Wednesday 1 June 2011

China's Appetite For Overseas Oil, Copper, Alumini...

Commodities Tips, EquityTips, Trading Levels for Commodity: China's Appetite For Overseas Oil, Copper, Alumini...: "There are early signs that China's appetite for overseas oil, copper, aluminium, iron ore and coal will recover in the second half of 2011, ..."


Wednesday, June 1, 2011


China's Appetite For Overseas Oil, Copper, Aluminium, Iron ore & Coal


There are early signs that China's appetite for overseas oil, copper, aluminium, iron ore and coal will recover in the second half of 2011, having been dogged for much of the first half by the government's campaign to put the brakes on growth and inflation.

Higher seasonal demand, shrinking stockpiles and a narrowing gap between domestic and LME prices indicate that China's copper demand may be turning a corner, even if Beijing doesn't relax its tightening stance.

"Industry cross-checks show that there has been significant destocking for copper and others such as iron ore and coal," said Andrew Driscoll, a Hong Kong-based commodities analyst at CLSA.

"Should inflation be reined in, which we expect it would be, then we should see restocking activity fed by a recovery in imports in around the third quarter."

Copper imports in China, the world's second-largest producer after Chile, slumped 21 percent from a year ago to 596,000 tonnes in the first quarter and tumbled another 48.3 percent in April as the arbitrage window was closed.

Imports of LME-priced copper are now about 1,100 yuan more expensive than domestic supplies, down from 1,500 yuan at end-April, based on Reuters calculations, making it unprofitable to bring in material.
https://www.clsa.com/the-independent-view/issues-that-matter.php


All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

Mineweb.com - The world's premier mining and mining investment website As the focus shifts from the US dollar to the euro, gold continues to advance - INDEPENDENT VIEWPOINT | Mineweb

Mineweb.com - The world's premier mining and mining investment website As the focus shifts from the US dollar to the euro, gold continues to advance - INDEPENDENT VIEWPOINT | Mineweb

While debt problems remain a concern in the U.S., for now the focus has shifted to the Euro zone all of which remains a good thing for gold
Author: David Levenstein
Posted: Tuesday , 31 May 2011


JOHANNESBURG -
Luckily for US financial officials, the Greek debt crisis and Eurozone has taken center stage. It was not long ago when the United States hit their $14.3 trillion borrowing limit. The government now has until about August 2, before it begins to default on its loans, which have ballooned as the country spends more than it takes in. Now back to the crisis in Greece.
The Greek debt crisis continues as Antonis Samaras, leader of the biggest opposition party, New Democracy, rejected Papandreou's austerity plan at a meeting with him and other opposition leaders. These fresh austerity steps were demanded by the EU and IMF, raising concerns over whether Greece will receive its next tranche of bailout loans. And, just to make matters a little worse, a government minister in Ireland said it may have to ask for another loan from the EU and IMF because it will struggle to return to debt markets to raise funds next year. The European Union and International Monetary Fund officials are expected to deliver their verdict this week about Greece's financial dilemma.
If Greece does default, something that I personally can't see, several large financial institutions that purchased the high yield debt will lose billions. Frankly, while I have no sympathy towards these greedy financial institutions that were enticed by the high yields without any consideration of potential risk, I am concerned about the average individual who has little idea about the impact political mismanagement can have on the value of these fiat currencies. Suddenly, they will wake up and find that the money they have worked so hard all their lives for will become worthless. While Greece's financial situation remains perilous, there is very little mention about Belarus where a sharp devaluation of the Belarusian rubble has spread panic across the country, with people rushing to buy dollars, euros, toasters and canned goods - anything that will not lose its value as quickly as the national currency.
According to Associated Press, Belarusians swept store shelves and queued for entire days at currency exchange offices in a desperate attempt to protect their savings from the country's sinking fortunes. Last Tuesday, Belarusian officials cut the rubble's official value against the dollar almost in half to 4,930 rubbles per dollar from the previous 3,155. However, on the black market it takes 6,000 rubbles to buy a dollar.
To make matters worse, there is a physical shortage in the country of dollars and euros, which companies and households desperately want to own to protect themselves from a worse devaluation in the future. The government's own reserves are badly depleted and exchange offices have run out of foreign currency because they are allowed only to sell what they buy from clients.
Unable to buy foreign currency, people bought all they could from stores, both to stock up on food as well as to invest in tangible goods whose value won't deplete as quickly as the rubble's. Home appliances, electronics and other durable consumer goods have vanished from the shelves.
If I did not know better, this could have been Zimbabwe where a similar scenario played out a few years ago where the government printed so much money, it eventually was not even worth the paper it was printed on. Zimbabwe's hyperinflationary period is well documented. However, many people don't realize that after inflating their country several trillion percent, the government simply discontinued the currency... literally devaluing the Zimbabwe dollar to zero. People holding Zimbabwe dollars lost their entire savings overnight. And, pensioners who had saved their entire lives suddenly found that the money they had in the bank was not worth a dime.

Argentina's devaluation in 2002 sent its peso from 1:1 vs the dollar to roughly 4 pesos to the dollar. Banks closed, taking depositors' savings with them. Those with any cash savings were paying four times as much for goods, practically overnight. Unemployment soared. Even now, over ten years later, the economy has yet to fully recover.
These scenarios are very real, yet most individuals believe that this could never happen to them and that their respective government leaders have things under control. This is their first big mistake. World governments will resort to using fraudulent economic reports, rigged elections, payoffs, corruption and extortion in order to serve their own interests. And, if you think your concerns are a priority to any politician, think again. Sadly, in today's world most of these individuals are in this for their own self gain and financial enrichment. And, you don't feature in their agenda.
My point is, and as I have mentioned time and time again, in times like this it is absolutely essential to take precautionary measures to preserve your wealth. In times like these it is important to own tangible assets such property, gold and silver. In the event of a global monetary melt-down, your paper assets will become worthless while your gold and silver will have an intrinsic value.
Gold is the asset of last resort. Throughout history, national currencies have come and gone, but gold's value has remained remarkably stable. Gold is an asset which does not depend upon any government's promise to repay. It is not directly affected by the policy actions of any individual country and it cannot be repudiated or frozen as in the case of other assets. Gold is a long-term store of value, and a highly liquid, internationally recognized asset of last resort.
"Is now a good time to buy?" Absolutely! Gold is an investment for the long run. And, yes, of course it can be and is traded in the short-term on the future markets just like any other commodity, but unless you have an appetite for huge risk, I suggest that you simply accumulate the physical metal as if it was a savings account. And, for those of you who think US Treasuries or the US dollar is a safe-haven investment, you had better be prepared for a very bumpy ride. It is just a matter of time before the spot-light falls back onto the issue of the US debt.
TECHNICAL ANALYSIS
The price of gold is exhibiting signs of a potential break-out (blue circle). In order for this to happen, gold needs to hold above $1525 during the coming week or so.
David Levenstein began trading silver through the LME in 1980, over the years he has dealt with gold, silver, platinum and palladium. He has traded and invested in bullion, bullion coins, mining shares, exchange traded funds, as well as futures for his personal account as well as for clients.
Information contained herein has been obtained from sources believed to be reliable, but there is no guarantee as to completeness or accuracy. Any opinions expressed herein are statements of our judgment as of this date and are subject to change without notice.

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

China To Do 2-3 TRILLION Yuan Bailout Of Indebted Local Governments

IT BEGINS: China To Do 2-3 TRILLION Yuan Bailout Of Indebted Local Governments

Chinese yuans
Little by little, this notion that China is a rock of financial stability (at least compared to the US) is being chipped away.


Reuters (via hedgefundinvest) is reporting that the central government in Beijing is about to shift 2-3 TRILLION yuan ($308-$463 billion) in local debt to the Federal books.

Basically, local governments have borrowed like crazy, and there's been a fear of a massive wave of defaults, especially as revenue from real estate dries up.

Also there's no local bond market, so these are debts owed to banks, meaning that this bailout of localities is also a bank bailout (surprise!).

The expert on this issue is Northwestern poli-sci professor Victor Shih, who points out that China has been able to maintain the illusion of growth without government debt precisely through these local authorities.

Others have likened local governments to the infamous SIVs from the US financial crisis -- pockets of leverage hidden from public view.

Read more: http://www.businessinsider.com/china-to-bail-out-local-governments-2011-5?utm_source=dlvr.it&utm_medium=social&utm_campaign=moneygame#ixzz1Nz5P8krY


All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

LinkedIn's IPO Pop Was Good Should Look At Amazon

Anyone Who Still Thinks LinkedIn's IPO Pop Was Good Should Look At Amazon

chart of the day, linkedin revenue, may 2011

Where LinkedIn's Revenue Comes From



Two weeks ago, Wall Street drastically underpriced LinkedIn's IPO, costing the company and its selling shareholders about $200 million in lost proceeds.

In the wake of this, many in Silicon Valley and elsewhere, including LinkedIn investor Peter Thiel, have begun to observe that IPO "pops"--a huge jump in the price of the stock on the first day of trading--are bad, not good. This is a very healthy development.

A big IPO pop means that the company going public has given a huge, unwarranted gift to institutional money managers--and that gift has come right out of the pockets of the company and its selling shareholders. The company has also walked away from the IPO with much less money than it should have. And it has done this for vague and meaningless "benefits" that make Wall Street's life easier (and bank account richer), but that don't actually provide any value to the company.

After the LinkedIn deal, Wall Street rushed to defend the pop, arguing that LinkedIn's IPO had been a "pricing event, not a fundraising event" and that the huge pop would make future capital raising easier.

Both these arguments are bogus and self-serving (and well-practiced), but some observers still found them persuasive.

In the case of LinkedIn, the mispricing of the IPO cost the company and its selling shareholders real money--about $200 million, assuming the stock should have been priced around $60 instead of $45. And the company should not be grateful that its bankers just "got a deal done." Any underwriter could have gotten this deal done, just as any real-estate agent can sell a house in a hot market. Wall Street will make tens of millions of dollars off the LinkedIn deal, and it is reasonable for the company to demand more from its bankers than just getting a deal done.

Anyone who still doesn't believe this--who believes that Wall Street's institutional money managers need to get a huge gift or they'll never own the stock again, or that the stock will fall below the IPO and "taint" the company--should recall the IPO of Amazon.com.


AMZN May 31 2011, 05:20 PM EDT
196.69Change% Change
+2.56+1.32%
LNKD May 31 2011, 06:40 PM EDT
81.58Change% Change
-6.74-7.63%



Read more: http://www.businessinsider.com/anyone-who-still-thinks-linkedins-ipo-pop-was-good-should-look-at-amazon-2011-5#ixzz1Nz3EsKCy





All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

House Soundly Rejects Increase in Debt Ceiling


http://online.wsj.com/article/SB10001424052702304563104576357531475083742.html?mod=e2fb

House Soundly Rejects Increase in Debt Ceiling



The House on Tuesday soundly rejected a bill to increase the federal borrowing limit by $2.4 trillion—a symbolic vote that House GOP leaders said demonstrated that Congress will not increase the debt ceiling unless it is linked to a deficit-reduction plan.
The vote was 318-97. All Republicans who voted and 82 Democrats opposed the bill. Seven Democrats voted "present.''
Democratic critics called the vote risky political theatre, but Republicans were betting that financial markets would not be rattled by the measure's all-but-certain defeat in an early evening roll call vote.

Hitting the Limit

See where the federal debt limit has been at year-end since 1940.

"Today, we are making clear that Republicans will not accept an increase in our nation's debt limit without substantial spending cuts and real budgetary reforms,'' said Rep. David Camp (R., Mich.), chairman of the House Ways and Means Committee, during debate on the bill.
Mr. Camp had been in touch with financial industry leaders in advance of the vote to make sure they ``understood the purpose of this vote,'' an aide said.
Democrats said it was a political stunt for Republicans to move forward on a bill that they wanted to be defeated. ``Bringing up this bill in this fashion is a ploy so egregious that the Republicans have had to spend the last week pleading with Wall Street not to take it seriously,'' said Rep. Sander Levin (D., Mich.).
The vote is just one step in maneuvering between the two parties over the debt limit. It comes as a bipartisan group of congressional leaders is working with the White House on a deficit-reduction package, and two months before the deadline when the Treasury Department said the government risks defaulting on its obligations.
The bond market Tuesday betrayed little sign of worry over the debt limit. The 10-year Treasury note extended its almost two-month climb on Tuesday, with the yield—which moves in the opposite direction of price—falling to 3.05%. That's down from 3.57% in early April.
But in the relatively thinly traded market for credit default swaps—financial products that work like insurance against a bond default—prices for one-year default protection on U.S. debt have been rising faster than longer-term CDS contracts. That suggests that some have bought some protection, or are making speculative bets, on the outside chance of a technical default.
For more Goto...

http://online.wsj.com/article/SB10001424052702304563104576357531475083742.html?mod=e2fb

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.