Comments on: "Asia diesel market seen going from bad to worse"

By: Anonymous

Anonymous — Fri, 20 Feb 2009 01:19:00 +0000

As an unhappy realtor I just want to state for the record that I cannot WAIT till we colonize Mars and I can once again be pocketing millions in commision from the sale of shodily constructed and sometimes leaky dirt shacks upon the Martian Surface.

Oh how I pine for the good times again!

I just HOPE I live to see that day...the day when we shall colonize Mars as I have always hoped and dreamed we would..yes I know we shall. We shall. I know it.

Sigh.

By: Yves Smith

Yves Smith — Thu, 19 Feb 2009 08:05:00 +0000

Anders,

Thanks. Have fixed the post.

By: Anders

Anders — Thu, 19 Feb 2009 07:54:00 +0000

Typo:
which ma lead to dumping

Should be:
which may lead to dumping

Thanks for the informative posts!

By: Anonymous

Anonymous — Thu, 19 Feb 2009 02:42:00 +0000

Gearing down. Demand appears certain to drop for the next six months barring a miraculous change. The NYT reports that Mr. Aso, currently at 9% popularity, will visit the Obama White House in two weeks. As jumpy as everyone is now, the election of Mr. Ozawa seems not just possible, but likely. Why exactly Mr. Aso has been selected for this honor is not clear. The prospect of ballooning un-employment figures in China and Japan has been mentioned elsewhere. The sense of dread, even in Tokyo, is palpable.

By: Gentlemutt

Gentlemutt — Thu, 19 Feb 2009 02:07:00 +0000

Hi Yves, as recently as the summer of 2008 shipping company tankers/cargo ships were gliding into Chinese ports running on fumes, sometimes literally. This was because the Chinese state-owned oil companies were required by law to sell all products, including bunker fuel, at below-market prices as part of the macroeconomic management of the Middle Earth economy.

So, until international trade hit the wall in Q4 2008, global shipping companies were 'gassing-up' at ridiculously low subsidized prices as they picked up equally low-price cargo for WalMart in China. This phenomenon was known and well understood in Beijing.

It may well be that recent abrupt changes in supply/demand alone are responsible for what is observed in the story to which you link, but it may also be that foreign oil buyers --- quite marginal in the scheme of things on the mainland --- are reporting what they enjoy seeing on the fringes of what is still, in some key parts, a command economy.

So, no argument that supply may exceed demand for diesel etc in China at present. Just pointing out that global shipping companies should not expect such a rich subsidy next time round. Cheers.

By: Anonymous

Anonymous — Thu, 19 Feb 2009 02:02:00 +0000

Greenspan backs bank nationalisation
http://www.ft.com/cms/s/0/e310cbf6-fd4e-11dd-a103-000077b07658.html

“‘It may be necessary to temporarily nationalise some banks in order to facilitate a swift and orderly restructuring,’ he said. ‘I understand that once in a hundred years this is what you do.’

Mr Greenspan’s comments capped a frenetic day in which policymakers across the political spectrum appeared to be moving towards accepting some form of bank nationalisation.

‘We should be focusing on what works,’ Lindsey Graham, a Republican senator from South Carolina, told the FT. ‘We cannot keep pouring good money after bad.’ He added, ‘If nationalisation is what works, then we should do it.’

Speaking to the FT ahead of a speech to the Economic Club of New York on Tuesday, Mr Greenspan said that ‘in some cases, the least bad solution is for the government to take temporary control’ of troubled banks either through the Federal Deposit Insurance Corporation or some other mechanism.

By: Anonymous Monetarist

Anonymous Monetarist — Thu, 19 Feb 2009 01:05:00 +0000

More anecdotal evidence that China is contracting regardless of reported GDP.

By: Justin

Justin — Thu, 19 Feb 2009 00:38:00 +0000

I visit Japan and Taiwan every year (unfortunately not mainland China). Their economies are hurting badly, but both have government reserves kicking in for projects that are at least keeping some demand in commodities.

I am long term bullish on oil even while I see deflationary pressure could drive it lower.

The last two years have been a real birth of ETFs for all sorts of positions. People realize the value of being able to trade in and out quickly of given macro economic trend.

Oil (as energy) also has that property. It can be used interchangeably for fertilizer production, plastics, as energy to drill for gold or other metals, and for transportation.

I don't know which sector will rise up first from the recession, but I believe that oil will probably be used as the engine to drive that sector forward.