and Argentina for wheat and soybeans, right? Plus QE Forever and ZIRP to put meat and potatoes on our plates, a chicken in every pot.

Below, a food inflation crisis is brewing. Will McDonald’s have to put steak on the menu?

“He [your candidate here]  had just about enough intelligence to open his mouth when he wanted to eat, but certainly no more.”

With apologies to P. G. Wodehouse.

Chinese Pigs Eating Soybeans Cut U.S. Supply to 1965 Low

By Jeff Wilson Mar 27, 2014 2:49 AM GMT
In the 60 years that Ursa Farmers Cooperative has been loading Midwest soybeans onto boats along the Mississippi River, business has never been this good.

Barge convoys are heading south along the world’s busiest inland waterway to New Orleans export depots at a record pace as demand surges from pig farmers in China, the largest pork-eating country. Soy stockpiles in the U.S., where farmers harvested the third-largest crop ever just six months ago, are the lowest relative to demand in at least five decades, fueling the second-biggest rally in prices to start the year since 2005.

“Our soybean supplies will be empty by the end of April,” said Scott Meyer, grain department manager at the Ursa, Illinois-based terminal owner, which loads about 35 million bushels of crops annually. “Chinese demand for soybeans was a lot stronger than everyone expected this year.”

---- Stockpiles of soybeans on March 1 probably dropped to 987 million bushels (26.9 million metric tons), the smallest for this time of year in a decade, according to the average of 30 analyst estimates compiled by Bloomberg. Reserves will be equal to 30 percent of estimated annual use and exports of 3.319 billion bushels, the lowest ratio for this time of year since at least 1965, U.S. Department of Agriculture data show.
The agency will update its quarterly crop-inventory estimates on March 31.

Since Sept. 1, shipments of U.S. soybeans jumped to 39.7 million tons, up 22 percent from a year earlier and almost reaching the government forecast for 41.64 million tons for the entire 12 months ending Aug. 31, according to the USDA. Two thirds of those shipments ended up in China, the biggest buyer, with exports reaching 26.494 million tons, topping the previous record of 24.464 million tons three years earlier.

Pork production has surged 38 percent in China since 2000, now accounting for more than half of global output, as the nation’s expanding economy boosted incomes and people were able to afford to eat more protein. To feed the world’s largest hog herd, livestock producers import U.S. soybeans that were as much as $7 a bushel cheaper than Chinese supplies in January, based on cash prices in the Gulf of Mexico.

“Chinese demand for U.S. beans was so strong, so early that it simply depleted supply,” said Randy Mittelstaedt, the director of research for R.J. O’Brien & Associates in Chicago. Compounding the inventory drain was better-than-expected demand from Europe, hoarding of supply by Argentine farmers and a smaller crop in India, he said.

---- The outlook for Brazil’s crop has been reduced after hot, dry weather in the east and too much rain in the central growing region in February. After predicting a 90 million-ton harvest in February, Brazil’s government forecaster, Conab, said March 12 output will be 85.4 million.

Farmers in Argentina, the biggest shipper of soybean meal and soybean oil, withheld supplies until last month, waiting for a devaluation of the peso against the dollar. Many store soybeans to hedge against inflation as they are paid in pesos at a dollar value by exporters and processors. Chicago soybean-meal futures are up 13 percent this year.
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Corn, soybeans look to extend gains as weather threatens planting season

March 26, 2014, 12:44 PM
AccuWeather.com predicts that lingering effects of the winter will cause planting delays. That may mean further price gains for corn and soybeans, which are already among the bigger gainers in the commodities market — up around 12% each this year.

“While the South will be right on schedule weather-wise for prime planting with looming frost concerns, delays will become more and more likely with every mile heading north,” AccuWeather said in its Spring 2014 Planting Forecast report issued Wednesday.

“Damp soil leftover from winter, melting snow and lagging temperatures mean a lot of places are going to have a slow planting period across the Midwest, northern Plains and the Great Lakes,” AccuWeather Senior Meteorologist Dale Mohler said.

With corn CK4 -0.26% and soybeans SK4 -0.21% being the largest crops in the Midwest and the Plains, which are planted typically in April and May, one of the most influential factors in when to plant is soil temperature, and “soil temperatures must be warm enough to support whatever crop you are planting,” Mohler said. For corn that’s 50 degrees Fahrenheit or above and for soybeans it’s 54 degrees Fahrenheit or above, he said.

But after the harsh, record-breaking cold and snow, meteorologists are concerned that with the ground still frozen in the Ohio Valley and Upper Midwest, it may take longer for the frost to thaw out of the ground and that could keep soil temperatures lower longer, AccuWeather said.

This spring is also the second in a row with a severe drought for western Texas through central California and that’ll take a toll on the planting season too, the weather forecasting service said.

“This time last year farmers were already in the field,” said Mitch Kasper, managing principal with Midwest AG Investors, but in the Midwest, “with cold weather this week, and 20-30 inches of frost in most areas, we are in danger for a very late planting.”

“The root systems need time to mature before the hot summer weather hits,” he said. “Late planting makes the plants much more likely to be damaged later in the season.

March 27, 2014, 9:18 a.m. EDT

10 things steakhouses won’t tell you

These days, it’s distressingly rare to get a meal that’s well done

Got beef? Despite the sluggish economy and warnings about the health consequences of eating too much red meat, steakhouses have more than held their own in recent years. For 2014, sales in the premium steak-restaurant category are projected to grow 3.2%, compared with 2% for the broader full-service chain-restaurant category, according to market researcher IBISWorld. Moreover, some steakhouse chains have been in expansion mode: Since the mid ’90s, the Capital Grille, which is part of the Darden DRI -1.22%   family of restaurants, has gone from just a handful of locations in the Northeast to more than 50 spread across 20-plus states.

The problem with all this growth? There are concerns there may not be enough quality beef to go around, given that the best steakhouses typically serve USDA-graded prime, which accounts for just 3% of the total supply in the country. What’s more, the boom undermines the idea of steakhouses as unique destinations for special occasions. “It’s a sea of sameness,” says Mat Mandeltort, a veteran restaurant professional who’s a manager with Eby-Brown, an Illinois-based food-service company.
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March 18, 2014, 9:38 a.m. EDT

Tomorrow’s hamburger may cost as much as today’s steak

Beef prices expected to rise through 2016

Beef: It’s what you can’t afford for dinner — for years to come.
Retail beef prices have climbed once again. From January to February, the prices that consumers paid for meat, poultry fish and egg climbed 1.2% (and over the past 12 months, 4%), according to government data ; that’s compared with 0.4% (and 1.4%) for food overall. The data shows that urban consumers paid an average of nearly $3.56 per pound for 100% ground beef.

What’s more, experts say that climbing beef prices are here to stay. The USDA’s Economic Research Service projects that beef prices will rise faster than almost anything else this year. Don Close, a cattle economist with Rabo AgriFinance says he thinks prices this year could rise 7% to 8% and roughly the same amount in 2015. Kevin Good, a senior analyst at cattle research firm CattleFax, says that “higher prices will continue through 2015 or 2016.”

Good says that ground beef may see especially steep price hikes. He thinks that while steak retail prices could climb 5% to 10% in 2014, ground beef could climb 10% to 15%.

So what’s with the sky-high beef prices? The bigger beef bills have been partially due to the fact that the cattle herd in the U.S. — the largest beef producer in the world — fell to an estimated 63-year low, according to a Bloomberg survey.
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Where's the Beef


At the Comex silver depositories Thursday final figures were: Registered 53.18 Moz, Eligible 127.66 Moz, Total 180.84 Moz.  

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

As Great Britain stumbles and bumbles its way towards a Scottish independence referendum later this September, they should have called in Vlad the Bad to organise one of the instant ones, we present a poem from the history of the Irish Home Rule debacle of the 1880s.

It is never difficult to distinguish between a Scotsman with a grievance and a ray of sunshine.

P. G.Wodehouse.

United Kingdom they fancied wouldn't do.
To please some grumbling Irishmen they split it in two.
Two little kingdoms, but then the Scots, you see,
Claimed their ancient throne and rights, then there were three.
Three little kingdoms but then one more,
For Welshmen claimed a Parliament and then there were four.
Four little kingdoms wouldn't do it all!
One of them was too big; the others were too small.'
And this is the price we'll pay
Take a lesson from your history.
'Divide and conquer is the game we play.'
And this is the price we'll pay.
'All across Great Britain ancient hates revived.
Cornwall wants to rule herself, and then there were five.
Five little kingdoms, but London in a fix,
Raised the 'Southern English' flag and then there were six.

Miss J E Clarke of Eynsham - A poem in Judy Magazine for Girls 28 August 1889.

Right now the yes campaign is still stuck in the 30 percents. Sounds to me like Scotland’s “Wee Eck” needs to call in Russia’s Vlad.

“Say what you will, there is something fine about our old aristocracy. I'll bet Trotsky couldn't hit a moving secretary with an egg on a dark night.”

 P.G. Wodehouse.

Have a great Spring weekend everyone. In the UK it’s time to move the clocks round the house.

The monthly Coppock Indicators finished February.

DJIA: +203 Up. NASDAQ: +353 Up. SP500: +255 Up. The new Fed bubble continues, what could possibly go wrong?

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