Famed hedge fund investor and round-the-world motorbiker Jim Rogers is not very keen about financial assets these days, which is not entirely surprising given that he runs a commodities fund. Maybe the bearish outlook has to do with the view of the world from Singapore. Marc Faber, who makes most of his TV appearances from […]
Read more...We had pointed out that usage of oil had dropped over 10% during the first oil shock. While the price hike itself led directly to conservation, and this time we have an easing price environment, global economic conditions were not as difficult as today’s. From Bloomberg: Crude oil fell below $59 a barrel in New […]
Read more...The dreary forecast comes from Eric Fishwick, chief economist at CLSA, an Asia-focused private equity firm. His reports in particular contends that the Chinese cannot possibly meet its growth projections for next year. One does not cross the officialdom in China casually. That suggests that either 1) CLSA is quite confident they won’t be making […]
Read more...Restricted credit and access to foreign exchange may lead farmers to cut production, worsening agricultural price pressures. From the Financial Times: The world might face a repeat of this year’s food crisis as the credit crunch encroaches on the agricultural market, leading farmers to cut their planting because of falling prices and lack of finance […]
Read more...We managed to miss this story on China’s diesel imports sent to us by reader Michael. When oil prices rose so rapidly early in the year, many pointed to robust growth in demand from China, and expected that level of growth to continue. Skeptics like your contrarian blogger pointed out other factors could be at […]
Read more...Note that Credit Suisse has lowered its price projections to $60 for 2009. The main reason for the lower price expectation is much worse than consensus forecasts for GDP growth, and with it, increases in oil and gas demand, from China. Click to enlarge (hat tip reader Michael):
Read more...Commodities had a nice day Wednesday, with oil in particular spiking up. Although the trigger appeared to be the Fed rate cut, one has to wonder at the seemingly disproportionate price reaction, particularly given deteriorating fundamentals and hence falling demand. One reason for the sudden enthusiasm for commodities is that, as in the frenzied days […]
Read more...One of our pet themes in recent weeks is that the fall in trade traffic, indicated and possibly overstated by a dramatic fall in the Baltic Dry Index, is due at least in part to difficulties in arranging and getting other banks to accept buyers’ letters of credit. For those new to this topic, international […]
Read more...Talk about getting creative to avoid use of the dollar (the iranians are particularly keen to avoid use of the dollar in oil trading, it verges on a point of honor with them. They have been selling oil to the Japanese with trades denominated in yen rather than the dollar as the reference currency for […]
Read more...Large current account surpluses do not mean a country’s are on a sound footing, as Japan, China, and now the Gulf States illustrate. A big bank near-failure in Kuwait has led the central bank to mount a rescue plan, and is weighting guaranteeing bank deposits. As the example of Ireland showed, bank guarantees (when stronger […]
Read more...Note that the consensus (based on news reports, not a formal sampling) was for OPEC to cut 1 million barrels now, with another 1 million in the offing. OPEC announced a deeper immediate cut and left open the possibility of another reduction in December. From Bloomberg: The Organization of Petroleum Exporting Countries agreed to cut […]
Read more...Despite some calls that a commodities bottom is nigh (see Marc Faber, hat tip reader Megan), the Baltic Dry Index, a proxy for international shipping and international manufacturing, continues an alarming fall. While the BDI is known for false positives about trends in economic activity, the dramatic decline in BDi is partly the result of […]
Read more...Russia is dependent on oil exports for its new-found prosperity and does not appear ready to give it up. From CNN Money (hat tip reader Michael): Russia’s top energy official said Wednesday that the nation may set aside an oil reserve to influence global prices – but won’t cut output, news reports said. Deputy Prime […]
Read more...We mentioned earlier, focusing on a comment made in Brad Setser’s post “Where is My Swap Line?” that emerging economies had not internalized the lessons of the 1997 Asian crisis as much as was widely believed. Their central banks if anything overreacted, keeping their currencies cheap against the dollar and amassing large foreign currency reserves […]
Read more...Many investors assume that energy use is a relentless upward march as populations grow and consumers acquire more gadgets. But oil consumption has contracted meaningfully in the past, most notably in the first oil shock, when demand fell from roughly 67 million barrels per day to 59. And recall that the oil price shock was […]
Read more...