Oldtent Archives 2007 - 2008

I think you will get your head handed to you.

U.K. Homeowners Raise Prices in `Wrong Tactic,’ Rightmove Says
By Svenja O’Donnell

May 19 (Bloomberg) — U.K. homeowners raised the prices of their properties this month because they are not “realistic” enough about the housing market, Rightmove Plc said.

The average asking price rose 1.2 percent from April to 242,500 pounds ($473,000), Britain’s most-used property Web site said in a statement today. Prices in London increased 0.2 percent. On the year, the cost of a U.K. home rose 2.2 percent.

“Not enough sellers are coming onto the market with realistic prices and it’s the wrong tactic for the current set of market conditions,” Miles Shipside, Rightmove’s commercial director, said in a Bloomberg Television interview. “There’s far fewer mortgages around, buyers are in more limited supply. It’s a tough market that’s likely to continue for some time.”

Home values dropped in April from a year earlier for the first time since 1996, indicators based on agreed selling prices show, and Bank of England Governor Mervyn King says they “likely to fall further.” Banks raised the cost of their most popular mortgages to an eight-year high last month, curbing lending and making property purchases harder to finance.

Homeowners raised prices the most in the South East of England, where the cost of a property rose 4.2 percent on the month. The East Midlands and East Anglia had the biggest declines, both with a 1.5 percent price drop on the month, Rightmove said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aPvSKR6Idcuc&refer=home

Boy, He’s really pissed.  I’ve been a Dines Letter subscriber for a number of years but that interview was a treat.  He’s passionate thats for sure but I’ve never heard him quite like that.  Maybe sour grapes on the pounding the market has delivered to his uranium picks???   I’m still holding them all and buying on the dips. 

What do I know……….I’m the Winedoc

PS:  I particularily liked

-”I’m not sure this country deserves to survive”

-Regarding POG…”You moron, don’t you realize you can’t stop it”

-”protect yourself” (francais)

-”Ive got all the money I need for the rest of my life, provided I don’t have to buy anything”

I’m sure looking forward to the post Tottsville commentary

Winedoc

I’m of the opinion that oil hits a high this week, most likely for the year. I think gold rallies early and then gets hammered (because of oil) into next week because it is Gold expiration. I’ll be shorting oil later this week and probably buy COMEX puts on gold.

The  3  of  them  put  on  the  finest  dining  that  u  find  in  a  top  notch  New York  restaurant .  The  food  and  host  were  indeed  the  finest. The  3 rd  person  was  Kyle , he  did  a  surpurb  job. All  of  u   should  plan  a  trip  up  there  for  one  of  these  parties , u  won’t  regret  it.  As  i  sit  and  write  this  sucking  down  lots  of  water. Fully  had  a  door  prize on  Sat.  and  everyone  threw  in  their  name  tags, Q  and  i  left  our  name  tags  at  hotel  and  son  tells  me  his  is  in  the  car, i  run  out  and  grab  it, and  fully  was  just  about  to  pick  the  name  and  i  yell  late  entry ,  and he  mixed  them  up  and  presto , cosmic  Jr. won.  Fully  he  all  ready  asked  to  use  the  old  fashion  saving  kit. We  alway’s  shave  together  on  friday’s  and  said  ok  to  use  it  tomorrow , have to pull it in, he  can’t  wait. Moe  gave  son  a  Canadian  flag , he  loves  it ,  Augirl  gave  him  a  bar  of  silver , u  were  all  very  kind  to  him , thank  you  all.

The  drive  up  would  have  been  impossible  without  the  Godfather’s  help. He  also  made  it  home  safe  in  the  rain , and  say’s  he  came  home  to  a  broken  puter , he’s  bummed. The  rain  was  on  our  bumper  the  whole  way  home  and  down  went  my  foot  to  beat  it.
It  took  us  11  hrs.  to  get  there , and  the  drive  was  worth  ever  second  spent  there. We  trimmed  the  time  home  to  9 1/2  hr.  Cosmic  had  the  pedal  down  on  the  way  home.  As  Vic  kept  saying , what  a  group.  I  asked  Irish  to  bring  me  back  a  3  pack  of  rum , what  does  he  do , he  brings  me  23  yr.  old  rum ,  yum , i  don’t  even  want  to  open  it , but  will.  We  thank  each  and  every  one  of  u  ,  and  best  wishes  to  the  happy  couple  who  got  engaged. If  i  forgot  any  one  I’ll  try  again  tomorrow,  i’m  beat .  Even  had  the  pleasure  to  drive  the  2  reps.  to  the  meeting  on  Sat. , all  alone  i   drilled  them  with   questions    to  answer,  and  even  got  a  copy  of  the  eye  of  the  pyramid , thanks TK . All  the  best  a  tired   CT,  a  job   Very  Well  Done  indeed .

JBI

CRAIG STEPHEN’S THIS WEEK IN CHINA

SOMBER OUTLOOK FOR MARKETS IN QUAKE AFTERMATH

Commentary: Look for safety in infrastructure, hope China’s luck changes

HONG KONG (MarketWatch) — The latest revelations of the damage and death toll from the Sichuan earthquake sets a somber tone for the markets.

An estimated 5 million homeless, up to 50,000 dead and stories of potential flooding from newly formed lakes, as well as safety concerns over China’s nuclear installations in the damaged province, all make for a worrying brew.

China certainly seems to be having a run of bad luck in its Beijing Olympics year. First came the worst snowstorms in 60 years, followed by the worst disturbances in Tibet in 20 years and now the worst earthquake in 58 years. The more superstitious will tell you that last week’s quake came on the Buddha’s birthday. It was a holiday in Hong Kong but not — unfortunately — in China, which could have spared more lives. This week will begin with three official days of mourning.

Despite the unfolding tragedy, money managers must still do their jobs. There has been some interest in defensive infrastructure and base materials stocks likely to benefit from rebuilding efforts. But there is also a general feeling equity risk is increasing as inflation and rising costs are exacerbated by the earthquake and its aftermath.

There are few problems for the makers of cement though, who look set to come out ahead thanks to the mass rebuilding efforts.

Anhui Conch Cement, China’s biggest producer of cement, has said it will accelerate new factories in Sichuan province to aid reconstruction efforts. Not only will rebuilding effort be needed, more cement will be used to make the buildings stronger and cement prices can be expected to rise.

Demand for reinforcing steel and other quake-proofing building materials are also likely to rise as authorities are expected to impose more stringent building standards after widespread instances of new building collapses, dubbed “tofu construction.” It was reported in Beichuan town for instance, 34 km from the epicenter, that only buildings built before 2000 were left standing while the rest collapsed.

IPOs have been scarce recently, although one company that looks to have timed its listing well is Asia cement Corp. It is due to debut in Hong Kong next week.

Infrastructure will remain a strong defensive theme as more funds are directed at rebuilding efforts. It’s already been reported that lenders in the quake zone will be freed from lending restrictions by the PBOC, which last week lifted the deposit reserve ratio to 16.5% in the ongoing inflation fight.

Banks, however, are likely to have one eye on liquidity issues as they assess potential bad loans from the disaster.

Another consequence of the earthquake is likely to be greater inflationary pressures, with higher prices not just in cement but foodstuffs and labor.

According to Moody’s rating agency, casualties could include some property developers who may see lower margins and sales hit.

Some brokers have also noted higher inflation is already eating away at the economy. The official GDP deflator went crazy in the first quarter, says Standard Chartered Bank, rising to 8.2%, up from 5% in third quarter 2007.

Also, while retail sales in April rose 22% year-over-year 814.2 billion yuan according to the National Bureau of Statistics, real growth is now slowing despite this strong headline number.

For many investors, rather than looking for value in the rebuilding, the earthquake is a signal to raise cash and sell despite various economists saying the damage in the context of China’s overall economy is not too serious. The quake hit less developed Sichuan after all, not Beijing or Shanghai, whose industrial output and gross domestic product account for only 4.2% and 2.5% of China’s overall output respectively.

Expectations there could be pent up selling pressure emerged from reports in local press that the China Securities Regulatory Commission told fund managers to support the stock market to avoid a sharp fall in the wake of the earthquake. This was believed to have included forbidding funds to sell.

China’s authorities have used a variety of often unorthodox measures to reshape economic forces, but trying to avert a stock market reaction to an 8 magnitude quake (it was upgraded from 7.8 over the weekend) may be asking too much.

Rogue trader Nick Leeson will tell you that trying to stop the market falling in a face on earthquake is a fool’s game. His losses famously brought down Barings bank after his bullish bets were undone by the Kobe earthquake in 1995.

On a brighter note, history does show stock market reactions to natural disasters will only be temporary. Apart from that, when it comes to acts of God, China must hope it’s due a run of better luck in the second half of 2008. Perhaps starting with the Beijing Olympics.

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Shanghai’s Stock Exchange Composite Index

AND

Hong Kong’s Hang Seng Index

JBI

V. PHANI KUMAR’S THIS WEEK IN INDIA

ECONOMY SQUEEZED BY INFLATION, PRODUCTION

COMMENTARY: CHALLENGES MOUNT AS GROWTH TAKES A KNOCK

HONG KONG (MarketWatch) — After two ill-timed negative surprises last week in the form of a surge in inflation and a tumble in industrial production, Indian investors in interest rate-sensitive and export-oriented sectors likely will be a worried lot this week.

There is pressure on the Reserve Bank of India and the government to respond, and although there are some calls for them to sit tight and let some of their recent remedies to take effect, others fear more policy measures and monetary tightening could be around the corner.

Official data released early last week showed growth in the country’s industrial output slowed to a miserable 3% year-over-year in March — compared to 14.6% in the year-ago period — less than half of what the street expected and a six-year low. A high statistical base for growth in the year-ago month, high interest rates and a cyclical softness in demand have been blamed for the slowdown.

Then on Friday, another official release showed wholesale price index-measured inflation jumped to 7.83% in the week ended May 3, proving wrong expectations of a slight moderation from the previous week, when the WPI accelerated 7.61%.

With global crude oil and other commodity prices staying firm, and general elections due in the country in less than a year, the government is deeply worried.

It isn’t difficult to understand the shock, as the two indicators have changed positions in just a few months.

Even so, economists broadly expect some improvement in the economic indicators pretty soon. Manufacturing activity, which contributed to the slowdown in the industrial output last month, contributes less than a fifth of the country’s services-dominated GDP.

Some relief is also expected on the inflation front as recent policy measures take effect. The RBI’s quarter-point increase in banks’ cash reserve ratio at its previous policy review meeting in April takes effect this week and will suck some more liquidity from the system.

The country’s commodities markets regulator has temporarily suspended futures trading in several agricultural commodities, which is yet to reflect in the prices. And the government has lowered import duties on some commodities, and either banned or restricted exporters of other commodities. Steel and cement makers reportedly cut prices earlier this month, despite input cost increases.

The government’s pressure tactics, which forced the steel and cement firms to lower prices temporarily, reflect the ruling coalition’s desperation and perhaps show it in poor light, but should work to curb price increases.

The central bank, meanwhile, is widely expected to leave interest rates alone in view of the slowing economic growth, and look at other policy tools to control inflation and money supply. One such tool is the U.S. dollar-rupee exchange rate, which has climbed sharply in the past two weeks on the greenback’s resurgence.

The dollar, which bought 40 rupees only a few weeks ago, is now closer to the 43-rupee level. However, exporters are unlikely to celebrate just yet. With soaring crude oil prices keeping inflation on a tight leash, the RBI is unlikely to let the local currency slide much further, and it may only be a matter of time before it finds a firm support.

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India’s Bombay Stock Exchange 30 Sensex Index

JBI

Jim Dines that is on heck of an eye opener.

Thanks for that unforgetable link.

Cheers

BANK OF JAPAN SEEN HOLDING LINE ON INTEREST RATES

HONG KONG (MarketWatch) — The Bank of Japan will convene its first policy board meeting in Tokyo on Monday since cutting its economic growth estimate and abandoning language calling for higher interest rates in its half-yearly outlook report.

Bank of Japan Governor Masaaki Shirakawa and the eight other policy-board members are widely expected to hold interest rates unchanged at 0.5%, the lowest among the Group of Seven nations.

Attention is expected to shift to the central bank’s monthly economic report, due to be released around mid-afternoon Tuesday following the policy decision, for further clues to the direction of monetary policy in the world’s second-largest economy.

“We think the BoJ will maintain that there is a downside risk to the Japanese economy going forward,” said Credit Suisse economist Satoru Ogasawara in Tokyo.

The futures markets late Friday were pricing in zero chance of a rate hike at this policy board meeting, and a quarter-point of rate hikes over the next 12 months, according to calculations by Credit Suisse.

The meeting is the first since the release last week of quarterly data by the Cabinet Office, which showed the economy expanded at a faster-than-expected 0.8% in the recently-ended quarter, or 3.3% annualized, marking its third straight quarterly expansion. The preliminary figures beat economists’ expectation for a 2.5% expansion on an annualized basis.

The government revised down economic growth for the calendar fourth quarter to 0.6%, or 2.6% annualized, from its preliminary estimate of 0.9%, or 3.3% annualized.

Economists said the quarterly data offered up a mixed picture of the health of the Japanese economy, with exports to emerging markets and commodity-rich nations continuing as the main engine of growth.

Exports in the quarter climbed 4.5%, or 19.5% annualized, contributing a half-percentage point to the quarterly GDP growth figure. The figures marked the third consecutive quarter of double-digit growth in exports.

“You expect some kind of negative payback,” said Masamichi Adachi, J.P. Morgan’s senior economist in Tokyo, adding that the surge in export growth had outpaced economic growth in Japan’s major trading partners. “I’m expecting a sharp slowdown in the next three months, first-quarter growth was too strong.”

Lehman Brothers’ economist Kenichi Kawasaki said the headline GDP figure did not take into account price changes. He estimated that when surging costs of imports are added to calculations, the Japanese economy expanded at about 0.4% for the quarter in nominal terms, or 1.5% annualized.

Kawasaki said he still expects the economy to grow 1.7% in calendar 2008 but noted the pace of growth was set to slow gradually during the year.

“With the terms of trade worsening, corporate profits are being squeezed,” Kawasaki wrote in a research note. “Weakening profit growth will likely cause corporate appetite for capital expenditure to wane and bonus payments to decline.”

Japanese machinery order fell 8.3% in March on month, worse than consensus estimates for a 5.3% decline, according to government data released last week. The slide extended a 12.3% contraction in February, following a 17.3% jump in January.

“Even though the [BoJ’s] monetary policy stance may be neutral, the cautious stance on the economy will probably increase after this week’s data,” said Credit Suisse’s Ogasawara, adding the slower spending on machinery and equipment will likely lead the economy into a contraction in the second quarter.

“We are not sure which direction the economy is going; we know it is slowing down, but it is very difficult to quantify how much,” he added.

Economists said there were signs private consumption could help kept the economy ticking along in coming quarters.

Residential investment jumped 4.6% for the quarter, or 19.5% on an annualized basis. Those figures were the first rise in five quarters following the introductions of stricter building codes in June that led to a slump in homebuilding.

Societe Generale’s Asia-Pacific economist Glenn Maguire said the measures of private consumption and domestic demand in the quarterly data point to firming prices, signaling Japanese consumers were willing to pay more for goods and services as firms passed along higher input prices.

“We believe the central bank will be unlikely to reignite discussion of flexibility in the monetary policy outlook given growing attention being paid to inflation risks,” Maguire wrote in a research note.

He added that Governor Shirakawa, who will chair his second policy board meeting since officially assuming the helm April 9, had struck a more hawkish tone in recent speeches, even reinstating references to normalizing interest rate policy in an address given to the National Press Club in Tokyo last week.

“Shirakawa’s concern on inflation, as with other central bankers, is likely to be coming to the fore as economic data is not as weak as many had feared,” Maguire said.

The BoJ said last month that economic conditions had weakened since its October outlook, with both housing and business fixed investment weaker than expected.

In its half-yearly outlook, the central bank forecast the economy will grow 1.5% in the fiscal year ending March 31, slower than an October forecast for a 2.1% expansion, while consumer prices will rise 1.1%, faster than an earlier estimate for a 0.4% rise. Growth next year is likely to range between 1.5% to 2%, boosted by a rebound in overseas demand and easing commodity prices.

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Tokyo’s Nikkei 225 Index

JBI

GOLD

SILVER

PLATINUM

PALLADIUM

…..and COPPER

JBI

Many thanks, Striker. Most welcome addition to the Tottstown Tent Tempest

Who’s Who @ Tottsville IV …..
-> Posted by strikerrod @ 14:39 pm on May 18, 2008

goldbug-mtg-tottsville-4-2008.JPG Picture can be increased in size to view name tags.

GDM - AMEX Gold Miners Index

XAU - Phlx Gold Silver Index

HUI - AMEX Gold Bugs Index

JBI

SAN FRANCISCO (MarketWatch) — Microsoft said in a statement Sunday it’s talking about a new deal with Yahoo that wouldn’t involve a full buyout. “In light of developments since the withdrawal of the Microsoft proposal to acquire Yahoo Inc., Microsoft announced that it is continuing to explore and pursue its alternatives to improve and expand its online services and advertising business,” the company said. Microsoft said it is not proposing to make a new bid to acquire all of Yahoo at this time, “but reserves the right to reconsider that alternative depending on future developments and discussions…” Since Microsoft walked away from its bid for the Web company, investor Carl Icahn has launched an effort to oust Yahoo’s board.

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JBI

PS - Best to sell both and just buy ASA, FCX or BHP, imo.

…Picture saved on right sider…. a Big Bug Bash