German Exports Increase More Than Forecast

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Outrage As Germany ‘Sells’ 200 Battle Tanks To Saudi Arabia


German Exports Increase More Than Forecast as Nation Weathers Euro Crisis (Bloomberg, July 8, 2011):

German exports increased more than economists forecast in May, adding to signs the sovereign debt crisis isn’t harming Europe’s largest economy.

Exports, adjusted for work days and seasonal changes, increased 4.3 percent from April, when they fell 5.6 percent, the Federal Statistics Office in Wiesbaden said today. Economists forecast a gain of 1.5 percent, according to the median of 12 estimates in a Bloomberg News survey. Imports rose 3.7 percent from the previous month.

Read moreGerman Exports Increase More Than Forecast

China’s Trade Surplus Climbs To Record in June, Up 140% From Last Year

wang-qing_morgan-stanley
Wang Qing, Morgan Stanley’s chief economist of greater China, estimates the yuan will gain 4 percent by the end of this year and 6 percent next year. (Bloomberg)

China’s trade surplus widened to the highest this year and exports climbed more than estimated to a record in June, adding pressure on the government to let the currency gain after the U.S. said the yuan “remains undervalued.”

The gap increased 140 percent to $20.02 billion from a year earlier, the nation’s customs bureau said yesterday. That compares with the $15.6 billion median estimate of 24 economists Bloomberg News surveyed. Exports surged 44 percent and import growth moderated for the third month, rising 34 percent.

U.S. Treasury Secretary Timothy F. Geithner said July 8 he will “closely” monitor the yuan’s appreciation after China scrapped a two-year peg to the dollar and allowed a 0.8 percent advance in the past three weeks. Policy makers in the world’s biggest exporting nation may be reluctant to step up gains while Europe’s debt woes threaten demand, even as the bureau said trade has “recovered” to levels before the global crisis.

Read moreChina’s Trade Surplus Climbs To Record in June, Up 140% From Last Year

China clamps down on exports of rare earth elements crucial to green technology

Mining those rare earth elements destroys nature:

Earth-Friendly Elements, Mined Destructively (New York Times)

china-rare-earth-metals


Neodymium is one of 17 metals crucial to green technology. There’s only one snag – China produces 97% of the world’s supply. And they’re not selling

neodymium-magnet
A neodymium magnet, commonly used in motors, loudspeakers and other appliances. Neodymium is a rare earth element

Britain and other Western countries risk running out of supplies of certain highly sought-after rare metals that are vital to a host of green technologies, amid growing evidence that China, which has a monopoly on global production, is set to choke off exports of valuable compounds.

Failure to secure alternative long-term sources of rare earth elements (REEs) would affect the manufacturing and development of low-carbon technology, which relies on the unique properties of the 17 metals to mass-produce eco-friendly innovations such as wind turbines and low-energy lightbulbs.

China, whose mines account for 97 per cent of global supplies, is trying to ensure that all raw REE materials are processed within its borders. During the past seven years it has reduced by 40 per cent the amount of rare earths available for export.

Industry sources have told The Independent that China could halt shipments of at least two metals as early as next year, and that by 2012 it is likely to be producing only enough REE ore to satisfy its own booming domestic demand, creating a potential crisis as Western countries rush to find alternative supplies, and companies open new mines in locations from South Africa to Greenland to satisfy international demand.

Amid claims that Beijing is using its rare earths monopoly as a tool of foreign policy, the British Department of Business, Industry and Skills said it was “monitoring” the supply of REEs to ensure China was observing international trade rules.

Jack Lifton, an independent consultant and a world expert on REEs, said: “A real crunch is coming. In America, Britain and elsewhere we have not yet woken up to the fact that there is an urgent need to secure the supply of rare earths from sources outside China. China has gone from exporting 75 per cent of the raw ore it produces to shipping just 25 per cent, and it does not consider itself to be under any obligation to ensure supplies of rare earths to anyone but itself. There has been an effort in the West to set up new mines but these are five to 10 years away from significant production.”

Read moreChina clamps down on exports of rare earth elements crucial to green technology

U.S. responsible for 68.4 % of all global arms sales

WASHINGTON — Despite a recession that knocked down global arms sales last year, the United States expanded its role as the world’s leading weapons supplier, increasing its share to more than two-thirds of all foreign armaments deals, according to a new Congressional study.

The United States signed weapons agreements valued at $37.8 billion in 2008, or 68.4 percent of all business in the global arms bazaar, up significantly from American sales of $25.4 billion the year before.

Italy was a distant second, with $3.7 billion in worldwide weapons sales in 2008, while Russia was third with $3.5 billion in arms sales last year — down considerably from the $10.8 billion in weapons deals signed by Moscow in 2007.

The growth in weapons sales by the United States last year was particularly noticeable against worldwide trends. The value of global arms sales in 2008 was $55.2 billion, a drop of 7.6 percent from 2007 and the lowest total for international weapons agreements since 2005.

Read moreU.S. responsible for 68.4 % of all global arms sales

China: Credit tightening threatens ‘giant Ponzi scheme’

Baltic Exchange Dry Index (BDI)

20 day exponential average in red.

200 day exponential average in green.

bdi

I expect the next leg down in the markets any time soon.

After all those banks have invested their bailout/taxpayer money in the stock market it is about time that investors are coming back to their senses and take a look at the fundamentals, realizing that the Fed and the US government have just created another even bigger bubble. Now we have even several bubbles that are about to burst.

The biggest Ponzi scheme in the world is run by the Federal Reserve and not by China.

The Baltic Dry Index is an excellent indicator, because it can’t be (that easily) manipulated.

China is also in trouble, partly because it has also applied the dead wrong US bailout/stimulus policies, but when the world realizes that the US has entered into the Greatest Depression, China – or better China’s elite – will greatly benefit from that.
The people will of course suffer.

China has effectively ‘written off’ its investment in US Treasuries. China is not stupid.

Be prepared.

(Note: This is not an investment advice.)


China’s loan growth plunged in July while exports fell 23pc from a year ago after grinding lower for nine months as consumers in the West tighten their belts further.

Labourers work on a scaffolding at a construction site in Wuhan
Can the world rely on China’s growth miracle to power recovery?

The data raise fresh doubts about the strength of global trade and whether the world can rely on China’s growth miracle to power recovery.

Separately, the Baltic Dry Index – measuring freight rates for bulk goods – has tipped over, dropping 25pc since late July. The shipping figures buttress reports that China has stopped building up stocks of metals and other commodities after a spate of frantic buying over the early summer.

(China does not have stopped building up stocks of metals and other commodities. It is also buying mining companies or at least stakes in them.
Coal Miner in Australia Agrees to Chinese Bid (New York Times)
China Hunger for Australia’s Minerals Undeterred by Hu Dispute (Bloomberg)
That trend will continue, because it is China’s best way to diversify itself further away from the soon to be worthless US dollar. 🙂 )

China’s central bank said loan growth fell to $52bn (£31bn) from $248bn a month earlier, although it is too early to tell whether Beijing has begun to rein in credit after the explosion of bank loans in the first half of the year.

The loan figures are being watched closely by analysts and traders in the City. Excess liquidity in China has been a key driver of global markets since the rally began in March.

Beijing is walking a tightrope by trying to offset the collapse in exports – almost 40pc of GDP – with an investment blitz in roads, railways, and industry through state-owned companies.

The real economy cannot absorb the money, so it is leaking into asset speculation. The central bank estimates that 20pc of fresh credit has ended up in equity markets. The Shanghai index is up 80pc this year, though profits have fallen by almost a third. The pattern echoes the final phase of Japan’s Nikkei bubble in 1989.

“China is a big fat tail risk for world markets,” said Hans Redeker, currency chief at BNP Paribas. “Shanghai equities have reached the same extreme as in late 2007. The country will have to cut credit growth, and when this happens, Shanghai equities and commodities will suffer. That is what could bring this global rally to a halt.”

China Construction Bank, the number two lender, is cutting loans by 70pc over the second half of the year. “We noticed that some loans didn’t go into the real economy. Housing prices are rising too fast,” said the bank’s president, Zhang Jianguo.

Andy Xie, a leading consultant, said China’s boom was a “giant Ponzi scheme” that was likely to “bring very bad consequences” for the country.

“The stock market is in a final frenzy again. The most ignorant retail investors are being sucked in by rising momentum,” he said. Equities are overvalued by 50pc to 100pc.

Read moreChina: Credit tightening threatens ‘giant Ponzi scheme’

Japan: Economy contracts at record pace; Nikkei index breaches the 10,000 mark

“Japan’s exports have fallen by about a third of the levels recorded last year.”

“Factories are running at about a half of their full capacity and analysts are cautioning that the boost provided by Japan’s own stimulus efforts could wane as the year progresses.”


Japan’s economy contracted at a record pace in the first three months of the year, but the rate of decline was less than initial estimates suggested, pushing the Nikkei index through the 10,000 mark for the first time since October.

Gross domestic product (GDP), which is a key measure of a country’s economic strength, shrank by an annualised pace of 14.2 per cent — the worst on record since comparable data were first kept in 1955.

However, today’s revised figure for the first quarter is less than the 15.2 per cent originally reported, sending the Nikkei to 10,022.23 before it closed at 9,981.33.

Read moreJapan: Economy contracts at record pace; Nikkei index breaches the 10,000 mark

Finance Minister Steinitz: Economy in ’emergency situation’

The economy faces an “emergency situation,” Finance Minister Yuval Steinitz warned on Monday, while urging lawmakers to support the government’s draft budget, as Israeli exports plunged 32 percent in the first four months of this year

yuval-steinitz
FINANCE MINISTER Yuval Steinitz (left) said at a meeting of the Knesset Finance Committee that the sharp decline in exports was ‘especially worrying.’ Photo: Ariel Jerozolimski

Gross domestic product shrank an annualized 3.6% in the first quarter, the Central Bureau of Statistics said on Sunday, demonstrating the “depth” of the crisis, Steinitz told the Knesset Finance Committee in Jerusalem. Export figures, which showed a 46% annualized decline, are “especially worrying,” he said.

“Whoever hasn’t understood until now how bad the crisis is, ought to understand now,” he said. “We are truly in an emergency situation.”

Read moreFinance Minister Steinitz: Economy in ’emergency situation’

Japan Exports Drop Record 49% as Global Slump Deepens


Vehicles bound for shipment wait in a lot in Kawasaki City, Kanagawa Prefecture, Japan on Jan. 16, 2009. Photographer: Haruyoshi Yamaguchi/Bloomberg News

March 25 (Bloomberg) — Japan’s exports plunged a record 49.4 percent in February as deepening recessions in the U.S. and Europe sapped demand for the country’s cars and electronics.

Shipments to the U.S., the country’s biggest market, tumbled an unprecedented 58.4 percent from a year earlier, the Finance Ministry said today in Tokyo. Automobile exports tumbled 70.9 percent.

The collapse signals gross domestic product may shrink this quarter at a similar pace to the annualized 12.1 percent contraction posted in the previous three months, the sharpest since 1974. Prime Minister Taro Aso is compiling his third stimulus package as companies from Toyota Motor Corp. to Panasonic Corp. fire thousands of workers.

Read moreJapan Exports Drop Record 49% as Global Slump Deepens

Ukraine and Lativia warn of financial disaster in the West if they are not helped

Western European banks are exposed to over £1 trillion of eastern European debt, leading to comparisons with the subprime crisis in the United States. Austria is particularly affected, with an outstanding loan portfolio to eastern Europe of £213 billion, 71 per cent of GDP.

Even worse: ‘Toxic’ EU bank assets total £16.3 trillion (Telegraph)


Ukraine and Latvia have warned that Western Europe faces financial disaster unless it unites to help stricken countries in the former Soviet bloc.

Government officials from the two countries, which are at risk of bankruptcy as a result of the global financial crisis, told the Daily Telegraph that the European Union’s biggest powers were in danger of repeating the worst mistakes of the 1930s depression by retreating into isolationism and protectionism.

Grigory Nemyria, Ukraine’s deputy prime minister, said that the EU had to overcome bitter internal differences over how to deal with the economic crisis in eastern Europe when world leaders met next month at the G20 summit in England.

“The EU should not just be helping Ukraine because Ukraine is helpless,” Mr Nemyria said. “It should be doing so because it is in the EU’s self-interest.

“There is a high exposure in the [Western European] banking sector to Ukraine, Latvia etc that can only be addressed by acting in concert. The cost of inaction will be far greater than the cost of action.”

Read moreUkraine and Lativia warn of financial disaster in the West if they are not helped

Chinese exports tumble 25.7 percent

Isaac Meng, an economist with BNP Paribas in Beijing, said it was unrealistic to expect China to remain immune to what he called the sharpest drop in global trade in 80 years.


China succumbed to the global economic downturn as Chinese exports slid 25.7 percent from a year earlier.

Reuters – China’s exports tumbled in February as the world’s third-largest economy felt the full force of the global financial crisis, but capital spending accelerated with the help of the government’s massive stimulus package.

With the world experiencing its deepest recession in decades, pessimists said the slump in exports was unlikely to end soon. Some said China could even record a trade deficit before long.

Read moreChinese exports tumble 25.7 percent