Continue reading »]]> On the New York Mercantile Exchange, light sweet crude futures for March settlement traded at USD96.08 a barrel during early U.S. trade falling 0.28%.
Weakness in the U.S. dollar helped depress crude oil prices. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, gave back 0.06% to 79.03.
Dollar weakness generally lifts commodity prices, as it increases their appeal as an alternative asset and makes dollar priced commodities less expensive for holders of other currencies.

Oil traded near a six week low after booking a five day losing streak yesterday, the longest since August.
The heavily anticipated non farm payroll report hits the wire before the U.S. stock market opens on Friday.  It is forecasted that employment increased by 140,000 after climbing 200,000 last month.
Traders watch this report very closely to gauge the strength of the recovery in the world’s largest oil consuming nation.
In the U.S., data indicated that the number of filings for unemployment assistance last week dropped more than expected to 367,000 beating estimates for a decline of 373,000.
Economists believe jobless claims below 400,000 indicate an improving labor market. The number has remained below 400,000 in 12 of the last 14 weeks, helping fuel the bullish stock advance in 2012.
Meanwhile, Federal Reserve Chairman, Ben Bernanke stated at his testimony today that the economy is showing signs of improvement. In addition to requesting lawmakers to reduce the long term U.S. budget deficit.
Additional U.S. data indicated that the number of filings for unemployment assistance last week dropped more than expected to 367,000 beating estimates for a decline of 373,000.
Economists believe jobless claims below 400,000 indicate an improving labor market. The number has remained below 400,000 in 12 of the last 14 weeks.
In earlier news, slowing U.S. oil demand added to the sessions bearishness. Official data on Wednesday indicated that U.S. supplies climbed by a more than expected 4.2 million barrels last week.
Meanwhile, U.S. gasoline consumption decreased 7.97 million barrels a day, the lowest since September, 2001, while stockpiles increased 3.02 million barrels last week per official Energy Department data.
Oil traders continue to watch Iranian and Sudanese tensions very closely due to supply disruption concerns.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery advanced 0.42% to trade at USD112.55 a barrel, up USD16.40 on its U.S. Counterpart.

Improved labor market and tensions with Iran may set a platform for crude oil to rise again.

Continue reading »]]> Dear Investors,

When written in Chinese the word “crisis” is composed of two characters. One represents “danger”, and the other represents “opportunity”. This is the most accurate way I can express my thoughts and feelings about the coming year in the commodities markets. Volatile, unpredictable yet scattered with times of great opportunity. The prophecy of the world ending in 2012 seems ever more relevant when we look at a world flirting with potential disaster. 2011 saw an avalanche of economic and geopolitical events, as well as natural disasters. All of which had negative impacts for commodities demand. The events of the “Arab Spring” re-invigorated fears of instability in the Middle East, the devastating Tsunami in Japan sent a domino effect along the manufacturing supply chains, the already fragile US recovery appeared to be losing momentum, in China the tightening of monetary policy heightened fears of a hard landing and finally European sovereign debt issues  continued to escalate. So what does 2012 hold in store for us?

2012 stands a good chance of being politically pivotal, both in terms of people and a clash of ideologies. Among the five permanent members of the UN Security Council, Britain’s David Cameron is the only leader who seems certain of still being in power at the end of the year (famous last words). Barack Obama and Nicolas Sarkozy face presidential elections which they may lose. Dmitry Medvedev has already ceded the Russian presidency back to Vladimir Putin. Meanwhile in China, Hu Jintao and Wen Jiabao are due to prepare the handover in early 2013 of the  presidency and prime ministership to Xi Jinping and Li Keqiang. Altogether some 70% of China’s senior leadership is expected to change. What I am trying to emphasise is that the world’s leaders will be preoccupied at home. There will be a large dispersion from which countries will succeed and which will suffer. Emerging markets will for the first time buy over half the world’s imports in 2012 and the “red back” will make faster than expected strides towards being recognised as a global functioning currency.

Of the main macroeconomic events of 2011 the European debt crisis and the “Arab Spring” have the potential for greatest continued impact in commodities in 2012. If we can intelligently prepare and navigate through these factors and overlay them with the respective commodity fundamentals, we will have a good base to forecast future prices. In Europe we do not believe that the situation will get to a point where the Eurozone breaks up. With the respective nations working hard to manage their  situations at home what is very important is they agree on a roadmap on the process of fixing Europe over the next several years. With regard to the “Arab Spring” we have seen tensions re-appear in the Middle East and it seems apparent that this will not be for the last time. Also geopolitical escalation in Iraq and Iran seem likely. The US has removed all troops from Iraq which raises the question whether the country can withstand a potential future attack. In Iran the potential for sanctions appear high and increased political and potentially military action should not be discounted.

In the fundamental world we continue to view the commodities market as navigating between the currently balanced or tight physical markets and the threat that the European debt crisis could in the near future cause a global economic recession, which would lead to a sharp drop in demand. The oil market is pricing at a discount to clear the physical markets and drawing down inventory cover in anticipation of a potential sharp drop in oil demand in the near future. This de-stocking is further tightening the physical markets and leaving the oil market increasingly vulnerable should oil demand prove better than expected, or supply disappoint. These forecasts reflect our view that crude oil prices will need to continue to rise in order to slow demand growth, restraining oil demand in line with limited supplies, even in a relatively poor economic growth environment. For 2012, we believe that the risk is skewed to the upside. However, when we reach the point where demand destruction  has balanced the market a retracement back to lower levels is expected.

Our macroeconomic forecast remains supportive with commodity markets managing to avoid a global economic recession. Economists have lowered their forecast for 2012 world economic growth to approximately 3.2% (from 3.5%) and introduced a 2013 forecast of approximately 4%. This reduced outlook for world economic growth, while not forecasting a global recession, makes it more likely that the commodities market can maintain the central course embedded in our forecasts.

Our central forecast in gold remains constructive as our long term view targets $2,500 in 2012. Until we see USD weakness and any associated inflationary expectation we may not see gold significantly higher unless there is further geopolitical unrest (Iran, EU, etc…). Our core view is that gold will head higher to the $2,500 range driven by consequential USD weakness once the EU crisis dissipates and the US steps into the limelight. A weaker USD is not undesirable in the world order as everyone (especially China) understands that the US consumer is the driver for global consumer confidence and consequential consumption led demand. Disturbing any improvements in the US growth economy will hurt all of the global trade partners so the Fed will be inclined to protect US competitiveness and growth via USD management. Throughout 2012 I think we will see various currency devaluations across the globe, as individual nations try to reduce the debt burden and also attempt to  increase competitiveness in order to pull out of the recent recession. This debasement in currencies lends well for gold to increase in importance as a store of wealth.

So how do we make returns in such an environment? Our core views will not change often, but our timing, sizing and hedging pattern will become more frequent to take advantage of the volatile market conditions. We have mentioned many times to investors that our strategy puts emphasis on the “path” as well as the “destination” of commodity prices and that market’s seldom move in a straight line. This seems set to continue in 2012 where we continue to see a “tug of war” between physical fundamentals and macroeconomic events. Overall we are not long term bearish commodities. It is still a buy on dips world. The bears in the world will concentrate on three main subjects: lacklustre demand, a hard landing in China and Europe disappearing in a puff of smoke. We do not subscribe to this boundary condition. Demand has the potential to surprise on the upside and we are already seeing better economic numbers coming from the US. Also, commodities are about  demand vs.  supply and we do not need incredible demand when there are worse supply issues in key commodities. Europe is not going to be a quick fix but a long process taking several years. The key is consensual agreement and execution of this process which will neutralise the vast amount of fear and uncertainty priced in currently. When the US agreed on their course of action in early 2009 a risk taking sentiment unfolded. Once the EU agrees and implements their plan we may see similar benefits. China has managed its’ economy very well, containing price inflation and has now slowly taken the foot off of the brake. Overall this creates a picture that, albeit volatile, should trend higher over the course of the next twelve months.

We at Duet Commodities Fund wish you great success in 2012 and look forward to another year of working together.

Yours Sincerely

Continue reading »]]> Yields of 1 Yr Greek bonds is now above 400% which means if you invest in Greek bonds now, you will get five times your money next year. But, even at such high yields, there are more sellers of the Greek bonds than the buyers today. That means investors are almost certain that Greek wouldn’t survive the severe breakdown of Greek economy in one year. This does not mean that investors wont get their money back. Its just that they would get their money back after axed principle which might be between 50% to 75% haircut or if Greece leaves EU and eventually devaluates its currency, their might not be even 75% of the value of investment left after that. So, that is preciously the reason why even 2×400% yield is meaningless here.

Continue reading »]]> Mahindra & Mahindra has launched a US television campaign to publicise its claim to be the world’s largest tractor maker by volume – a milestone for the Indian industrial conglomerate – overtaking John Deere,http://ftalphaville.ft.com/thecut/2012/01/09/824351/mahindra-hits-milest…

Royal Bank of Scotland is determined to press ahead with plans to pay out promised bonuses to investment bank boss John Hourican and other top staff, says the FT. The newspaper reported on Monday that RBS investment banking boss Mr Hourican is in line for a £4m payout under the terms of a deferred grant of shares from 2009, http://ftalphaville.ft.com/thecut/2012/01/10/824691/rbs-to-press-on-with…

The Securities and Exchange Commission has warned that US financial institutions’ disclosures have been “inconsistent in both substance and presentation”, specifically regarding sovereign debt exposure and financial and non-financial debt exposure, http://ftalphaville.ft.com/thecut/2012/01/10/824421/sec-asks-for-more-in…

Negotiations on a new European treaty to reinforce budget discipline in the eurozone are making rapid progress and there is “a good chance” of reaching agreement by the end of January, according to Angela Merkel,http://ftalphaville.ft.com/thecut/2012/01/10/824581/merkel-hails-eurozon…

UK banks are rapidly withdrawing from far-flung overseas businesses and other divisions considered superfluous to their strategies, says the FT. Lloyds Banking Group has appointed Rothschild to helphttp://ftalphaville.ft.com/thecut/2012/01/10/824451/lloyds-rbs-withdraw-…

Alcoa, one of the world’s largest aluminium companies, has highlighted the impact of the European debt crisis on corporate profits, reporting its first quarterly loss on an underlying basis since 2009 and announcing plant closures and cutbacks in Italy and Spain, http://ftalphaville.ft.com/thecut/2012/01/10/824441/european-crisis-forc…

Tokyo Electric Power fell as much as 12 per cent after the Nikkei newspaper said the government may buy common shares to take control of the utility, reports Bloomberg. The stock fell to 153 yen, the lowest intra-day price since June 9 last year. http://ftalphaville.ft.com/thecut/2012/01/10/824431/reports-japan-govern…

Fresh evidence of strain in eurozone financial markets in the shape of negative yields on German short-term debt weighed on Wall Street on Monday, the FT reports. In a sign that traders remain keen to seek safety for their capital, http://ftalphaville.ft.com/thecut/2012/01/09/824281/traders-cautious-aft…

The euro retraced from a 16-month low on Monday against the dollar, Reuters reports, as markets are await any announcements from a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy in Berlin. http://ftalphaville.ft.com/thecut/2012/01/09/822921/euro-bounces-off-low…

Wsj.com
Asian stock markets were higher Tuesday amid growing optimism the U.S. economic recovery was gaining fresh momentum, with improved earnings expectations for tech companies supporting the Seoul market, while shares in China advanced on moves by Beijing to open up its capital markets further to foreign investors. Japan’s Nikkei Stock Average rose 0.5%, Australia’s S&P/ASX 200 gained 1.1% and South Korea’s Kospi Composite was 1.7% higher. Hong Kong’s Hang Seng Index gained 0.6%, China’s Shanghai Composite rose 1.5% and India’s Sensex added 1.3%. Dow Jones Industrial Average futures were up 28 points in screen trade. http://online.wsj.com/article/SB1000142405297020412420457715157309149584…

Consumer borrowing leapt as holiday spending kicked in late last year, according to a new Federal Reserve report that hinted the era of household debt reduction that has held the economy back for years might be entering a new, milder phase. The Fed said Monday that household borrowing on credit cards, car loans, student loans and other kinds of installment debt rose at a 9.9% seasonally adjusted annual rate in November, the fastest monthly increase since November 2001. That was when the economy was bouncing back from the Sept. 11 terror attacks and Detroit car companies were rolling out zero-percenthttp://online.wsj.com/article/SB1000142405297020425750457715118206385400…

UniCredit SpA’s €7.5 billion ($9.6 billion) capital increase got off to a shaky start Monday after the bank’s shares fell sharply, bringing the stock’s total decline to more than 44% in the last four trading sessions and putting pressure on the rights issue. UniCredit shares were recently down €0.27 or 10.5% at €2.29, the biggest loser among European financial stocks. They were sharply underperforming the Stoxx Europe 600 banks index, which was down slightly. Shares in its Turkish joint venture, Yapi Kredi, also fell because of the negative start to the rights issue offer, traders said.http://online.wsj.com/article/SB1000142405297020412420457715036154957719…

Weaker-than-expected industrial output in November indicate Germany is heading toward a cooler period, but experts say the euro-zone’s largest economy will avoid a deep recession and might escape a slump altogether if private demand and exports pick up the slack. Also out Monday were encouraging data showing Germany’s trade surplus widened in November and exports increased on a monthly basis, suggesting trade might have benefited fourth quarter economic output. In adjusted terms, industrial output decreased 0.6% in November, after rising 0.8% in October, the German economics ministry said Monday.http://online.wsj.com/article/SB1000142405297020412420457714994134840754…

After laying dormant for years, political risk in Russia is back, and that has some investors going cold on the ruble. Russia’s currency has weakened by 3% against the dollar since the largest protests of the post-Soviet Union era erupted following disputed parliamentary elections held Dec. 4. The ruble began 2011 as one of the world’s best-performing currencies, thanks to its dual characteristics: It is the currency of a commodity-producing nation and of an emerging market. Before the elections, which observers say were riddled with ballot-box stuffing and other violations, the ruble was bouncing back from a late-summer selloff across riskier assets, thanks to rising oil prices. Russia is the world’s second-largest crude-oil exporter.http://online.wsj.com/article/SB1000142405297020343690457715108172303840…

Marketwatch.com
It’s not yet time for conservative investors to get back into the stock market — but it could be close. That’s the message of a stock timing model that keys off the CBOE’s Volatility Index. In its simplest form, the model calls for going to cash whenever the VIX rises above its median level of just shy of 20, and staying there until the VIX drops back below. A buy signal could be close at hand, however: The VIX is now back to the low 20s — and could easily drop below its long-term median in the next week or two.  http://www.marketwatch.com/story/cash-is-still-king-at-least-for-now-201…

Treasury prices rose for a second day on Monday, pushing yields down slightly, keeping benchmark securities in a narrow range as traders look to Europe and other markets for direction. Bonds turned up in mid-morning action as U.S. stocks lost early gains, but have stayed up even as equities turned around.  Yields on 10-year notes , which move inversely to price, fell 1 basis points to 1.96%, after rising to 1.99% before Wall Street opened. A basis point is one one-hundredth of a percentage point.  http://www.marketwatch.com/story/treasurys-slip-on-merkel-sarkozy-commen…

Bloomberg.com
Oil rose in New York for the first time in four days before a meeting of European leaders to tackle the European debt crisis. OPEC can’t intervene against Western plans to block Iranian oil, Venezuela said. Futures rose as much as 0.5 percent as Germany’s chancellor prepared to meet the International Monetary Fund’s managing director today in Berlin. The Organization of Petroleum Exporting Countries can’t get involved in a dispute between the U.S. and Iran over sanctions, Venezuela’s oil minister Rafael Ramirez told reporters yesterday in Caracas. http://www.bloomberg.com/news/2012-01-09/oil-trades-near-lowest-this-yea…

Turkiye Halk Bankasi AS  told Indian oil refiners it may no longer be able to act as an intermediary for their purchases of Iranian crude, four people with knowledge of the matter said. Executives from the crude-processing companies met with Indian oil ministry officials yesterday to discuss alternatives, including routing remittances through Russia, the people said, declining to be identified because the information is confidential. Other options include stopping purchases from Iran altogether and importLLHPCLing from other countries, they said. Indian officials are scheduled to visit Tehran for trade talks starting Jan. 16, two of the people said.http://www.bloomberg.com/news/2012-01-09/india-said-to-be-told-turkey-ma…

Cnbc.com
Chief executives and analysts have lowered expectations by so much for earnings reporting season, stocks may continue their 2012 gains as results come in higher than expected. A fifth of the companies in the S&P 500 have come out with negative warnings about fourth quarter results, compared to just 30 with positive preannouncements, according to Thomson Reuters. This three-to-one ratio is the most negative since the heart of the recession in 2008. http://www.cnbc.com/id/45931965

The U.S. is in a "mild recovery" that is "broad and strengthening," JPMorgan Chase CEO Jamie Morgan told CNBC Monday. "When you look at all the sectors — corporate, middle market, business, consumer — for the most part they’re better than they were a year ago, and we even think housing is near the bottom if you look at rental prices, supply and demand, household formation," Dimon said. "So I hope we have a growing economy."http://www.cnbc.com/id/45932717

The soaring national debt has reached a symbolic tipping point: It’s now as big as the entire U.S. economy. The amount of money the federal government owes to its creditors, combined with IOUs to government retirement and other programs, now tops $15.23 trillion. That’s roughly equal to the value of all goods and services the U.S. economy produces in one year: $15.17 trillion as of September, the latest estimate. Private projections show the economy likely grew to about $15.3 trillion by December — a level the debt is likely to surpass this month.http://www.cnbc.com/id/45928149

BBC.co.uk
A general strike in Nigeria over the elimination of a fuel subsidy has brought the country to a standstill. Shops, offices, schools and petrol stations around the country closed on the first day of an indefinite strike. In Lagos and other cities, thousands marched against the removal of the subsidy, which has doubled fuel costs. Police fired on protesters in Kano in the north, reportedly killing two and wounding many. Another demonstrator died in a clash with police in Lagos. http://www.bbc.co.uk/news/world-africa-16464922

Telegraph.co.uk
Angela Merkel has warned that German support for the financial transaction tax (FTT) is not guaranteed, in a move that could open up a rift with France just days before the next European summit. The German Chancellor said she supported French President Nicolas Sarkozy’s demand to introduce the controversial tax but that her government was split. "We don’t have an agreement on this within the government, but personally I will campaign for [the tax]," she said.  http://www.telegraph.co.uk/finance/financialcrisis/9003618/Germanys-stan…

Increased immigration has had nothing to do with rising unemployment in the UK, even during the recession, a think-tank concluded in a new report. The number of migrant workers coming to the UK over the past decade has had little or no impact on joblessness, with "no association" between rising immigration and an increase in Jobseeker’s Allowance claims, the study by the National Institute of Economic and Social Research (NIESR) found.  http://www.telegraph.co.uk/finance/jobs/9003320/Immigrants-are-not-causi…

The Government must act now to repair the blow to business confidence dealt by the eurozone debt crisis, or risk an even greater setback for Britain’s ailing economy, the British Chambers of Commerce warned. The BCC said in its latest quarterly survey that although a technical recession with two successive quarters of negative growth was "not a foregone conclusion", at least one quarter of contraction was very likely in the first half of 2012. "Britain’s economy is at a critical stage – and now is not the time to shy away from the radical decisions needed to inspire confidence and increased investment for years to come," said John Longworth, the BCC’s director general. http://www.telegraph.co.uk/finance/economics/9003466/UK-economy-likely-t…

Guardian.co.uk
Retail sales in December up 4% as bargain hunters piled into shops. British Retail Consortium said December was the best trading month of the year with a dazzling pre-Christmas week of trading. A rush to the shops to snap up bargains in the last days before Christmas provided shops and stores with one of their best trading months of 2011 in December, the British Retail Consortium said on Tuesday.http://www.guardian.co.uk/business/2012/jan/10/retail-sales-up-december

Smh.com.au
Oil traded near the lowest price in more than a week in New York as investors speculated that increasing US crude stockpiles and signs of weakening growth in Europe indicate fuel demand may falter. Crude for February delivery was at $US101.46 a barrel, up 15 cents, in electronic trading on the New York Mercantile Exchange at 12:26 p.m. Sydney time. The contract yesterday slipped 0.3 per cent to $US101.31, the lowest close since Dec. 30. Prices rose 8.2 per cent in 2011, the third annual increase.
http://www.smh.com.au/business/markets/oil-nears-oneweek-low-20120110-1p…
Gold traded flat on Monday, moving in tandem with equities and riskier assets, as investors focused on technical resistance and kept fretting about the euro zone debt crisis. The precious metal’s moves mirrored the euro and S&P 500 US stock index, which also rose early and then gave up gains to trade nearly unchanged. Gold faces technical resistance at its 200-day moving average at $US1633 an ounce, after a late December sell-off that briefly sent it into a bear market, analysts said.  http://www.smh.com.au/business/markets/gold-trades-flat-as-investors-fre…

Hungary’s plunging bonds and falling currency pushed Prime Minister Viktor Orban into his first major U-turn in office in order to return to the negotiating table with the International Monetary Fund. The risk of the country failing to reach an agreement with the lender sent the forint last week to a record low, pushed default risk to a record high and lifted government borrowing costs to the highest level since 2009. Talks for Hungary’s second bailout in four years broke down last month as the government refused to alter a central bank law that the EU said threatens the monetary authority’s independence.http://www.smh.com.au/business/world-business/hungary-runs-out-of-option…

Xinhuanet.com
China’s booming online gaming market raked in 42.85 billion yuan (6.79 billion U.S. dollars) in 2011, a 32.4-percent year-on-year increase, officials said. Of the total revenue, domestically developed games took the lion’s share of 63.4 percent (27.15 billion yuan), up 40.7 percent year-on-year, said Sun Shoushan, deputy head of the General Administration of Press and Publication, at an annual symposium on digital gaming. The mobile gaming industry also reported rapid growth in China, with revenues up 86.8 percent to 1.7 billion yuan in 2011, said Sun.http://news.xinhuanet.com/english/business/2012-01/10/c_131352364.htm

Cs.com.cn
Property prices in China will continue to decline in the first half of the year before gradually stabilizing in the second, and real estate investment will plummet, industry analysts said on Monday. A property fair on Jan 1 in Haikou city, Hainan province, attracts a lot of potential consumers. Industry insiders say the value of property sales and prices will come under huge pressure this year, but a sharp decline is unlikely."The economic slowdown, increased capital pressure on property developers and the growing supply in the market all point to a further fall in home prices this year, especially in the first six months," said Yue Sen, a researcher with REICO, a research institution affiliated with China Real Estate Chamber of Commerce.http://www.cs.com.cn/english/ei/201201/t20120110_3202893.html

Thehindu.com
“We are in a more dangerous situation than in 2008,” said George Soros, Chairman of prominent hedge fund Soros Fund Management, here on Monday, referring to the ongoing crisis in the eurozone. “We now face the prospect of a deflationary vicious circle, which is going to affect the real economy, the morning after a 25-year long party of leveraging,” said Mr. Soros, while participating in a conversation with Anurag Behar, Vice-Chancellor, Azim Premji University, and CEO, Azim Premji Foundation. Creditor nations such as Germany, he said, “are calling the shots by dictating the rules of a draconian austerity” programme in Europe.http://www.thehindu.com/business/Economy/article2789649.ece

Economictimes.com
The relative economic decline of the US has led many economists and policymakers to question the US dollar’s position as the world’s anchor currency. Suggested alternatives range from a global reserve system to even a return to gold. While recent efforts to internationalise the Chinese yuan have only added to the expectation of a shift in the international monetary system, we believe the US dollar will remain the dominant global currency for a long time to come. http://economictimes.indiatimes.com/opinion/comments-analysis/us-dollar-…

Yonhapnews.co.kr
South Korea’s exports of automobiles surged 13.7 percent on-year to a new high last year on brisk shipments to Europe and Asian countries, the government said Tuesday.
The country shipped a total of 3,151,930 cars in 2011, compared with 2,772,107 vehicles exported a year earlier, according to the Ministry of Knowledge Economy.http://english.yonhapnews.co.kr/business/2012/01/10/0501000000AEN2012011…
Fin24.com
Opec will not get involved in the standoff between Iran and Western powers over its nuclear programme, Venezuela’s oil minister said on Monday during an official visit by Iran’s president to Venezuela. The Islamic Republic is facing toughened sanctions by the United States meant to force a halt to its uranium enrichment program, which Washington says is aimed at creating weapons. Iran insists its nuclear program is peaceful.http://www.fin24.com/Markets/Commodities/Opec-not-getting-involved-in-Ir…

Tehrantimes.com
The huge gas field, named Sardar Jangal, which has been recently discovered in Iran’s territorial waters in the Caspian Sea, has the capacity to produce 880,000 barrels per day (bpd) of crude oil, MP Asadollah Abbasi told the Fars news agency. Ali Osouli, managing director of Khazar Oil Company, announced in December 2011 that “the field holds an estimated 8 billion barrels of crude oil.”  “An exploratory well has been drilled in the gas field to give new details on its hydrocarbon reserves,” the Shana new agency quoted Osouli as saying.http://tehrantimes.com/economy-and-business/94386-irans-sardar-jangal-ga…

Iran plans to connect its national power electricity grid to Russia by the next calendar year which will end on March 20, 2013, Iran power generation transmission and distribution management company (TAVANIR) managing director stated. Iran will exchange up to 15 billion kilowatt hours (BkWh) of electricity with its neighboring countries by the end of the current year, up 50 percent year on year, Homayoun Haeri added, the Mehr news agency reported http://tehrantimes.com/economy-and-business/94385-iran-plans-to-connect-…

Thetrader.se
Last year we saw huge volatility in the market, still the index closed practically speaking flat. Big volatility is scaring ordinary people out of the market. The prospects going forward, with the HFT still growing, look similar to last year. Much ado about nothing, or? From The New Yorker; In other words, while crazy volatility may be great for traders (who live for the chance to make two per cent a day), it’s lousy for the rest of us, and for the economy as a whole. It isn’t just that volatility costs ordinary investors money http://www.thetrader.se/2012/01/10/human-nature-and-volatility/

Continue reading »]]> Europe is falling into recession and it is evident from every new data release that comes up. Following today’s release of European manufacturing PMI data we are sadly no closer to getting any resolution on which way the great US-European divergence will compress. Because all we learned is that, very much as expected, Europe managed to contract for a fifth month in a row, with the average PMI in Q4 2011 the weakest since Q2 2009, essentially guaranteeing a sharp recession once the manufacturing slow down spills over to GDP. The only silver lining was that the contraction across the continent was modesty better than expected, however if this merely means that the band aid is being pull off slowly and painfully instead of tearing it off is up for question.

The released December manufacturing PMIs were as follows:

• Italy: 44.3 vs 44.0 previously, exp. 43.8
• France: 48.8 vs 47.3 previously, exp. 48.7
• Germany: 48.4 vs 47.9 previously, exp. 48.1
• Greece: 42.0 vs 40.9, nobody cared about expectations as the economy is total free fall

And the consolidated Eurozone PMI number came at 46.9, just a tad higher than the 46.4 in November, and in line with expectations.

The worst news, as Reuters reports below, is that New Orders are dropping at a faster pace than output cut, meaning the contraction is back end loaded and more deterioration is imminent.

But first visually, Europe’s Industrial Production is still lagging the slowdown in manufacturing. Expect this compression to also collapse, likely in an adverse fashion.

Continue reading »]]>  

The following are 50 economic numbers from 2011 that are almost too crazy to believe….

#1 A staggering 48 percent of all Americans are either considered to be "low income" or are living in poverty.

#2 Approximately 57 percent of all children in the United States are living in homes that are either considered to be "low income" or impoverished.

#3 If the number of Americans that "wanted jobs" was the same today as it was back in 2007, the "official" unemployment rate put out by the U.S. government would be up to 11 percent.

#4 The average amount of time that a worker stays unemployed in the United States is now over 40 weeks.

#5 One recent survey found that 77 percent of all U.S. small businesses do not plan to hire any more workers.

#6 There are fewer payroll jobs in the United States today than there were back in 2000 even though we have added 30 million extra people to the population since then.

#7 Since December 2007, median household income in the United States has declined by a total of 6.8% once you account for inflation.

#8 According to the Bureau of Labor Statistics, 16.6 million Americans were self-employed back in December 2006.  Today, that number has shrunk to 14.5 million.

#9 A Gallup poll from earlier this year found that approximately one out of every five Americans that do have a job consider themselves to be underemployed.

#10 According to author Paul Osterman, about 20 percent of all U.S. adults are currently working jobs that pay poverty-level wages.

#11 Back in 1980, less than 30% of all jobs in the United States were low income jobs.  Today,more than 40% of all jobs in the United States are low income jobs.

#12 Back in 1969, 95 percent of all men between the ages of 25 and 54 had a job.  In July, only81.2 percent of men in that age group had a job.

#13 One recent survey found that one out of every three Americans would not be able to make a mortgage or rent payment next month if they suddenly lost their current job.

#14 The Federal Reserve recently announced that the total net worth of U.S. households declined by 4.1 percent in the 3rd quarter of 2011 alone.

#15 According to a recent study conducted by the BlackRock Investment Institute, the ratio of household debt to personal income in the United States is now 154 percent.

#16 As the economy has slowed down, so has the number of marriages.  According to a Pew Research Center analysis, only 51 percent of all Americans that are at least 18 years old are currently married.  Back in 1960, 72 percent of all U.S. adults were married.

#17 The U.S. Postal Service has lost more than 5 billion dollars over the past year.

#18 In Stockton, California home prices have declined 64 percent from where they were at when the housing market peaked.

#19 Nevada has had the highest foreclosure rate in the nation for 59 months in a row.

#20 If you can believe it, the median price of a home in Detroit is now just $6000.

#21 According to the U.S. Census Bureau, 18 percent of all homes in the state of Florida are sitting vacant.  That figure is 63 percent larger than it was just ten years ago.

#22 New home construction in the United States is on pace to set a brand new all-time record lowin 2011.

#23 As I have written about previously, 19 percent of all American men between the ages of 25 and 34 are now living with their parents.

#24 Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.

#25 According to the Bureau of Economic Analysis, health care costs accounted for just 9.5% of all personal consumption back in 1980.  Today they account for approximately 16.3%.

#26 One study found that approximately 41 percent of all working age Americans either have medical bill problems or are currently paying off medical debt.

#27 If you can believe it, one out of every seven Americans has at least 10 credit cards.

#28 The United States spends about 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.

#29 It is being projected that the U.S. trade deficit for 2011 will be 558.2 billion dollars.

#30 The retirement crisis in the United States just continues to get worse.  According to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.

#31 Today, one out of every six elderly Americans lives below the federal poverty line.

#32 According to a study that was just released, CEO pay at America’s biggest companies rose by 36.5% in just one recent 12 month period.

#33 Today, the "too big to fail" banks are larger than ever.  The total assets of the six largest U.S. banks increased by 39 percent between September 30, 2006 and September 30, 2011.

#34 The six heirs of Wal-Mart founder Sam Walton have a net worth that is roughly equal to thebottom 30 percent of all Americans combined.

#35 According to an analysis of Census Bureau data done by the Pew Research Center, the median net worth for households led by someone 65 years of age or older is 47 times greater than the median net worth for households led by someone under the age of 35.

#36 If you can believe it, 37 percent of all U.S. households that are led by someone under the age of 35 have a net worth of zero or less than zero.

#37 A higher percentage of Americans is living in extreme poverty (6.7%) than has ever been measured before.

#38 Child homelessness in the United States is now 33 percent higher than it was back in 2007.

#39 Since 2007, the number of children living in poverty in the state of California has increased by 30 percent.

#40 Sadly, child poverty is absolutely exploding all over America.  According to the National Center for Children in Poverty, 36.4% of all children that live in Philadelphia are living in poverty, 40.1% of all children that live in Atlanta are living in poverty, 52.6% of all children that live in Cleveland are living in poverty and 53.6% of all children that live in Detroit are living in poverty.

#41 Today, one out of every seven Americans is on food stamps and one out of every fourAmerican children is on food stamps.

#42 In 1980, government transfer payments accounted for just 11.7% of all income.  Today, government transfer payments account for more than 18 percent of all income.

#43 A staggering 48.5% of all Americans live in a household that receives some form of government benefits.  Back in 1983, that number was below 30 percent.

#44 Right now, spending by the federal government accounts for about 24 percent of GDP.  Back in 2001, it accounted for just 18 percent.

#45 For fiscal year 2011, the U.S. federal government had a budget deficit of nearly 1.3 trillion dollars.  That was the third year in a row that our budget deficit has topped one trillion dollars.

#46 If Bill Gates gave every single penny of his fortune to the U.S. government, it would only cover the U.S. budget deficit for about 15 days.

#47 Amazingly, the U.S. government has now accumulated a total debt of 15 trillion dollars.  When Barack Obama first took office the national debt was just 10.6 trillion dollars.

#48 If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.

#49 The U.S. national debt has been increasing by an average of more than 4 billion dollars per day since the beginning of the Obama administration.

#50 During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.

Source: Ecopnomic Collapse Blog: