Apocalyse Now: Regime of High Oil and Food Prices

[jpdm]

....Record high oil and food prices are hurting the economies of alot of nations including the Philippines...the spike in oil prices has dampened our stock market, consumption and manufacturing...our trade deficit has increased and businesses are scaling back their expansion...

....The spectacular rise of oil and food prices are also now triggering mass actions around the world...

....The world is bracing itself for an impending socio-economic slowdown..

Manila Standard
May 28, 2008
AFP with Othel V. Campos
RP firms start scaling back expansion plans

PHILIPPINE companies are shelving expansion plans, cutting capacity and easing up on hiring new workers as the US economic slowdown and record-high oil prices take their toll, the central bank said yesterday.
A poll of 1,258 firms among the country’s top 7,000 companies showed fierce competition and weak demand as “key risks to business activity” in the three months to June, the bank said in a statement.
While there were more respondents with a positive outlook than negative, the “overall confidence index” was down, “consistent with the broadly more cautious sentiment of businesses and consumers in many developed economies.”
Separately, the United Nations Food and Agriculture Organization said the Philippines’ import bill would kick up by up to 40 percent this year as a result of more expensive rice, wheat and dairy products.
That would translate into $3.45 billion this year from $2.5 billion last year.
“Surging prices of wheat, rice and vegetable oils will take their toll on import costs,” the UN agency said.
“Soaring international quotations are mostly responsible but also freight costs, which have nearly doubled for many routes.”
Last week, Economic Planning Secretary Augusto Santos said food and energy inflation likely capped economic growth to between 5.2 and 6.2 percent in the three months to March.

Manila Times
May 28,2008
G7, G20 Nations Urged To seek boost in Oil Output
AFP

PARIS: France called on the G7 on Tuesday to press oil-producing nations to boost their output in a bid to bring down prices that have reached record highs and thrown a spanner in oil-fired economies. Finance Minister Christine Lagarde said she would put the request to her counterparts of the Group of Seven club of rich countries to seek a common front with Britain, Canada, Germany, Italy, Japan and the United States.
“We cannot forever be in a market system in which the price is permanently on the rise, to the benefit of producers, who are building up major oil revenues,” Lagarde told France 2 television.
“I have decided to alert all of my G7 colleagues to discuss this issue, among consumer nations, and that we present it to producing nations,” she said.
Lagarde said she would ask the G20 group of emerging economies to join in the drive to bring down the price of the barrel, that hit a record high of $135 last week.
France has been rocked by nearly three weeks of protests by fishermen who have blocked ports, fuel depots and marinas to press demands for government aid to help cushion soaring fuel coasts.
While the protest movement appeared to be dying off in France after the government released aid, fishing fleets in Spain, Portugal, Italy and Greece launched action to press for assistance.

President Nicolas Sarkozy said in a radio interview that French consumers should brace for higher oil prices and that France was committed to developing alternative energy sources.

“The demand for oil products is getting stronger and stronger and supply is not increasing or very little,” said Sarkozy.

[ringostarr]

....Record high oil and food prices are hurting the economies of alot of nations including the Philippines...the spike in oil prices has dampened our stock market, consumption and manufacturing...our trade deficit has increased and businesses are scaling back their expansion...

....The spectacular rise of oil and food prices are also now triggering mass actions around the world...

....The world is bracing itself for an impending socio-economic slowdown..

yun mga walang delikadesang tao na nakipaglaro sa commodities and ignoring the possible consequences eh sigurado makakatikim kay nature

[pup2]

I just hope when the rioting starts, the rioters make sure that the speculators/rumor-merchants like * ***** ******* get creamed first.

[uls]

there are huge amounts of money moving electronically around the world.

they are looking for parking spaces where they can grow...

they used to be parked in stocks and bonds...

but when the US housing bubble blew up and banks stopped lending, these huge amounts of money fled their parking spaces coz if they stayed there, they will be destroyed (wealth destruction).

They found new parking space in the commodities markets.

Because of their size, and because the commodities markets are not that big, the massive inflow of money distorted the prices of commodities.

Analysts say the value of a barrel of oil should be around $80. It's $130+.

From Globe and Mail, Canada - May 28, 2008
"BCA Research says fair value for oil is $80 a barrel."

Speculators have distorted the price of rice.

It rose from $400 to $700 to $1,000 in a matter of weeks.

So eto tayo ngayon... mahal ang pagkain, mahal ang gas.

Humina ang economy natin.
http://www.gmanews.tv/story/98001/So...c-growth-to-52

The peso has weakened to almost P44 to $1. Maybe coz of strong demand for dollars. Importers need more dollars to buy more expensive oil and other commodities...

So what do we do now...

I don't know. Tiis.

[Flagg]

....The peso has weakened to almost P44 to $1. Maybe coz of strong demand for dollars. Importers need more dollars to buy more expensive oil and other commodities...

So what do we do now...

I don't know. Tiis.

You got it right as usual boss. Hindi lang stocks and bonds, pati hedge & mutual funds bagsak.

I hope bago things get worse, mag-implode yung mga speculators. Bale bibigay ang mga principals nila cuz of costs of living tapos they withdraw their funds from the pool na mina-manage nitong mga ito, decreasing their power.

Parang yung sa CALPERS. Mejo mahirap buhay ngaun sa Cali.

[Monseratto]

Nobody knows how this will end. Inflation is the bad word for the season. Economic activity will slow to alarming levels if things do not settle down.

Soaring food, oil prices drag Q1 economic growth to 5.2%

"We are experiencing an economic slowdown that is generally caused by inflation, which is caused by high oil and food prices... From where I'm sitting, I see no end to [these]," he said.

Santos also said that the economic slowdown abroad hit the Philippines harder than it did other Asian countries because the country is a heavy oil and fuel importer.

He also said that exports were weak in the first quarter because of the economic crunch in the United States, the Philippines largest export destination.

Former NEDA chief and University of the Philippines economics professor Cayetano Paderanga also expects a protracted economic slump for the Philippines.

"The slowdown was expected and will continue before things start to turn up. Most hope it could come mid to late 2009, but it could come late 2010," Paderanga said.

[ringostarr]

bec. it's all about greed. people dont want to work/build anymore. puro easy money ang gusto

[v6dreamer]

bec. it's all about greed. people dont want to work/build anymore. puro easy money ang gusto

Gaya ng mga kutong cop at tulisang nagkalat. Mga PESTE nga ang mga iyan.

[jpdm]

Parang mahirap ng gumamit ng sasakyan pag 70-100 pesos na per liter of gas.....huhuhu....Diyos ko...magkano pamasahe nyan...

Masakit sa bulsa...

Mukhang magkakatotoo sinabi ni Ariel Ureta..

Sa ikauunlad ng bayan...bisikleta ang kailangan....

Pati koryente at lahat ng produkto damay....

..naalala ko yung apocalyptic movie that the world stop because of worldwide riots due to high prices of food and fuel....

In the end these sons of devils who speculate on oil and food plus the gluttonous OPEC (as producer) US (as owner of the biggest oil companies in the world that control worldwide supply (Is it Enron which was grilled by the US Congress?The seven sisters (oil companies) including Exxon, Gulf, Anglo-Dutch Shell, British Petroleum, Totalfina elf, Aramco etc..)

Indonesia just resigned from OPEC...buti naman..

Kawawa kapitbahay nya..ang Pinas....

[uls]

Hindi lang stocks and bonds, pati hedge & mutual funds bagsak.

Mutual funds are regulated by the govt... they can only invest in stocks and bonds... so bagsak sila...

Hedge funds are not regulated. They can invest in anything. Most of them lost money in stocks so now they are trying to earn back the money in the commodities markets. Ginagawa nila fund raising ang commodities.

Pati pension funds pumasok sa commodities.

Look at what Calpers is doing:

MarketWatch - May 13, 2008
A recent move by pension giant Calpers to commit to raise their commodity exposure to $7 billion (from less than $400 million) underscores this growing ...

Dapat yung nasa commodities market yung talaga may balak na tumanggap ng delivery ng oil, grains, metals...

What the hell is a pension fund doing in the commodities market?!

[jpdm]

Mutual funds are regulated by the govt... they can only invest in stocks and bonds... so bagsak sila...

Hedge funds are not regulated. They can invest in anything. Most of them lost money in stocks so now they are trying to earn back the money in the commodities markets. Ginagawa nila fund raising ang commodities.

Pati pension funds pumasok sa commodities.

Look at what Calpers is doing:

MarketWatch - May 13, 2008
A recent move by pension giant Calpers to commit to raise their commodity exposure to $7 billion (from less than $400 million) underscores this growing ...

Dapat yung nasa commodities market yung talaga may balak na tumanggap ng delivery ng oil, grains, metals...

What the hell is a pension fund doing in the commodities market?!

This greed will boomerang to them specially in first world countries who are used to with 1st world conveniences...

Unlike the Philippines and other poor countries who are used to brown outs, poor utilities and infrastructures, lack of food, lack of luxury goods and uses inefficient public transport everyday...

Tingnan ko kung mabuhay ang America ng walang langis, walng koryente at brown out lagi at walang magagandang sasakyan tulad ng SUV...

[uls]

Yes Americans are spoiled.

Their lifestyle is very wasteful.

They are less then 5% of the world's population but they consume more than 25% of the world's energy.

Why do u need a 4 ton SUV to bring a 60 pound kid to school?

----------------------------------

Ginagawa lang naman ng mga fund managers trabaho nila...

they have to make the funds they manage grow.

malulugi sila sa stocks and bonds e...

---------------------

we are living in interesting and scary times.

[ghosthunter]

Why do u need a 4 ton SUV to bring a 60 pound kid to school?

Same as people from London are doing. They feel large SUVs are safer for them and their children.

[uls]

Cars became unsafe when big SUVs started crashing into cars.

So everyone buys an SUV.

Parang arms race yan e.

What's next? everyone drives around in a tank?

[jpdm]

[SIZE=2]Manila TImes[/SIZE]
[SIZE=2]May 31, 2008[/SIZE]
[SIZE=2]High global prices here to stay-[/SIZE]
[SIZE=2]OECD, FAO study
[/SIZE]
[SIZE=2]
[/SIZE]
[SIZE=2]
[/SIZE]
[SIZE=2] PARIS: High global food prices are a new fact of life, a major report warned on Thursday as 22 countries, mostly in Africa, were listed as being at severe risk from record food and fuel costs.[/SIZE]
[SIZE=2]At the same time, there were calls for an end to restrictions on the export of food, with open trade said to be vital in any solution to the record prices which have sparked protests in many countries. [/SIZE]
[SIZE=2]The cost of feeding the family will remain far higher than in the past decade, even though prices should ease in coming years, the Organization for Economic Cooperation and Development and the UN Food and Agriculture Organization said in a report on the global agriculture outlook for the next 10 years. [/SIZE]
[SIZE=2]The study was published against a background of protests in countries in Asia, Africa and the Caribbean in response to soaring food prices. [/SIZE]
[SIZE=2]The jump in prices has added to the number of people in extreme hunger and some humanitarian aid is “urgently required,” said the OECD and FAO joint report. [/SIZE]
[SIZE=2]“Current high prices will hit the poor and hungry people hardest,” it said. [/SIZE]
[SIZE=2]OECD chief economist Angel Gurria added: “The way to address rising food prices is not through protectionism but to open up agricultural markets.” [/SIZE]
[SIZE=2]The director general of the FAO, Jacques Diouf, told a press conference that “coherent action is urgently needed by the international community to deal with the impact of higher prices on the hungry and poor.” [/SIZE]
[SIZE=2]And in Yokohama, Japan, the head of the UN World Food Progamme, Josette Sheeran, urged “all nations to allow us to purchase food, even if they have controls for humanitarian purposes. This is very critical.” [/SIZE]
[SIZE=2]“Many nations have imposed export controls. Today we buy 80 percent of our humanitarian food in the developing world,” Sheeran noted. [/SIZE]
[SIZE=2]In Rome, the FAO listed 22 countries, most of them in Africa, which had high levels of “chronic hunger” and were “especially vulnerable” to rising food and fuel prices. [/SIZE]
[SIZE=2]The OECD-FAO report said hundreds of millions of people were already going hungry before the price increases but that “the numbers of people suffering from extreme hunger have [now] increased even further. [/SIZE]
[SIZE=2]“In the short term, humanitarian aid for the populations in countries most severely affected is urgently required,” the report said. [/SIZE]
[SIZE=2]Several factors had coincided to drive the “exceptional increases in prices” and some of the pressure would ease in the next few years. [/SIZE]
[SIZE=2]But the two bodies warned that food subsidies and trade protection were not the answer, saying that high prices might even be part of the solution by stimulating neglected investment in agriculture in poor countries. [/SIZE]
[SIZE=2]Raising food supplies in poor countries also depended on improved government, infrastructure and property rights, the OECD and the FAO said. [/SIZE]
[SIZE=2]The report warned that rising prices had endangered the UN Millennium Development Goal of eradicating hunger and it was strongly skeptical about the benefits of agriculture-based bio-fuels, which have contributed to higher costs. [/SIZE]
[SIZE=2]However, the “transitory nature” of some of the factors behind the recent trend meant that prices would fall in due course from record peaks. [/SIZE]
[SIZE=2]The report pointed to “adverse weather conditions in major grain-producing regions of the world, with spillover effects on crops and livestock that compete for the same land. [/SIZE]
[SIZE=2]“These conditions are not new. They have happened in the past and prices have come down once more normal conditions prevail and supply responds over time.” [/SIZE]
[SIZE=2]There was “no reason to believe that this will not recur over the next few years,” it said, while adding that commodity prices will continue “substantially above” the levels of the past 10 years. [/SIZE]
[SIZE=2]Comparing average prices for 2008 to 2017 with 1998 to 2007, it said beef and pork could be 20 percent higher; wheat, maize and skim milk powder 40-60 percent; butter and oilseeds more than 60 percent, and vegetable oils more than 80 percent. [/SIZE]
[SIZE=2]The report cited changing diets, urbanization, rising po-pulations and economic growth as underpinning demand in developing countries. [/SIZE]
[SIZE=2]The most-threatened countries listed by the FAO are Eritrea, Niger, the Comoros, Botswana, Haiti and Liberia. [/SIZE]
[SIZE=2]They are followed in order of severity by Burundi, Tajikistan, Sierra Leone, Zimbabwe, Ethiopia, Zambia, the Central African Republic, Mozambique, Tanzania, Guinea-Bissau, Madagascar, Malawi, Cambodia, North Korea, Rwanda and Kenya.
-- AFP[/SIZE]

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[uls]

please read this: http://news.yahoo.com/s/ap/all_busin...KwKBZ1qEis0NUE

eto ang sinasabi ko for months and months.

Last year, the US housing bubble blew up.

Mortgage-backed securities suddenly became toxic waste.

Institutional investors like pension funds, hedge funds, foreign funds etc bought a lot of mortgage-backed securities. They got burned bigtime.

Those funds had to go somewhere else for growth.

Following the US housing meltdown and credit tightening by banks and Fed rate cutes, a lot of money left the stock and bond markets.

But the commodities markets became red hot.

Price of oil, grains, gold etc all went up... fast.

Isnt that obvious?

Those huge funds went into the commodities markets.

The only explanation we heard was China and India, China and India, supply and demand, supply and demand...

Now, after so many months, the media notices it and reports about it.

well, it's already old!

The funds are starting to leave the commodities market... slowly...

Kumita na sila e.

They are going somewhere else again...

[Jun aka Pekto]

The funds are starting to leave the commodities market... slowly...

Meh. We've been in gold since the late 90's. We're in it for the longterm. We got in when it was near rock bottom.
it'll be a looooong while before we panic.

[jpdm]

Diyos ko, ang 200 pesos 4 liters of diesel na lang o less 4 liters for gas!

Manila Bulletin
June 1, 2008
Big oil price hikes Gas up P1.50 per liter; LPG by P3.50 per kilo
Oil firms cite relentless rise in world prices

By MYRNA M. VELASCO

With world oil prices hitting all-time high records almost on a daily basis, local oil companies announced their biggest per-liter adjustment of P1.50 for gasoline and other oil products at the pumps over the weekend.

Compounding the consumers financial burden was the simultaneous increase of P3.50 per kilogram in the cost of liquefied petroleum gas (LPG) to price the standard 11-kilogram tank at P38.50, implemented by the LPG Marketers Association.
Pilipinas Shell Petroluem Corporation was the first to adjust prices at 12:01 a.m. yesterday, Saturday, May 31, while Chevron Philippines, Total Philippines, and dominant player Petron Corporation moved their prices up at 6 a.m.
Petron said the price hike was due to the relentless surge in crude prices, emphasizing that the estimated month-to-date average for benchmark Dubai crude already hovered at $ 119.46 per barrel, up by $ 16 per barrel from the April average.
"This is the largest single month increase ever for Dubai crude," the company said.
Prior to this round of adjustment, the price ranges for unleaded gasoline in Metro Manila were at P50.33 to P53.26 per liter; diesel at P42.80 to P45.47 per liter; and kerosene at P47.15 to P50.80 per liter.As of May 30, the regional spot price of unleaded gasoline as referenced on the Mean of Platts Singapore (MOPS) was $ 130.92 per barrel; while diesel was $ 161.23 per barrel.
The pick-up price of LPG in the Philippines was at R582 to R628 for the standard tank used by households for cooking.
Crude oil prices hit its peak of $ 135 per barrel on May 21, primary for the West Texas Intermediate (WTI), which is the oil benchmark of the United States, the world’s largest oil consumer.
Market analysts noted that the drastic rally in prices occurred after the US Energy Information Administration reported an unexpected decline in US crude oil and gasoline inventories by 5.4 million barrels to 320.4 million barrels and by 800,000 barrels to 209.4 million, respectively.
Worries of supply tightening have also rattled markets after a sudden surge in diesel demand in China because of coal supply shortage and with earthquake-devastated regions turning to diesel generators.

[uls]

jpdm, there's a double whammy happening here..

not only is oil very expensive,

U now need more pesos to buy more dollars to buy oil...

P43.88 to $1 as of friday.

Banks are selling dollars above P44.

Bad times are ahead dude.

[jpdm]

Erratum:

apocalypse ang spelling.mali yung spelling sa title ng thread.nawala yung p

anyway,

start of the apocalypse na talaga....