World economy talk

[tidus1203]

Welcome to the future of world economics... I hope RP can somehow be the Mexico of China (as Mexico is to the US today). Better kiss the asses of the Chinese if we want a brighter economic future rather kiss American asses...

[uls]

yep

you want to be a supplier of something to China

anything they need... oil, minerals...

the main beneficiaries of China's economic output are raw material suppliers like Australia

--

hey check out what's going on in Venezuela

unexpected currency devaluation

Devaluation in Venezuela sparks spending frenzy
http://www.ft.com/cms/s/0/165bdc0e-f...nclick_check=1

Frenzied shoppers across Venezuela spent the weekend snapping up goods before an expected increase in prices, after Hugo Chávez, president, announced a steep devaluation of the currency.

Venezuelans were caught off guard on Friday by the introduction of a multi-tiered exchange rate regime, a move aimed at restarting a stagnating economy ahead of key elections in September.

Chavez says military will monitor Venezuelan prices
http://edition.cnn.com/2010/WORLD/am...z.devaluation/

(CNN) -- In the wake of his decision to devalue Venezuela's currency, President Hugo Chavez on Sunday said he would put the military on the streets to ensure that business owners don't raise prices.

Venezuela's President Chavez warns price 'speculators'
http://news.bbc.co.uk/2/hi/business/8451056.stm

Venezuela's President, Hugo Chavez, has said troops will seize control of any business that raise prices in response to the devaluation of its currency.

He said there was no reason for prices to go up, and speculators' businesses would be handed over to the workers.

Venezuelans have rushed to the shops to buy imported goods before the bolivar's devaluation comes into effect.

Mr Chavez says devaluing the bolivar by at least 17% will boost competitiveness and reduce dependence on imports.

But critics say it will fuel inflation, which has already risen to 25%

hahaha

that's really business-friendly huh?

that will encourage a lot of investors

amazing

[tidus1203]

Communists idiots! Then let them rot in hell!

[Monseratto]

Di lang currency ang problema ni Hugo...There goes his socialist experiment.

CARACAS, Venezuela: Venezuela is at risk of a devastating power collapse as drought pushes water levels precariously low in the country’s biggest hydroelectric dam, posing a serious political threat for President Hugo Chavez.

Chavez has blamed the electricity predicament on the El Nino weather phenomenon in the Pacific Ocean, along with global warming. But critics blame the government, saying investments in infrastructure haven’t kept up in spite of Venezuela’s bountiful oil earnings.

Poleo said investments have been hobbled by a lack of planning, waste and corruption, and that based on his research only about 25 percent to 30 percent of the funds approved for infrastructure upgrades have reached their intended uses.

[tidus1203]

Communism as an economic ideology is a FAILURE! China is not a communist economically speaking (only communist politically) they are the best capitalists in the world. Communism and their founders have forgoten one important human behavior and thus resulting in its failure in real world conditions and thus remain only a textbook idealogy. GREED!

[uls]

i think Chavez devalued the bolivar coz Venezuela's dollar reserves have fallen to dangerously low levels

you devalue a currency to discourage imports (drain on forex reserves)

and encourage exports

they now have a 2-tiered exchange rate

2.6 bolivar = $1 (previously 2.1 bolivar) for essential imports

and 4.3 bolivar = $1 (thats a 50% devaluation) for non-essential imports (like luxury goods)

but Venezuela is an oil exporter

impossible naman siguro maubusan ng dollars ang Venezuela

but remember, oil price fell from $140+ in 2008 to $30+ in early 2009

Venezuela's oil income suffered tremendously

keep in mind magastos si Chavez

when oil price was triple digit, he was spending money like money was going out of style

(but little of the spending went to Venezuela's infrastructure as what Monseratto posted above)

his spending habits probably didnt change even when oil income fell to rock bottom levels

so here's Venezuela now...

[tidus1203]

The problem is the sheer amount of cheating and corruption having a two tiered exchange rate! Imagine mo politicians will use the lower exchange rate then sell at a higher exchange rate.

Whatever you do NEVER EVER play around with the currency! It always fails! Let the market determine the value of the currency. Nagawa na ata ito dati ng Venezuela before and it failed I wonder what this dumbass Chavez thinks it will be better today?

[uls]

morning

huge demand for zero-yielding 3-month Treasuries



$97B tendered, $23B accepted

more than 4 dollars chasing each dollar of treasuries

[tidus1203]

The result of low interest rates combined with lack of confidence. Another failure for Keynesians!

[uls]

news from China that moved markets

China to raise deposit reserve requirement ratio by 0.5 percentage points
http://news.xinhuanet.com/english/20...t_12797931.htm

BEIJING, Jan. 12 (Xinhua) -- The People's Bank of China (PBOC), the central bank, announced on Tuesday to raise the deposit reserve requirement ratio by 0.5 percentage points from Jan. 18 this year.

[uls]

4 bankers...

Lloyd Blankfein (GS), Jamie Dimon (JPM), John Mack (MS), Brian Moynihan (BofA)...

appeared before the Financial Crisis Inquiry Commission last night

i wonder what they were thinking



hehe

---

watch

http://www.thedailyshow.com/watch/tu...street-bonuses

[uls]

local sugar prices soaring

here's why

this is sugar traded in the ICE ($/lb)


this is sugar traded in the London Futures Exchange ($/metric ton)

[uls]

^^

ignore the constantly changing charts above

here is 1 year price of sugar

[tidus1203]

And my idol has spoken again!

Buying distressed commodities is a better way to make money than investing in stocks, according to Rogers.
"The fundamentals (for agriculture) have gotten better," he said. "The inventories are now at the lowest they've been in decades, not in years."
"Sometimes in the next few years we're going to have very serious shortages of food everywhere in the world and prices are going to go through the roof."Cotton and coffee are good buys because they are very distressed, while sugar, despite the fact that it has gone up a lot, is still down 70 percent from its all-time high, according to Rogers.

http://www.cnbc.com/id/34874608

[uls]

rising sea level

reduction in Earth's land mass

less places to plant food

changing climate

poor harvests

rising human population

less food

more people to feed

sounds like a crisis waiting to happen

place your bets

[safeorigin]

anybody selling tickets to mars?

anyways, where do you reckon be a good place to invest in agriculture?

[tidus1203]

I am no farmer so I can't say. Ako I just buy future contracts pero to be honest its not the best way to get into agricultural products... Mas maganda sana farmland that creates abundant commodities...

[tidus1203]

http://www.abs-cbnnews.com/video/bus...r-prices-shoot

Sugar shortage!!! Rice will soon follow. As uls said, place your bets!

[uls]

Brazil and India (number 1 and 2 sugar producers in the world) produced less sugar coz of bad weather

that put upward pressure on world sugar prices

Sugar prices remain high across globe
Published on January 15, 2010 at 15:00
http://www.commodityonline.com/news/...24788-3-1.html

LONDON (Commodity Online) : Global sugar prices remained higher after world’s second largest producer, India turned into a net importer following a drop in local production.

London’s March sugar futures fetched a premium of $118 a tone over New York’s March contract, up from $114 in November and $88 in October, which was also driven by worries about tight global supply.

London benchmark March white sugar futures LSUc1 rose $11.40 to end at $736.50 per tonne on Wednesday, within sight of a lifetime high of $748 hit on Jan. 7 on expectations of strong imports from Asia.

New York’s March raw sugar contract SBc1 climbed 0.68 cent to settle at 28.04 cents per pound, within sight of a 29-year peak at 28.95 cents struck last Thursday.

Premiums for London’s May versus New York’s May contract stood at $136 a tonne in January and December, higher than $121 in November and $101 in October. Differentials for July contracts jumped to $140 a tonne this month from $98 in October.

India has extended the deadline for duty free imports of white sugar to the end of 2010.

Pakistan will abolish taxes on the import of 700,000 tones of whites and Indonesia could step up purchases after domestic prices revised record highs.

Meanwhile millers in Thailand, another key player in world sugar trade, are rushing to refine raw sugar into white and exploit a 30 percent price premium amid strong demand in Asia.

Premiums for Thai high-polarisation raw sugar were steady at between 65 and 75 points over New York’s March contract, with no bids reported as dealers awaited the result of a tender to sell 254,499 tonnes of Thai raw sugar later on Thursday.

High international prices pushed up prices in Indonesia and it hit a record high around 11,000 rupiah a kg ($1.20) levels last seen in September 2009.

In anticipation of a shortage, Indonesia has granted permits to state firms to import 500,000 tonnes of white sugar and has so far secured deals to buy 280,000 tonnes.

[uls]

Today, Asia reacts to JP Morgan's Jan. 15 earnings report

big profits at JPM

but still big problems

the bank still has a lot of bad consumer loans (like mortgages, credit cards)

so investors are asking -- if a bank like JPM still has problems, what more the other banks?

Asia stocks fall today

--

some excerpts from Friday's JPM conference call:

http://blogs.wsj.com/deals/2010/01/1...dip-recession/

(JPM CEO Jaime Dimon)

Dimon: Look, you guys are just as good at forecasting the economy as anybody else. And we’ve seen delinquencies getting a little bit better, we saw credit card spend be up a little bit…..We think loans in middle market are actually starting to level off and we see small business demand actually go up….there are good signs out there, but we don’t know.

That sounded sort of positive, but a few minutes later, Dimon was invoking the dreaded idea of a double dip recession.

Betsy Graseck of Morgan Stanley asked if there was anything preventing JP Morgan from raising its dividend.

Dimon: Not really. I think we’ve said we really want to see a real recovery before we do that because we don’t want to have to do this again, just in case you have another dip down here.

Finally, Calyon analyst Mike Mayo tried to clear things up. “So you expect [nonperforming assets] to go down in mid or late 2010?”

Dimon: Well, Mike, we don’t know when the recovery is.