World economy talk

[Monseratto]

rising grain prices affect developing countries more where people spend up to 3/4 of their income on food

remember soaring food prices in 07-08 caused social and political instability in developing countries

another repeat coming

Weather again plays havoc...I think the previous wild swings was also because of drought in Russia. Hopefully the US won't resort to the same action as Putin did before...

MOSCOW — Prime Minister Vladimir V. Putin on Thursday banned all exports of grain after millions of acres of Russian wheat withered in a severe drought, driving up prices around the world and pushing them to their highest level in two years in the United States.

[uls]

risk off Friday

Italy


Spain

[uls]

Euro-Krise: IWF will Griechenland-Hilfen stoppen - SPIEGEL ONLINE

Drohende Pleite

IWF will Griechenland-Hilfen stoppen

Griechenland könnte schon im September pleitegehen. Der Internationale Währungsfonds hat nach Informationen des SPIEGEL der Brüsseler EU-Spitze signalisiert, dass er sich nicht an weiteren Hilfen für das Land beteiligen werde.

translated:

Impending bankruptcy

IMF wants to stop Greece-aids

The patience of the International Monetary Fund (IMF) with Greece comes to an end: Senior officials have told the Brussels EU leaders to information obtained by SPIEGEL, the IMF was no longer willing to provide additional funds for Greece help.

[uls]

good morning

fear is in the air

Spain's autonomous regions


Valencia is the first autonomous region to ask for bailout

then Murcia

Murcia next Spain region in spotlight for aid | Reuters

(Reuters) - Tiny Murcia was on course on Sunday to be the second Spanish region to request help from the central government to keep it afloat, as media reported half a dozen local authorities were ready to follow in the footsteps of Valencia.

then very likely Catalonia, Castilla-La Mancha, Baleares, the Canary Islands, Andalusia...


http://www.cnbc.com/id/48279904

US Benchmark 10-Year Yield Hits New Lows

Yields on U.S. benchmark 10-year Treasuries hit a record low of 1.4365 percent in early Asian trade on Monday on market concerns Spain may need a full-fledged bailout after an indebted Spanish region requested financial aid.

[Monseratto]

No more time to snooze...

Spain Scraps Siesta as Stores Stay Open to Spur Spending: Retail - Bloomberg

The Spanish shopping siesta may be about to become the latest victim of the sovereign debt crisis.

To stimulate spending after a 23 percent drop in retail sales since 2007, the euro region’s fourth-largest economy this month approved measures that allow shops of more than 300 square meters (3,229 square feet) to open for 25 percent longer a week. The new rules may encourage the outlets to sell during the traditional afternoon snooze from 2 p.m. to 4 p.m., and on an additional two Sundays or holidays a year for a total of 10.

Spain is following its European neighbors in trying to liberalize shopping hours that have traditionally been checked by governments in the region to protect religious observances, for rest and on behalf of smaller retailers that have fewer resources to staff shops around the clock. England has allowed retailers to open for longer on Sundays during the Olympics than the six hours usually allowed. In France, food shops can be open 13 hours a day and stores located in tourist areas have the right to open on Sundays.

Spanish shops are allowed to open for less time than anywhere else in Europe, according to its government, which was asked by retail associations to allow large stores to open 16 Sundays or holidays a year. Some smaller merchants opposed the extension, arguing that the bigger stores would have the necessary manpower and they wouldn’t. The new measures allow stores 18 additional business hours a week and will permit merchants to decide when to cut prices in sales instead of only twice a year.

[uls]

risk off mode

kanina Hang Seng -2.99%

Europe now in the red

Brent down more than $3

Spain 10 yr yield 7.51400%

[uls]

US 10 yr yield

[uls]

volatility index

[Monseratto]

Canada looking for other investors for its oil, but the only customer may not like them...

(Reuters) - State-controlled CNOOC Ltd launched China's richest foreign takeover bid yet on Monday by agreeing to buy Canadian oil producer Nexen Inc for $15.1 billion, forcing Ottawa to decide whether security concerns outweigh its desire for foreign investment in its energy resources.

[Monseratto]

Euro sinks to 1.21...

Moody's has lowered its assessment of the German economy, taking a first step toward a full credit rating downgrade for Europe's largest and pivotal market.

The agency on Monday lowered the outlook for the German economy to 'negative' from 'stable' - along with a similar move for the Netherlands and Luxembourg - sending a stark warning that no economy is immune from the eurozone crisis.

Moody's said that the three AAA-rated countries faced risks from the increased prospect of Greece leaving the eurozone and from the possible need to bail out Spain and Italy.

'The level of uncertainty about the outlook for the euro area, and the potential impact of plausible scenarios on member states, are no longer consistent with stable outlooks,' it said.

The ratings agency pointed to a 'reactive and gradualist policy response' by European leaders as one cause for continued concern.

But even if Greece survives, Moody's warned that richer nations would likely shoulder more burdens going forward, including the possibility of bailing out large eurozone members.

'The continued deterioration in Spain and Italy's macroeconomic and funding environment has increased the risk that they will require some kind of external support.'

That would send the eurozone crisis to a different level.

'Spain's economy and government bond market is around double the combined size of those of Greece, Portugal and Ireland,' Moody's said referring to the three already bailed-out eurozone nations.

Moody's also announced that Finland's AAA rating and outlook were unchanged.

Germany responded, saying it would continue to play the role of 'eurozone's anchor of stability'.

'Germany will do all it can with its partners to overcome the European debt crisis as quickly as possible,' the finance ministry said in a statement shortly after Moody's announcement.

[Ry_Tower]

Euro sinks to 1.21...

Germany and France economy na nga lang matino. Tsk

Pero expected na ito kasi nga nasa Euro sila eh, sapol pa rin talaga ng problem doon.

[uls]

Canada looking for other investors for its oil, but the only customer may not like them...

on the same day Sinopec agreed to buy a stake in Talisman Energy's North Sea business

Talisman Energy is one of Canada's biggest oil and gas producers

Nexen also has assets in the North Sea

looks like China is interested in North Sea crude or wants influence in Brent pricing

[uls]

China dives into UK’s North Sea oil industry - Telegraph

Chinese state-controlled group CNOOC agreed a $15.1bn (£9.7bn) offer to buy Canada’s Nexen, which is the second biggest oil producer in the UK North Sea. Its net UK production of both oil and gas is 114,000 barrels of oil equivalent per day (boepd).

In a separate deal, China’s Sinopec splashed out $1.5bn on a 49pc stake in the UK unit of Canada’s Talisman Energy, which produced an average of 71,500 boepd last year. Talisman said its joint venture with Sinopec would “invest more in the UK than Talisman would have on its own”.

Both Nexen and Talisman rank within the top 10 oil and gas producers in the UK North Sea. The UK’s entire oil and gas output stood at 1.8m boepd in 2011, according to industry body Oil & Gas UK.

[boybi]

China dives into UK’s North Sea oil industry - Telegraph

Ayaw yata ng Canadians ang CNOOC or China maginvest sa oils nila.

[uls]

actually the Canadian govt isnt really against it. they need the money

Analysis: Nexen deal should get approved by Ottawa | Business | Reuters

OTTAWA (Reuters) - A friendly $15.1 billion Chinese bid for a big Canadian energy company gels with government pleas for foreign money to develop the costly oil sands of northern Alberta -- a possible sign that the deal could win Ottawa's approval.

The Canadian government said only that it would review state oil company CNOOC's (0883.HK: Quote) bid for Nexen Inc (NXY.TO: Quote), based on its laws on foreign investment. But lawyers, analysts and insiders say there are good reasons for the deal to go ahead, and few reasons to block it.

[Monseratto]

The Canadians told the US to use it or loose it...guess what? Loose it. And the politicians in Washington aren't that happy.

Obama wanted to play a Green President...

CNOOC'S Nexen Deal Shows How Obama Pushed Canada Toward China - Forbes

When President Barack Obama rejected the Keystone XL oil pipeline, it spurred Canada to look to China as a new partner that could serve as a market for the increasing oil production coming out of Canada’s tar sands. Now, half a year following Obama’s decision, Canada’s vital oil industry appears to be drifting to China.

CNOOC, a state-owned China oil producer, announced on Monday that it has inked a $15.1 billion deal to buy Nexen, one of the crown jewels of Canada’s oil and gas sector. The Canadian government seems poised to approve the landmark deal given Canadian Prime Minister Stephen Harper’s courtship of Chinese investment and CNOOC’s deft political maneuvers, like promising to make Calgary the head office of the company’s North American and Central American operations.

Chinese influence in Canada has become very strong in recent years, impacting everything from the residential real estate markets in Toronto and Vancouver, to the rich Alberta oil patch, where Chinese investment has been higher than American investment for years. CNOOC itself first entered Canada in 2005 to buy a small slice of tar sands firm MEG Energy and recently finished a $2 billion purchase of another oil sands company, Opti Canada. There have been other big deals, especially involving China Petroleum & Chemical Corp., which bought Canada’s Addax Petroleum for $7.2 billion.

But the Nexen deal brings this trend to a whole other level and will serve as a test of Canada’s new commitment to diversify its economic dependence away from the U.S. in the aftermath of the Keystone decision. This would be a strategic setback for the U.S., which has been searching for years for secure sources of oil that are free from the political uncertainty that exists in Venezuela and the Middle East. Canada seemed like the perfect answer, a friendly and politically stable ally in America’s own backyard that had in recent years unlocked a massive new oil reserve using new technologies and innovation.

But Obama’s rejection of TransCanada Corp.’s Keystone XL Pipeline, which was designed to transport oil drawn from Canada’s tar sands down to the U.S. market, offended many Canadians. Harper responded to the snub by heading to China to start negotiating energy deals. Canada seems ready to embrace a stronger economic link with China even though China’s massive growth engine appears to be slowing and its communist-party government is heading toward an uncertain political transition. The historically strong U.S.-Canada relationship massively benefited both countries; it seems both countries could come to regret it if the economic and political relationship continues to weaken.

And who else doesn't want to be on the good side of China?

[uls]

the Keystone pipeline extension would have brought Alberta crude to refineries in Texas draining the excess stockpile at Cushing which is suppressing the price of WTI

right now the Keystone pipeline only brings Alberta crude to refineries in Illinois and to tank farms in Cushing

Obama didnt approve the extension

Obama is a prisoner of environmentalist leftwing groups

[uls]

Indonesia Suspends Soybean-Import Tax as Tofu-Makers Strike - Bloomberg

Indonesia will suspend a 5 percent duty on soybean imports until the year-end after makers of tofu and tempeh halted production to protest against surging costs spurred by the oilseed’s rally to a record.

The Finance Ministry will issue a ruling this month that will be effective without delay, Coordinating Minister for the Economy Hatta Rajasa said. The Trade Ministry has also held talks with importers to limit margins, he told reporters.

Indonesia’s decision, and the strike by local food-makers who’d demanded the levy be dropped, reflect the impact in Asia of the worst U.S. drought in more than 50 years, which has pushed soybeans and corn to all-time highs. South Korea’s government said today it’s considering stockpiling soybeans, corn and wheat to cope with rising prices. Goldman Sachs Group Inc. has said soybeans and corn will extend gains in Chicago.

[uls]

Fb

pre-market: 22.60 -4.39 (-16.37%)

[uls]