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mere chrom
http://finance.yahoo.com/q/bc?s=CHX.L&t=2y
ja, det troede jeg da at du vidste
bauxite er det grundlæggende råstof, der bruges til at producere alumina, i forholdet 2-3 tons pr alumina tons og derefter bruges alumina til at producere aluminium i forholdet 2 tons til 1 tons altså ialt ca 5 tons bauxite til 1 tona aluminium og det kræver en utrolig masse energi at producere al
men da forskellige producenter producerer enten det ene eller det andet kunne det være rart at kende priserne på de forskellige mellemtrin i processen, det er jo ikke altid sikkert at de bare følger aluminiumsprisen
ferro-chrome aktier
For the three months ended 31 March 2008, sales volumes were 56,905 tonnes at an average CIF (Cost, Freight & Insurance) price of US$1.15 per pound. Total sales for the nine months to 31 March 2008 were 118,771 tonnes.
Revenue for the three months ended 31 March 2008 was ZAR456 million, bringing total revenue for the nine months to that date to ZAR823 million. The majority of revenue of the quarter ended 31 March 2008 represents sales contracts entered into during the last quarter of 2007. During that period, the market price for ferrochrome was US$1.00 per pound. On 1 January 2008, ferrochrome prices increased to US$1.21per pound with a further 60% increase to US$1.92 per pound effective from April 2008.
Independent research commissioned by IFL indicates strong demand and prices for ferrochrome in both the near and long term. Metal Bulletin forecasts average annual prices of between US$2.50 to US$3.00 per pound in 2008 with spot market prices potentially rising to US$3.50 to US$4.00 in late 2008 or early 2009. Similar price forecasts have been received from Heinz Pariser.
http://finance.yahoo.com/q?s=IFL.L
hvorfor falder den så meget
titanium og bauxit i vestafrika
de producerer, men har underskud fordi de ekspanderer og investerer mere end de tjener
hvorfor kan man ikke finde charts på prisen på bauxit, alumina og diverse titanium inputs, der har så svære navne at jeg ikke lige kan huske dem bortset fra noget med ilmenit
http://finance.yahoo.com/q/bc?s=TXR.L&t=5y
folk tror verden går under fordi et par sølle megabanker i usa har problemer
og så betyder de slet ingen ting
men det er svært at være tålmodig i så lang tid
pippen har opgivet, især fordi solen ikke skinner, hun havde ellers regnet med at skulle gå topløs i parken idag, men det er det for koldt til siger hun og taget sin skindpels på i stedet
KIEV, June 19 (Reuters) - Ukrainian carmaker Bogdan is to open a plant in the central town of Cherkassy capable of producing 120,000 vehicles a year, the company's president said on Thursday.
Oleg Sinarchuk told a news conference the new plant, to open on Friday, covered 120,000 square metres, and was built over two years at a cost of $300 million.
He said the facility would be used to produce two models of Lada (AVAZ.MM: Quote, Profile, Research, Stock Buzz) and three of Hyundai (005380.KS: Quote, Profile, Research, Stock Buzz). Bogdan also produces KIA (000270.KS: Quote, Profile, Research, Stock Buzz) and VAZ cars and various types of of buses at plants in Cherkassy and the western town of Lutsk.
Bogdan recorded net profit in the first quarter of 2008 of 39.151 million hryvnias ($8.1 million), 2 1/2 times the figure in the same period of 2007.
Ukraine's carmaking industry is one of the fastest growing in the central European region. (Reporting by Yuri Kulikov, writing by Ron Popeski)
LONDON, June 4 (Reuters) - Banks are funnelling money to quality mining projects and M&A deals in a defensive move as the global credit crunch bites in other sectors, bankers and industry players said on Wednesday.
Plenty of funds were available at higher costs, though there was a lid on how much banks would lend to untested firms that were developing new mines or to ones operating in risky areas, the World Mining Investment Congress in London heard.
After the collapse of the subprime sector, banks were seeking other areas regarded as safer, and mining fitted the bill, with high metals prices and buoyant long-term demand expected from China and India, even if the United States and Europe fall into recession.
"People flee the scene of the crime first, and then they look for other places to put their money, because there's still a lot of liquidity sloshing around the system," said Jeff Stufsky, managing director and global head of mining and debt solutions at BNP Paribas.
"We're experiencing this ourselves, as a very active bank; there is an exceptionally strong appetite and capacity available for mining finance."
Banks, however, were only looking for top-notch projects with strong management and were avoiding high-risk areas, speakers said.
Strong projects were becoming rarer as the global commodities boom created a shortage of skilled managers and geologists, while projects encountered delays due to restrictions by governments, rising costs and environmental concerns.
"For the first time ever, I have been getting calls from banks saying: 'Do you know of any (mining) projects to invest in?', which I have never known to happen. That just shows you that debt is available," said Michael Lynch-Bell, partner in charge of mining and metals at accountants Ernst & Young. Continued...
FUNDS FOR TAKEOVERS
There was also money available for takeovers in the mining sector, which has been resilient compared with other industries.
"Whilst the $1 billion plus deals command the headlines, there was a rise in the number of deals of juniors buying juniors, midcaps buying juniors, etc. There were over 900 M&A deals in the sector last year, and we see that continuing in the course of this year," Lynch-Bell said.
Project finance available to the junior sector, however, was restricted, especially for start-up firms developing new mines.
"You cannot provide billions of dollars to a junior where they've got no previous production, but you can consider $700 million projects, you can consider $300, $400 $500 million of debt," Stufsky said.
Banks are charging more, and Stufsky estimated that loans were costing around 20-60 basis points more than before the credit crisis.
More and more junior mining firms with no operating mines were teaming up with majors to finance new projects after hitting a brick wall in attempts to find loans, said William Bulmer, head of mining investments at the International Finance Corp, the World Bank's private-sector lender.
"In the past they would have attempted to structure them as project finance transactions, but the costs for that now are just too high, so there's a move to finance them with a corporate structure, much more off-balance-sheet deals now for projects." Continued...
Some countries were virtually off the radar for funding due to political risk, such as the Democratic Republic of Congo, which is in the midst of a long-running renegotiation of mining licences.
Arthur Ditto, chief executive of Katanga Mining (KAT.TO: Quote, Profile, Research, Stock Buzz), aims to negotiate a credit facility of $550 million to help finance Africa's biggest copper and cobalt mine, but does not expect to conclude the facility until the middle of next year.
"Right today, by and large, the DRC is not creditworthy, and until these mining reviews are reached and all these matters are in the rear-view, which I expect to be in the near future, it's not really a creditworthy place." (Reporting by Eric Onstad, editing by Will Waterman)
også et fald, der kunne være et køb værd
http://finance.yahoo.com/q/bc?s=RSH&t=my
den her raffinaderi aktie er også faldet voldsomt og bør måske overvejes
http://finance.yahoo.com/q/bc?s=WNR&t=5y
DUBAI (Reuters) - Luxury sports cars, gas-guzzling SUVs, even tank-like Hummers all jostle for space on Gulf highways, their owners buoyed by record oil prices that have forced some motorists to ditch cars for bicycles in the West.
Not only has government-subsidized gasoline prevented motorists in the Gulf Arab region from feeling the pinch at the pump, but windfall revenues from $140-a-barrel oil have fuelled an economic boom and put deluxe cars in more people's reach.
"High oil prices are feeding into the economy, so more people have higher incomes, so more people buy luxury cars," said Julian Millward-Hopkins, Middle East and Levant press manager for German luxury brand Mercedes-Benz (DAIGn.DE: Quote, Profile, Research, Stock Buzz).
"If you look at sales worldwide it is a pyramid. At the bottom are smaller cars and at the top are luxury sports cars. In the Middle East it's an inverted pyramid. Luxury cars do proportionately better here than elsewhere."
Custom-made Rolls-Royces (RR.L: Quote, Profile, Research, Stock Buzz), stretch-Hummers (GM.N: Quote, Profile, Research, Stock Buzz) with blacked-out windows and bright red Maseratis line the entrance to Dubai's Mall of the Emirates, but even in the drabbest parts of town four-wheel-drives rule the roads.
Luxury cars are so in demand given the tax-free Gulf prices that motorists with cash to flash must join long waiting lists for the most prestigious models, sometimes waiting a year for delivery.
BOOMING DEMAND
The booming luxury car market in the Middle East, where sales of Mercedes-Benz rose 31 percent in May on the same month last year, comes in stark contrast to the recession fears gripping the United States, Europe and parts of Asia. Continued...
The booming luxury car market in the Middle East, where sales of Mercedes-Benz rose 31 percent in May on the same month last year, comes in stark contrast to the recession fears gripping the United States, Europe and parts of Asia.
Oil exporters and consumers meet in Saudi Arabia on Sunday seeking to curb prices that have provoked protests from Brussels to Bangkok, threatening to throw the world economy into turmoil.
In the United States, 95-octane gasoline is selling for around $4 a litre at the pump, but in the United Arab Emirates, where it still costs around $0.36 a litre, fuel-efficiency is the last thing on motorists' minds.
"People very rarely ask about fuel-efficiency to be honest," said one salesman at a luxury car showroom in Dubai. "It is just not an issue for people here."
Ford (F.N: Quote, Profile, Research, Stock Buzz) is idling a U.S. plant manufacturing sports utility vehicles (SUV) for nine weeks due to declining demand.
General Motors is closing four U.S. truck plants and may sell Hummer -- the military-derived vehicle synonymous with gas-guzzling excess -- as Americans stung by rising gasoline prices choose smaller, more economical vehicles.
Yet Middle East sales of General Motors' full-size SUVs grew 40 percent in the first quarter of this year, bought by everyone from families seeking big vehicles to young men seeking rugged cars to take off road. That compares to overall sales growth of 6 percent in the Middle East in the same period.
"This market is buoyant in the large SUVs and premium cars," said John Passadis, Middle East director of sales at General Motors, which also represents GMC, Chevrolet and Cadillac.
"The price of fuel is still at a level where it does not impact you that much so you can have a large capacity engine." Continued...
You can drive around twice as far on one gallon of fuel in Ford's dinky Focus car, as you can in a Hummer H3 or a Toyota (7203.T: Quote, Profile, Research, Stock Buzz) Land Cruiser, ubiquitous on Gulf highways.
"I would not drive this kind of car in England," said Henry Charles, a Dubai-based consultant. "It is not just the high fuel consumption. Cars are also much cheaper here." (Editing by Charles
TIJUANA, Mexico (Reuters) - U.S. motorists are risking rampant drug violence in Mexico to drive over the border and fill their tanks with cheap Mexican fuel, some even coming to blows over gas shortages and long queues.
The gap between Mexico's subsidized gasoline and record U.S. prices has made it well worth making the trip, and U.S. drivers are even shrugging off the dangers of Mexico's drug war which sees almost daily shootings in border towns.
Some say they can save up to $100 a month by filling up every two weeks in Mexico. The extra demand is causing shortages at hundreds of Mexico's border gas stations, some of which are starting to ration fuel.
"It's worth taking the risk even with the violence," said a retired California engineer named Terry, who declined to give his surname, as he filled his red Ford pick-up truck in Tijuana, over the border from San Diego. "I know they could kill me or kidnap me, but the cost of filling my tank in the United States is just too much," he said.
Mexico's subsidized gasoline -- around $1.40 cheaper per gallon than in the United States -- is a huge draw as average U.S. pump prices hit an unprecedented $4 a gallon ($1.06 a liter). In West Coast cities like San Francisco and Los Angeles, prices are over $4.50 a gallon.
Savings on diesel in Mexico are even greater. A gallon of diesel in southern Arizona cost $4.64 this week, compared to around $2.25 in Mexican border towns.
As pump attendants struggled to keep up with dozens of vehicles lining up for fuel, U.S. and Mexican drivers traded insults. A few even brawled as they waited for hours in searing heat this week in the rough border city of Tijuana.
"I am not budging until I get to the pump. I don't care what anyone says, I've been waiting for two hours," said Jaime Rosales from Southern California, at a gas station where buses, trucks and cars all vied to get to the pumps. Continued...
3.75 kroner pr liter i kina, det er vel nok synd for dem, vi betaler kun 11.5
BEIJING, June 20 - Automobile makers said on Friday they did not expect any major impact on sales in China after Beijing unexpectedly hiked retail fuel prices by up to 18 percent, its sharpest ever one-off rise.
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"The hike may restrain purchases of automobiles in the short run," said Zhu Linjie, spokesman of Honda Motor Co <7267.T> in China. "But from a long-term perspective, there would not be a huge impact on our total sales."
The Japanese car maker sold 410,000 vehicles in China last year and is expecting sales to rise to 490,000 in 2008, and is not planning to adjust that forecast, said Zhu.
High fuel efficiency vehicles would be more popular, he said.
Xu Changming, an auto industry analyst with the State Information Center, said the impact from the latest rise of less than one yuan per litre would be minimal, but continued price rises would eventually slow automobile sales.
"The key is the expectations for future price hikes," Xu said. Owners of low-end cars would be more affected than others, as they are more cost-sensitive, he said.
"Current fuel prices are not the decisive factor in buying cars," said an official at Shenyang Brilliance Jinbei Automobile, who requested anonymity because she was not authorised to speak to the media.
People depend on cars for their business and families, and those outweigh the added cost of fuel, she said.
The 16.7 percent climb in gasoline takes the pump rate to about 75 U.S. cents a litre, while diesel prices were raised 18 percent. China's domestic prices have doubled since 2003, while the price of crude oil has more than quadrupled.
DETROIT, June 20 (Reuters) - Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) said on Friday it would slash output and delay a new version of its top-selling F-150 pickup truck due to a deepening slump in U.S. sales it warned would weigh on results this year and next.
Ford said it would post a deeper loss this year and warned it would be difficult to avoid a loss in 2009 as it burns through cash faster than it had projected.
That was a weaker outlook than Ford gave last month when it abandoned a goal of returning to profit next year in the face of record gas prices and plummeting sales for trucks and SUVs.
The warning weighed on Ford stock and bonds. Ford shares dropped nearly 8 percent to their lowest level in 10 weeks.
Ratings agency Standard & Poor's said it could cut ratings on all three U.S. automakers, saying Ford's warning showed Detroit's difficulty "anticipating the pace of market deterioration."
The risk of mounting losses raises the prospect Ford could be forced to raise liquidity, possibly through a deal with billionaire Kirk Kerkorian, who owns almost 6.5 percent of Ford and has offered more capital for its restructuring.
"This is a tough situation," said David Healy, an analyst with Burnham Securities. "They are probably going to do more financing. They might even take money from Kerkorian." Continued...
S&P said Ford was on track to burn more than $16 billion in cash between 2007 and 2009 unless the economy improves.
The No. 2 U.S. automaker raised $23.5 billion in 2006 by pledging almost all of its assets, including the familiar Ford blue-oval logo, as collateral. But that financing was based on a turnaround plan the automaker now says has been thrown off track by the downturn in the U.S. market.
Citigroup analyst Itay Michaeli said Ford's shift to smaller vehicles with lower profit margins and the weakness in consumer credit markets would erode long-term profitability.
"Today's announcement is consistent with our expectation for a number of setbacks in Ford's turnaround," he said in a note for clients.
MARKET WEAKENS
Ford cut its worst-case forecast for industrywide U.S. auto sales this year to 14.7 million units, including medium and heavy-duty trucks, down from 15 million.
In response, Ford said it would cut third-quarter production by 25 percent and fourth-quarter output by up to 14 percent as it throttles back the output of big trucks and SUVs that consumers are increasingly shunning.
The cuts will come by eliminating shifts, slowing assembly lines and idling truck plants later this year. Factories affected are in Michigan, Kentucky, Kansas and Illinois.
Ford also delayed the launch of its new F-150 truck by about two months. It said it was taking the unusual and costly step to sell down inventory of the current F-150 model. Continued...
As gasoline prices average more than $4 a gallon and consumers worry about the weak U.S. economy, we see June industrywide auto sales slowing further, and demand for large trucks and SUVs at one of the lowest levels in decades," Ford Chief Executive Alan Mulally said in a statement.
Ford said that its finance arm, Ford Motor Credit, would suspend dividend payments to the parent company this year because it expects to post a loss due to the collapse in the auction values of used trucks and SUVs. Those resale values are a crucial component in the pricing of auto leases.
Ford Credit may need to write down $1.1 billion because of falling values of off-lease vehicles, Lehman Brothers analyst Brian Johnson said in a note for clients on Friday.
KERKORIAN IN FOCUS
The developments mark the first significant setback for Ford since Mulally took over as chief executive in 2006.
Ford lost $2.7 billion in 2007 and $12.6 billion in 2006 and the cornerstone of a restructuring plan Ford calls the "Way Forward" had been a return to profitability by 2009.
But Mulally and Ford have both won an endorsement from Kerkorian, a billionaire investor with a long record as an activist investor in the U.S. auto industry.
Kerkorian, who has invested about $1 billion in Ford, disclosed on Thursday that he had taken a 6.49 percent stake in the automaker. That represented a bigger bet on Ford's turnaround and came despite more than a 25 percent drop in Ford shares over the past two months.
Ford said it would provide more detail on the changes to its restructuring plan when it announces second-quarter financial results in July.
In the meantime, the company's lower production will cut revenue this quarter and next because Ford, like its rivals, books sales when vehicles are produced and shipped to dealers.
Healy said the production cuts would likely reduce Ford's pretax results by about $1 billion.
"It's what I call the perfect storm in the auto industry," he said. "Overall sales are down but the mix has changed rapidly."
The company's shares were down 50 cents to $5.82 on the New York Stock Exchange. Ford's bonds with a 7.45 percent coupon due in 2031 fell to 62.25 cents on the dollar, down from 65.5 cents on Thursday, according to MarketAxess. (Editing by John Wallace and Carol Bishopric)
DETROIT (Reuters) - Ford Motor Co plans to close a Michigan plant that builds large sport utility vehicles for nine weeks as demand for the vehicles has declined amid record high U.S. gas prices.
The Michigan Truck plant in Wayne, Michigan, which makes the Lincoln Navigator and Ford Expedition, will be idled starting Monday until August 25, Ford spokesman Mark Truby said on Tuesday.
"We are seeing less demand in the large truck and large SUV market right now," Truby said.
Consumers are spurning pickup trucks and SUVs and moving to smaller, more fuel-efficient vehicles.
Both the Navigator and Expedition are two of Ford's largest SUVs.
U.S. Navigator sales fell 37 percent in May, while Expedition sales were down 43 percent.
Ford has said it plans to increase car production and decrease the output of trucks to better align its line-up to market demand.
The company plans in July to update investors on its production plans
Malaysian manufacturing soars 18.5 percent in April
Malaysian manufacturing sales, a key driver of the economy, surged 18.5 percent in April compared with a year earlier, according to official data released Friday.
pippen siger det boomer i asien
The statistics department credited the improvement, which compares with a revised 10.2 percent annual rise in March, to the strong performance of refined petroleum products, as well as computers and computer peripherals.
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Measured against the previous month, manufacturing sales in April were down 0.1 percent for a total of 48.27 billion ringgit (14.9 billion dollars) from 48.33 billion ringgit.
The number of people employed in the manufacturing sector, which accounts for about a third of Malaysia's gross domestic product, rose 0.9 percent to 1.096 million in April, it said.
For the first four months of the year, the manufacturing sector grew 15.8 percent to 187.4 billion ringgit.
utroligt som den er faldet fra ca 50 til 7-8
laser vision correction
sidste kvartal 37 c, altså en pe på under 5
kommentar? om den er værd at købe eller om der er noget fundamentalt galt
http://finance.yahoo.com/q/bc?s=LCAV&t=my
Oil giants lining up for slice of Iraqi resources
1 day ago
WASHINGTON (AFP) — Global oil giants are preparing to return to Iraq after being chased out of the oil-rich country 36 years ago by the late dictator Saddam Hussein, reports said Thursday.
Shell, BP and ExxonMobil are all eagerly lining up to tap into the resources of the Middle Eastern nation with a deal due to be signed on June 30, the New York Times said quoting oil companies and a US diplomat.
"The deals ... will lay the foundation for the first commercial work for the major companies in Iraq since the American invasion, and open a new and potentially lucrative country for their operations," the Times said.
Iraqi Oil Minister Hussein Shahristani told the Middle East Economic Survey earlier this month that the government was ready to sign Technical Support Agreements with foreign oil companies by the end of June to add an eventual 500,000 barrels per day (bpd) in output capacity.
MEES said five consortia were in talks with the Iraqi government for the two-year contracts.
The agreements cover Kirkuk field (Shell), Rumaila (BP), Al-Zubair (ExxonMobil), West Qurna Phase I (Chevron and Total), Missan province development (Shell and BHP Billiton) and the Subba and Luhais fields (Anadarko, Vitol and the UAE's Dome), MEES said.
ExxonMobil, Shell, Total and BP or their predecessors all had stakes in the Iraq Petroleum Company, which held a monopoly on the country's oil resources from 1925 to 1961.
In April, the French company Total admitted there were ongoing discussions with Chevron on a deal to develop West Qurna.
"I can confirm that Chevron and Total are in joint discussions with their ministry of oil regarding a technical services contract," a Chevron spokesman said Thursday. "The objective would be to increase output."
ExxonMobil for its part has already voiced an interest in participating in the development of Iraq's oil resources.
"If the Iraqi government decides it wants international oil companies to partner with them in developing their resources, ExxonMobil would be interested in participating," the company said.
Iraqi Deputy Prime Minister Barham Saleh said last month that his country was the world's largest ever emerging market, with foreign companies lining up to invest in the war-ravaged economy.
Iraq was predicting 70 billion dollars in oil revenue this year, with reserves that "could well exceed" 350 billion barrels, and with the International Monetary Fund slating eight percent growth in 2008.
The technical support assistance deals are a bridging contract designed to fast-track foreign oil involvement in Iraq, while a new hydrocarbons law has yet to be passed by the Iraqi parliament.
Iraq is also working to launch an upstream bidding round this year that, unlike the TSAs, is expected to require the prior passage of the new hydrocarbons law.
"We are working on a development round. We have a draft contract prepared. We are working towards having it ready for July," Shahristani said.
The news that a deal is in the offing is likely to inflame debate about the origins of the Iraq war, which many critics have claimed was all about the country's oil reserves.
But US Secretary of State Condoleezza Rice said Thursday the US government was not involved in the no-bid oil contracts.
"The United States government has stayed out of the matter of awarding the Iraq oil contracts. It's a private sector matter," Rice told Fox news network.
But she did stress that the likely awarding of contracts "demonstrates that it's starting to get interesting in Iraq and recognizes the potential for Iraq to become an even more major oil supplier."
"That's really a good sign. It will be a good sign if Iraq can increase oil production because, of course, the supply and demand of oil is a major concern to all of us."
Brokers threatened by run on shadow bank system
Regulators eye $10 trillion market that boomed outside traditional banking
By Alistair Barr, MarketWatch
Last update: 2:37 p.m. EDT June 20, 2008Comments: 152SAN FRANCISCO (MarketWatch) -- A network of lenders, brokers and opaque financing vehicles outside traditional banking that ballooned during the bull market now is under siege as regulators threaten a crackdown on the so-called shadow banking system.
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MER 35.83, -1.86, -4.9%) , which some say are the biggest players in this non-bank financial network, may have the most to lose from stricter regulation.
The shadow banking system grew rapidly during the past decade, accumulating more than $10 trillion in assets by early 2007. That made it roughly the same size as the traditional banking system, according to the Federal Reserve.
While this system became a huge and vital source of money to fuel the U.S. economy, the subprime mortgage crisis and ensuing credit crunch exposed a major flaw. Unlike regulated banks, which can borrow directly from the government and have federally insured customer deposits, the shadow system didn't have reliable access to short-term borrowing during times of stress.
Unless radical changes are made to bring this shadow network under an updated regulatory umbrella, the current crisis may be just a gust compared to the storm that would follow a collapse of the global financial system, experts warn.
Such vulnerability helped transform what may have been an uncomfortable correction in credit markets into the worst global credit crunch in more than a decade as monetary policymakers and regulators struggled to contain the damage.
Unless radical changes are made to bring this shadow network under an updated regulatory umbrella, the current crisis may be just a gust compared to the storm that would follow a collapse of the global financial system, experts warn.
"The shadow banking system model as practiced in recent years has been discredited," Ramin Toloui, executive vice president at bond investment giant Pimco, said.
Toloui expects greater regulation of big brokerage firms which may face stricter capital requirements and requirements to hold more liquid, or easily sellable, assets.
'Clarion call'
"The bright new financial system -- for all its talented participants, for all its rich rewards -- has failed the test of the market place," Paul Volcker, former chairman of the Federal Reserve, said during a speech in April. "It all adds up to a clarion call for an effective response."
Two months later, Timothy Geithner, president of the Federal Reserve Bank of New York, and others have begun to answer that call.
"The structure of the financial system changed fundamentally during the boom, with dramatic growth in the share of assets outside the traditional banking system," he warned in a speech last week. That "made the crisis more difficult to manage."
On Thursday, Treasury Secretary and former Goldman Chief Executive Henry Paulson said the Fed should be given the authority to collect information from large complex financial institutions and intervene if necessary to stabilize future crises. Regulators should also have a clear way of taking over and closing a failed brokerage firm, he added. See full story.
Banking bedrock
The bedrock of traditional banking is borrowing money over the short term from customers who deposit savings in accounts and then lending it back out as mortgages and other higher-yielding loans over longer periods.
The owners of banks are required by regulators to invest some of their own money and reinvest some of the profit to keep an extra level of money in reserve in case the business suffers losses on some of its loans. That ensures that there's still enough money to repay all depositors after such losses.
In recent decades, lots of new businesses and investment vehicles have evolved that do the same thing, but outside the purview of traditional banking regulation.
Instead of getting money from depositors, these financial intermediaries often borrow by selling commercial paper, which is a type of short-term loan that has to be re-financed over and over again. And rather than offering home loans, these entities buy mortgage-backed securities and other more complex securities.
A $10 trillion shadow
By early 2007, conduits, structured investment vehicles and similar entities that borrowed in the commercial paper market and bought longer-term asset-backed securities, held roughly $2.2 trillion in assets, according to the Fed's Geithner.
Another $2.5 trillion in assets were financed overnight in the so-called repo market, Geithner said.
Geithner also highlighted big brokerage firms, saying that their combined balance sheets held $4 trillion in assets in early 2007.
Hedge funds held another $1.8 trillion, bringing the total value of asset in the "non-bank" financial system to $10.5 trillion, he added.
That dwarfed the total assets of the five largest banks in the U.S., which held just over $6 trillion at the time, Geithner noted. The traditional banking system as a whole held about $10 trillion, he said.
"These things act like banks, but they're not."
— James Hamilton,Economics professor
While acting like banks, these shadow banking entities weren't subject to the same supervision, so they didn't hold as much capital to cushion against potential losses. When subprime mortgage losses started last year, their sources of short-term financing dried up.
"These things act like banks, but they're not," James Hamilton, professor of economics at the University of California, San Diego, said. "The fundamental inadequacy of their own capital caused these problems."
Big brokers targeted
Geithner said the most fundamental reform that's needed is to regulate big brokerage firms and global banks under a unified system with stronger supervision and "appropriate" requirements for capital and liquidity.
Financial institutions should be persuaded to keep strong capital cushions and more liquid assets during periods of calm in the market, he explained, noting that's the best way to limit the damage during a crisis.
At a minimum, major investment banks and brokerage firms should adhere to similar rules on capital, liquidity and risk management as commercial banks, Sheila Bair, chairman of the Federal Deposit Insurance Corp., said on Wednesday.
"It makes sense to extend some form of greater prudential regulation to investment banks," she said.
Separation dwindled
After the stock market crash of 1929, the U.S. Congress passed laws that separated commercial banks from investment banks.
The Fed, the Office of the Comptroller of the Currency and state regulators oversaw commercial banks, which took in customer deposits and lent that money out. The Securities and Exchange Commission regulated brokerage firms, which underwrote offerings of stocks and corporate bonds.
This separation dwindled during the 1980s and 1990s as commercial banks tried to push into investment banking -- following their large corporate clients which were selling more bonds, rather than borrowing directly from banks.
Brokers threatened by run on shadow bank system
By 1999, the Gramm-Leach-Bliley Act rolled back Depression-era restrictions, allowing banks, brokerage firms and insurers to merge into financial holding companies that would be regulated by the Fed.
Commercial banks like Citigroup Inc. (C:Citigroup, Inc
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C 19.24, -0.93, -4.6%) , Bank of America (BAC:bank of america corporation com
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BAC 27.15, -0.99, -3.5%) and J.P. Morgan Chase (JPM:JPMorgan Chase & Co
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JPM 37.78, -0.87, -2.2%) signed up and developed large investment banking businesses.
However, big brokerage firms like Goldman, Morgan Stanley and Lehman didn't become financial holding companies and stayed out of commercial banking partly to avoid increased regulation by the Fed.
Run on a shadow bank
The Fed's bailout of Bear Stearns in March will probably change all that, experts said this week.
Bear, a leading underwriter of mortgage securities, almost collapsed after customers and counterparties deserted the firm.
It was like a run on a bank. But Bear wasn't a bank. It financed a lot of its activity by borrowing short term in repo and commercial paper markets and couldn't borrow from the Fed if things got really bad.
Bear's low capital levels left it with highly leveraged exposures to risky mortgage-related securities, which triggered initial doubts among customers and trading partners.
The Fed quickly helped J.P. Morgan Chase, one of the largest commercial banks, acquire Bear. To prevent further damage to the financial system, the Fed also started lending directly to brokerage firms for the first time since the Depression.
"They stepped in because Bear was facing a traditional bank run -- customers were pulling short-term assets and the firm couldn't sell its long-term assets quickly enough," Hamilton said. "Rules should apply here: You should have enough of your own capital available to pay back customers to avoid a run like that."
Bear necessity
A more worrying question from the Bear Stearns debacle is why customers and investors were willing to lend money to the firm in the absence of an adequate capital cushion, Hamilton said.
"The creditors thought that Bear was too big to fail and that the government would step in to prevent creditors losing their money," he explained. "They were right because that's exactly what happened."
"This is a system in which institutions like Bear Stearns are taking far too much risk and a lot of that risk is being borne by the government, not these firms or the market," he added.
The Fed has lent between $8 billion and more than $30 billion each week directly to brokerage firms since it set up its new program in March. Most experts say this source of emergency funding is unlikely to disappear, even though it's scheduled to end in September.
"It's almost impossible to go back," FDIC's Bair said on Wednesday.
With taxpayer money permanently on the line to save big brokers, these firms should now be more strictly regulated to keep future bailouts to a minimum, Bair and others said.
"By definition, if they're going to give the investment banks access to the window, I for one do believe they have the right for oversight," Richard Fuld, chief executive of Lehman, told analysts during a conference call this week. "What that means, though, particularly as far as capital levels or asset requirements, it's way too early to tell."
Super Fed
Next year, Congress likely will pass legislation forcing big brokerage firms to be regulated fully by the Fed as financial holding companies, Brad Hintz, a securities analyst at Bernstein Research and former chief financial officer of Lehman, said.
Legislators will probably also call for tighter limits on the leverage and trading risk taken on by large brokers, while demanding more conservative funding and liquidity policies, he added.
Restrictions on these firms' forays into venture capital, private equity, real estate, commodities and potentially hedge funds may also follow too, Hintz warned.
This may undermine the source of much of the surging profit generated by big brokerage firms in recent years.
A newly empowered "super Fed" will likely encourage these firms to arrange longer-term, more secure sources of borrowing and even promote the development of deposit bases, just like commercial and retail banks, the analyst explained.
This will make borrowing more expensive for brokerage firms, undermining the profitability of businesses that require a lot of capital, such as fixed income, institutional equities, commodities and prime brokerage, Hintz said.
Such regulatory changes will cut big brokers' return on equity -- a closely watched measure of profitability -- to roughly 15.5% from 19%, Hintz estimated in a note to investors this week.
Lehman and Goldman will be most affected by this -- seeing return on equity drop by about four percentage points over the business cycle -- because they have larger trading books and greater exposure to revenue from sales and trading. Goldman also has a major merchant banking business that may also be constrained, Hintz added.
Morgan Stanley and Merrill Lynch (MER:Merrill Lynch & Co., Inc
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MER 35.77, -1.92, -5.1%) will see declines of 3.2 percentage points and 2.2 percentage points in their return on equity, the analyst forecast.
If you can't beat them...
Facing lower returns and more stringent bank-like regulation, some big brokerage firms may decide they're better off as part of a large commercial bank, some experts said.
"If you're being regulated like a bank and your leverage ratio looks something like a bank's, can you really earn the returns you were making as a broker dealer? Probably not," Margaret Cannella, global head of credit research at J.P. Morgan, said.
Regulatory changes will be unpopular with some brokerage CEOs and could result in a shakeup of the industry and more consolidation, she added.
Hintz said the business models of some brokerage firms may evolve into something similar to Bankers Trust and the old J.P. Morgan.
In the mid 1990s, Bankers Trust and J.P. Morgan relied more on deposits and less on the repo market to finance their assets. They also operated with leverage ratios of roughly 20 times capital. That's lower than today's brokerage firms, which were levered roughly 30 times during the peak of the credit bubble last year, according to Hintz.
However, both firms soon ended up in the arms of more regulated commercial banks. Bankers Trust was acquired by Deutsche Bank (DB:deutsche bank ag namen akt
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DB 91.00, -3.96, -4.2%) in 1998. Chase Manhattan Bank bought J.P. Morgan in 2000.
pippen synes det er et underligt bull marked
for aktierne falder jo
det plejer de ikke at gøre, når man er i et bull marked
interresant chart, så er vi snart på bunden
http://finance.yahoo.com/q/bc?s=GM&t=my&l=on&z=m&q=l&c=
pippen regner med at det er grønt når hun vågner
Large U.S. bank stocks in capitulation mode: Merrill
Friday June 20, 9:01 am ET
jeg har jo sagt at man skal holde sig fra finansaktier
(Reuters) - U.S. large-cap regional banks' stocks now appear to be in "capitulation mode" and will likely trade below fair value in the near term as more dividend cuts and capital raises, high credit risk and an uncertain earnings outlook all weigh on their share prices, an analyst at Merrill Lynch said.
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Analyst Edward Najarian said he does not expect credit metrics to recover until 2010 and forecast more dividend cuts and capital raising at banks, including Bank of America Corp (NYSE:BAC - News) and Wachovia Corp (NYSE:WB - News), in the second half of this year.
Najarian also slashed his earnings estimates by an average of 22 percent for 2008 and 19 percent for 2009. He said the estimate cuts were largely due to higher loan losses at banks, as well as an increase in loan loss reserve building.
He said Bank of America and Wachovia may miss second-quarter Wall Street estimates by the greatest percentage.
The analyst expects the median net charge-off ratio of large regional banks to triple to 1.14 percent in 2008, while loan loss provision-to-loan ratio is expected to increase to 1.87 percent in 2008 from 0.57 percent a year ago.
Najarian expects dividend cuts or capital raising, or both, at Bank of America, Regions Financial Corp (NYSE:RF - News), SunTrust Banks Inc (NYSE:STI - News) and Wachovia in the second half of the year.
"We note that Bank of America, Regions Financial and Wachovia have already raised capital since the first quarter, and we think future attempts to raise additional capital will likely result in further downward pressure on the stocks," Najarian said.
Shares of Bank of America were down nearly 3 percent to $27.35 in trading before the bell, after closing at $28.14 Thursday on the New York Stock Exchange. Wachovia shares were down more than 4 percent in pre-market trade, after closing at $17.77 Thursday.
hvor er de dumme, en stigning i olieprisen på 18% ændrer da ikke på at energiforbruget og især olien fortsat vil stige voldsomt i kina
China fuel price hike may not sap demand
Friday June 20, 6:24 am ET
By Elaine Kurtenbach, AP Business Writer
China's fuel price hike may not dent booming economy's hunger for oil, analysts say
SHANGHAI, China (AP) -- The jump in China's state-controlled fuel prices will inevitably squeeze consumers at both filling stations and grocery stores. But analysts say the hike is unlikely to make an immediate or huge dent in the country's hunger for oil.
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China's economy is booming, and people are buying cars and air conditioners as their incomes grow. There is huge pent up consumer demand in a country of 1.3 bilion where per capita energy consumption is still far below wealthier countries.
Also, the price hike of up to 18 percent is likely to prompt refiners to boost production of crude oil, gasoline and other refined products. Previously, they had held back because they were losing money on the wide gap between global crude oil prices and state-set retail prices, which had created widespread fuel shortages.
"Do not expect an immediate fall in China's oil imports -- the price effect on demand will work in China as well, but it will take some time to work through," Wang Tao, an economist for UBS Securities, said in a report issued Friday.
Crude oil prices edged higher Friday in Asian trading -- approaching $133 a barrel on the New York Mercantile Exchange -- after tumbling the day before on news the National Development and Reform Commission would raise prices for gasoline and diesel fuel by 16 percent and 18 percent respectively.
Some analysts said the oil market may have overreacted to the news from China, with some traders buying oil futures on the belief that their climb will continue.
"Whether domestic demand cools, or the price increase simply serves to bring more refining capacity on-line to satisfy China's voracious appetite, remains to be seen," said Jing Ulrich, chairwoman of China equities for JP Morgan Chase & Co.
Chinese drivers shrugged off the price hike as inevitable.
"Maybe I might drive a bit less. But if it's for business, then if I have to drive, I will," said He Ping, a trading company employee who was refilling is VW Jetta at a Beijing gas station.
"It's not that big a deal," he said.
In an explanatory note accompanying its announcement, the commission said that soaring oil prices had created "contradictions in the purchasing price of oil being higher than the selling price of refined products that were becoming more glaring by the day."
The government has been paying billions of dollars in subsidies to the country's two big state-owned refiners to make up for the losses. Many smaller loss-making refiners had shut down or cut back their operations.
The government hiked fuel prices by about 11 percent in November but had kept them frozen at that level, seeking to avoid adding to inflation, which has touched 12-year highs since the beginning of the year.
News of the price hikes lifted Chinese stocks Friday. The benchmark Shanghai index rose 3 percent, driven by a 4.6 percent gain in PetroChina and a 2.1 percent advance in Sinopec -- the country's two big refiners.
The hike raised the price of gasoline by 1,000 yuan ($145) per ton to 6,980 yuan ($1,015) -- more than 16 percent -- and diesel by the same amount per ton to 6,520 yuan ($949) per ton -- an 18 percent hike. Aviation kerosene rose by 1,500 yuan ($218) per ton to 7,450 yuan ($1,084), the commission, known as the NDRC, said on its Web site.
To protect individual consumers, the government said it would not allow any increases in bus and subway fares or taxi fares. Natural gas and liquefied petroleum gas prices will remain unchanged, and subsidies to the poor and to grain farmers would increase, it said.
Residential housing and farming and fertilizer industries will be exempt from a 0.025 yuan (0.0036 U.S. cents) per kilowatt increase in electricity rates for most businesses, the planning agency said.
The state-run newspaper China Daily said Friday that areas in Sichuan province, hit by a massive earthquake last month, were exempt from the increases.
Still, the move is widely expected to boost inflation -- a major concern for Beijing.
The hikes "will be quickly passed on to consumers through other channels, especially food prices in urban areas," said Vivian Chiu, an analyst at Merrill Lynch, said in a report.
China's inflation rate fell in May to 7.7 percent from 8.5 percent the month before, mainly reflecting lower food prices. But economists warn that higher costs for crude oil and other commodities pose a long-term threat.
Chinese officials bristle at suggestions that their country is a main factor behind the recent surge in global oil prices.
Despite surging oil costs, the country's imports of both crude oil and oil products have surged to unprecedented levels as it builds up national stockpiles, while exports have plunged. Crude oil imports rose to 59.8 million barrels in January-April, up 10 percent from a year earlier.
Gasoline imports skyrocketed by nearly 20 times to 554,000 tons in January-May while imports of diesel jumped by more than nine times, to 2.9 million tons.
"The government has to build up reserves for the sake of the domestic energy supply," said Han Xiaoping, chief executive officer of the China energy Web site http://www.china5e.com, an independent research organization.
"After all, China is not the only country with such reserves," Han said.
Despite the surge in overall demand, China still consumes far less energy per each of its 1.3 billion people than the U.S. or other wealthy countries. Streets are dimly lit, apartment buildings often are illuminated by lights triggered only by movement or sound and ownership of private cars, though growing quickly, remains relatively low.
Pinched by surging costs for labor, land and materials -- as well as energy -- Chinese industries are finally beginning to cut back on the waste that has made them far more extravagant energy consumers than private citizens.
China Ocean Shipping (Group) Co., a huge state-owned shipping company, announced earlier this week that it was cutting the speed of its ships by 10 percent to help reduce fuel consumption and conserve energy.
ID Firms Aren't a Sure Bet
fingerprint mm
It would seem that companies that focus on biometric identity sensors -- the kinds of tools that require a fingerprint to unlock a computer or to identify people crossing borders -- would be ripe for initial public offerings of stock in the U.S. But if activity this year is any indication, investors are actually giving a thumbs-down on this technology.
Two IPOs that were expected to price, from Cross Match Technologies Inc. and UPEK Inc., have instead pulled their IPOs this year, citing adverse market conditions. A third company that went public in June 2007, AuthenTec Inc., is trading 6% above its $11 IPO price.
"People take a look at the potential, and they think logically this should be a very hot area," says Kevin Landis, chief investment officer at Firsthand Funds, which owns a stake in AuthenTec. "But what it comes down to is the ability of new technology to really get off the starting block."
While more notebook-computer makers are integrating fingerprint sensors into their products, biometric locks on cellphones haven't caught on yet in the U.S.
In Japan, where cellphones are increasingly used as a mobile "wallet" to pay for goods and services -- they can be swiped over payment processors for everything from subway rides to Big Macs -- fingerprint sensors are used to unlock the phones' data and payment capabilities.
Japanese and European consumers tend to be ahead of Americans on how they use their cellphones, but no one can be sure that the people in the U.S. will adopt the trend.
"Mobile commerce utilizing a cellphone in North America is a relatively new concept," says William "Sandy" Harrison, director of research at Signal Hill, a Baltimore-based specialty investment bank. "If you look at the actual number of handsets currently available [in the U.S.] that employs biometric security, it's not that large."
The current market for IPOs doesn't make things any easier on a company that specializes in an emerging technology. The pace of IPOs in 2008 has slowed to a trickle, with broader market gyrations and economic uncertainty muting investor appetite for risk.
In a relatively new and evolving industry, there has been no lack of private and venture investors in biometric companies, but not all have been successful at developing technology that can work and be integrated into products at a low price, says AuthenTec Chief Executive Scott Moody.
"People who research this industry see the carcasses on the side of the road and want to know why you are different," says Mr. Moody. "So you're talking about a market that is skeptical because of past failures, and investors in general are already skeptical because of the type of stock market we're in today. So it's a double whammy."
Elsewhere in the IPO market:
Animation and special-effects firm Digital Domain failed to price last week, and has been shifted to day-to-day status. That means underwriters will attempt to complete it whenever they can successfully market it to investors.
pippen er begyndt at mumle lidt om et nyt bull marked her i aften
hun sover heller ikke og er ikke taget ud for at 'shoppe', men kigger nysgerrigt på de aktier hun godt kunne tænke sig at købe
hvordan kan en aktie to gange have en lang vækstperiode fra nede omkring 2-3 dollar og op til 30, hvor alle taler om den som den nye vækstaktie over mange år
for så hver gang at falde ned tilbage i bunden igen og over mange år
nu er den på bunden igen og det er en forbrugsaktie, ikke-cyklisk forbrug og den burde kunne stige igen, hvis væksten kommer igang igen i usa
jeg synes ikke den ser ud til at være risikabel sådan som finansaktierne og boligaktierne nede omkring 2-5 dollar er det
http://finance.yahoo.com/q/bc?s=COT&t=my&l=on&z=m&q=l&c=
BEIJING, June 19 (Reuters) - China needs to loosen its monetary policy and boost support for exporters, or growth may fall sharply later this year, government economists said.
They said moderately high inflation was inevitable given global commodity prices and that Beijing should instead concentrate on maintaining fast economic growth, because a serious slowdown could spark social unrest.
Beijing has declared repeatedly this year that its top priority is to fight inflation, which has been running near a 12-year peak. To that end, it has tightened monetary conditions by raising banks' reserve requirements to record heights and enforcing lending quotas.
"If the Chinese government continues its tightening measures, there surely will be problems. Prices won't come down but economic growth will," said Wang Jian, secretary-general of the China Society of Macroeconomics.
"You sacrifice growth to curb inflation. But inflation would still exist even after growth falls. That would be very serious stagflation," said Wang, whose think-tank comes under the National Development and Reform Commission, the powerful economic planning agency.
But a growth-first attitude, while heard in policy circles in Beijing, is not the official line at present. On Wednesday, central bank governor Zhou Xiaochuan reiterated that fighting inflation remained China's top objective, even in the face of a global downturn.
Still, Wang's view was echoed by Long Guoqiang, a senior economist at the Development Research Centre under the State Council, or cabinet, who also presented at this week's Reuters summit in Beijing.
Long said there was already a consensus that China was importing inflation because of high global oil and raw material prices, which tight monetary policy alone was not capable of tempering. Continued...
On the other hand, credit rationing and rising labour costs have forced exporters out of business and reduced China's currency-adjusted trade surplus to a decade low, he said.
PROMOTING EXPORTS
China's rolling 12-month trade surplus narrowed only slightly to $254.7 billion in May from the 2007 record of $262.2 billion, but the real picture is much grimmer when the weakness of the U.S. dollar is factored in, he said.
Since domestic consumption is not strong enough to substitute for weaker exports, he said Beijing needs to consider a raft of measures to help exporters, even rolling back recent policies designed to reduce the country's reliance on exports.
"Policies are like the wheels of a car. They need to keep the car on the right track, neither too far to the left nor the right," Long said in calling for a rethink.
He said China needed to raise export tax rebates -- which the country has been phasing out -- increase regional trade talks and create more hedging tools for exporters to reduce their currency risks.
Wang also said China was well placed to pump up the economy through higher government spending with its coffers in good shape after the country ran on overall surplus last year.
However, both economists conceded that China faced a dilemma in deciding how much weight to give to growth versus inflation in shaping its policies and there was no perfect solution.
"If there was a best choice, we'd have done it long ago," Long said. "Why are we hesitating between different options and even quarrelling? Because we've got to consider several goals -- growth, inflation and long-term price reforms." (Reporting by Langi Chiang; Editing by Simon Rabinovitch)
nu tror man så at olieforbruget i kina falder, men man forstår slet ikke at bilparken og boligbestanden samt bestanden af energiforbrugende erhvervsbygninger, flyvemaskiner, skibe, tog mm vil fortsætte med at stige lige så hurtigt som hidtil uanset om salget af nye biler mm stiger en smule mindre
BEIJING, June 19 (Reuters) - China announced a surprise increase of about 18 percent in retail gasoline and diesel prices effective from Friday, state media said.
It will be the first rise in fuel prices in eight months, a move that threatens to stoke already decade-high inflation.
Prices for gasoline and diesel prices will rise by 1,000 yuan ($145.5) per tonne each.
Oil prices fell $3 a barrel on Thursday on the news on worries that demand from the world's second-largest oil consumer would be hit. China has been one of the main factors driving oil prices to a record near $140.
China last raised pump fuel prices in November.
The move in November took many market watchers by surprise as Beijing has repeatedly vowed to rule out "near-term" price increases to battle high inflation and avoid social unrest barely two months away from the Beijing Olympics.
China also raised jet fuel prices by 1,500 yuan per tonne.
The official Xinhua news agency reported that China will also raise some electricity tariffs from July 1. Continued...
The average electricity tariff would go up by 0.025 yuan/kwh, though exemptions will be granted to urban and rural residents along with some farmers and fertilizer producers, the report said, citing the National Development and Reform Commission.
"Global crude prices have been rising sharply and Chinese domestic fuel prices have lagged behind. The price difference has highlighted the contradiction between demand and supply," said state television, also quoting the National Development and Reform Commission. (Reporting by Carolyn Qu and Chen Aizhu; editing by James Jukwey)
de glider nok i olien, hvis de skal bruge den til at spille fodbold på
så den er fredet i klasse a af det hjemlige vildtreservat og det er også forbudt at smide med bananskaller
mon de får ret i dette?, jeg tror det ikke
lagerreduktionen i rustfrit stål forklarer faldet i nikkelprisen og måske også lidt i zinc, så en opgang i rustfrit kan hurtigt føre til store prisstigninger på nikel
det er underligt at rustfrit falder når almindeligt stål stiger så meget, det plejer at følges ad med rustfrit som den hurtigst voksende ove lang sigt
stål steg efter at råvarepriserne jernmalm og coaking coal steg og det skyldtes at der var mangel på stål og at man hamstrede inden prisstigningerne medens i rustfrit og nikkel har det været modsat, man skar ned lagrene inden prisfaldene
og selvom amerikanerne ikke bruger så mange køkkenvaske og vaskemaskiner mm i 2007-08 som i 2005-06
bruger kineserne jo mere og mere af den slags med en stigning i byggeriet på 25% om året og næsten så mange byggede huse som usa
men de bruger måske køkkenvaske af plastic af dårlig kvalitet
og selv de sorte i afrika vasker hænder så de ikke ser så sorte ud
og det er nok derfor mccain hælder vand ud af ørene så den nye unge præsident kan blive vasket bag de sorte ører
så det er med at finde nikkelminerne frem inden de er steget
Stainless steel demand is likely to remain sluggish for the rest of the year as a gloomy economic outlook dampens demand, an industry expert and producers said on Thursday.
The stainless steel industry started destocking in mid-2007, when producers cut production after costs of key raw materials peaked.
Producers and experts at the British Stainless Steel Association's conference said the destocking cycle has already come to an end, but now economic and inflationary pressures are weighing.
"We expect very little recovery in 2008 in demand," said Peter Kaufmanns, a director at the International Stainless Steel Forum, a leading industry body.
"We see consumer and business confidence steeply down and there are serious worries about inflation," he added.
Stainless steel production has dropped by 8.3 percent and 16.8 percent in the last two quarters of 2007 respectively, compared to a 15 percent and 3 percent growth rate in the first two quarters, Kaufmanns said.
This year, he expected production to rise by 5 percent, adding that inflationary pressures would hit consumers across the globe, even China.
"Chinese consumers can't spend any more on stainless steel consuming goods," he said. Continued...
Andrea Gatti, executive vice president, group sales and marketing at Outokumpu (OUT1V.HE: Quote, Profile, Research, Stock Buzz) said consumer goods-related segments were struggling while some others were in better shape. "We don't foresee completely frozen activity like we faced 12 months ago," he said. "I expect that big buyers or distributors will wait. In September, we will see a pick-up."
"Not a dramatic boom but a pick-up," he said. Finnish Outokumpu is among the top five stainless steel producers.
COMPETITIVE
But for the longer-term, experts agreed that there was further potential for stainless steel use.
"Stainless steel has unchanged good potential for further growth...It's one of the most competitive materials," Kaufmanns said.
He expected 2009 to be better than this year.
"We see 2008 as the bottom of the current economic cycle. In 2009, we can experience a little bit better environment for the stainless market." Continued...
India's larger stainless steel producer saw strong growth in demand for the coming 3 years, thanks to the construction boom.
"Indian consumption growth is seen at around 10-12 percent until 2010," said Nirmal Mathur, director at Jindal Stainless (JIST.BO: Quote, Profile, Research, Stock Buzz), adding that India was the world's No. 5 consumer. (Reporting by Humeyra Pamuk; editing by Peter Blackburn)
Welcome to KSK Emerging India Energy Fund Limited
The Indian energy sector is expected to witness explosive growth over the next decade, and is expected to provide attractive investment opportunities across the entire value chain, ranging from utilities to equipment manufacturing.
The Fund primarily provides expansion capital to companies related to the Indian energy sector in areas like fuels, power, EPC, manufacturing, energy transportation and others primarily in India. The Fund will also consider investment opportunities in companies outside India that have plans for expanding their business in India.
Together with the current standing of the KSK Group in the Indian energy sector and the experience of the Fund management team, the Fund brings significant ability to add value to the investee companies in realising their growth plans.
KSK Group is one of the leading power developers in India. The parent company of the KSK Group, KSK Power Ventur plc (KSK), is listed on the AIM market of the London Stock Exchange, since November 2006.
der er en artikel i Investors Chronicle om indiske aktier i england, altså ikke ADR, men engelske selskaber, der opererer i indien
nogle af dem er en slags investeringsforeninger indenfor bestemte områder f.ex. ejendomme eller andet
mAn må gerne undersøge nogle af dem, hvis man har lyst og skrive konklusionerne her, jeg har ikke tid til at gennemgå dem allesammen, men starter også med et par stykker
alpha tiger pro trust ATPT.L
dev prop development DPD.L
DHIR investments DHIR.L
ERE
EROS
EIH
GMX
GKO
HDY
HRCO
IGC
IHC
IFC
IRGP
ISH
KSK
KUBC
LPX
NBPC
NTBC
OSI
PMCI
SNX
TRC
UMP
UCP
WPR
Shell shuts down Nigerian oil field after attack
Thursday June 19, 3:50 am ET
By Edward Harris, Associated Press Writer
Shell halts production at 200,000-barrel-per-day oil field in Nigeria after militant attack
LAGOS, Nigeria (AP) -- Royal Dutch Shell said it shut down production at an offshore oil installation that produces about 200,000 barrels per day after the most powerful militant group in Nigeria said it launched an attack there Thursday.
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A leader of the Movement for the Emancipation of the Niger Delta told The Associated Press that militants attacked the Bonga oil field more than 65 miles from land. But the fighters weren't able to enter a computer control room, which they had hoped to destroy.
The militant leader spoke on condition of anonymity to avoid punishment by authorities.
Olav Ljosne, a spokesman for Royal Dutch Shell, confirmed an attack, but gave no details. He said production had been stopped from the field.
The militants also said they kidnapped a foreign worker from a supply vessel they met while returning home from the attack, but there was no immediate confirmation of that.
Attacks against offshore facilities are exceedingly rare. Oil industry officials consider their operations on the high seas much safer than those in the creeks and swamps of Nigeria's southern Niger Delta, where most of the attacks during two years of increased violence have taken place.
Militant attacks on oil infrastructure have trimmed about a quarter of total oil production in Nigeria, which is Africa's biggest producer and a member of OPEC.
The turmoil in Nigeria's south has helped send oil prices to historical heights, giving the militants more leverage in their drive to force the federal government to send more oil industry proceeds to their areas.
Despite being the home of almost all of Nigeria's petroleum reserves, the country's south is as desperately poor as the rest of the country, which is Africa's most populous with 140 million people.
But criminality and militancy are closely linked, with many of the militant groups accused of stealing crude oil from wells and pipelines for sale in overseas market and helping politicians rig elections.
Benchmark U.S. coals soared past $120 a ton on Wednesday, as Midwest flooding piled atop world supply-demand fundamentals to drive prices up.
Big Sandy barge coal topped $123 a short ton on the New York Mercantile Exchange. Central Appalachian rail coal on CSX railroad (CSX.N: Quote, Profile, Research) touched $144, market sources said.
"The flooding is certainly tightening things up," a Wall Street analyst said. "But I believe much of the move past $100 has to do with ongoing global fundamentals."
Jim Thompson, managing editor of Coal & Energy Price Report, agreed, and added two factors: the nearness of July maintenance season for the CSX and vacation time for miners.
Vacation season for mines is an industry tradition, and CSX shuts down coal routes during that time to get maintenance out of the way while minimizing market impact, Thompson said.
So far, floods on the upper Mississippi River have impacted mainly Powder River Basin coal deliveries, some of which cross the river by rail headed East, market sources said.
Some Illinois Basin and Appalachian coal deliveries also could be affected as the flood crest moves downstream, experts have said.
Segments of the rail lines near the river are underwater, and coal barges on the upper river have been stranded by closure of locks that raise and lower them, traders said. (Reporting by Bruce Nichols; Editing by Christian Wiessner)
............
BANGALORE, June 17 (Reuters) - Surface and underground mining equipment makers in the United States are riding high on surging global demand for coal, raising hopes that the upswing in this industry is here to stay for a while.
Coal demand has been steadily increasing with rapid industrialization in China and India and new coal-fired power plants coming online in Britain, Europe and the United States.
Two of the largest U.S. mining equipment makers -- Joy Global Inc (JOYG.O: Quote, Profile, Research) and Bucyrus International Inc (BUCY.O: Quote, Profile, Research) -- have been posting solid sales for the last few quarters, with miners striving to meet demand.
Joy Global and Bucyrus are the only U.S.-based companies that specialize in making giant shovels, drills and draglines used to extract coal, copper, iron ore, oil sands and other minerals.
Industrial machinery giants Caterpillar (CAT.N: Quote, Profile, Research) and Terex (TEX.N: Quote, Profile, Research) also have units that make mining-support equipment such as trucks and loaders, but not specialized excavators.
"If the demand for coal is up, if coal companies are making money, they are going to be spending more on equipment," Sterne, Agee & Leach analyst Ben Elias said.
The gap between coal demand and supply could reach 60 million to 100 million tons this year, Joy Global said in May.
Some U.S. coal officials see a shortage of 25 million to 35 million tons this year in the 6-billion-ton world market and a shortfall of perhaps 70 million tons next year.
The supply-demand gap has been exacerbated by an export ban that China imposed after it was hit by the worst snowstorms in 50 years in January, pushing prices up.
Joy Global has forecast a supply deficit in mineral markets for the next three to five years or longer.
Coal mining accounts for about 80 percent of the revenue of Joy Global and Bucyrus, whose customers include mining giants such as Australia's BHP Billiton (BHP.AX: Quote, Profile, Research) (BLT.L: Quote, Profile, Research), Brazil's Vale (VALE5.SA: Quote, Profile, Research)(RIO.N: Quote, Profile, Research) and Britain's Rio Tinto Ltd/PLc (RIO.L: Quote, Profile, Research).
Shares of both companies have almost doubled since the fourth quarter of 2007, roughly when coal prices started shooting up in the United States, and both are trading near their lifetime highs.
The broader Dow Jones U.S. industrial engineering index .DJUSIQ has remained largely flat during the period.
THE CHINA CONNECTION
Briggs-Ficks Securities analyst John Collopy said the biggest increase in volume for both companies is coming from developing markets.
"Whether it is China, India or Russia, there is a big demand for equipment," he said.
In April, Bucyrus entered into a joint venture with China's Huainan Mining Industry (Group) Co Ltd to set up a manufacturing facility in the Huainan mining area.
"Foreign markets are incrementally the big ticker for these companies," Collopy said. "The more aggressive growth is going to be offshore in the foreseeable future."
Last quarter, Joy Global's sales rose 34 percent to $843 million, with almost half coming from the international market. New orders for the period jumped almost 70 percent to $1.2 billion.
Sales at Bucyrus more than doubled to $517 million, with orders rising to $1.09 billion. The current-year figures reflect the company's acquisition of Germany's DBT GmbH for $710 million in cash last year.
"If the orders and backlog continue to grow over the next several quarters, the two stocks will continue to perform decently," Briggs-Ficks' Collopy said.
APPALACHIAN BOOM
Interest in U.S. coal, previously deemed too expensive, has also heightened, especially coal from the Appalachian Mountains in the eastern United States.
Appalachian coal output, which accounts for more than a third of U.S. production, had remained soft till last year as it is harder to tap into.
"High Appalachian coal prices made investment in underground mining equipment attractive," analyst Paul Bodnar of Longbow Research said in a note last month.
Underground mining accounted for about half of total revenue for both Joy Global and Bucyrus.
Bucyrus entered the underground mining equipment market through last year's acquisition of DBT.
PRICE SAFEGUARDS
These companies are relatively immune to rising raw material costs as they have price escalators built into their contracts, so they are able to pass on higher prices to customers.
However, analysts said the companies should be judicious in capacity expansion, as strong order growth often leads to over-investment and excess capacity addition.
Even miners in the United States are cautious in their expansion plans, fearing a boom-bust cycle, declining reserves and tightening regulation.
"Mining equipment making is still a cycle," Longbow's Bodnar said. "There still will be a downturn and you want to make sure that you expand rationally."
Bodnar said both companies are in pretty good shape from a capacity standpoint.
A pullback in commodity prices, a U.S. cap on carbon emissions or lumpier-than-expected order activity could trigger a pullback in their share prices.
"If the prices of commodities begin to soften, that would probably take some of the fluff out of the stocks at that moment," Briggs-Ficks' Collopy said. (Editing by Saumyadeb Chakrabarty, Anil D'Silva)
gassen i 13.3
U.S. Gas Price May Rise on Asian Demand, Goldman Says (Update1)
By Dinakar Sethuraman
June 19 (Bloomberg) -- U.S. natural gas prices, which have surged 78 percent this year, may extend gains because of competing demand for liquefied natural gas from Asia and Europe, Goldman Sachs Group Inc. said.
LNG consumption in Asia and Europe may increase on stronger economic growth, emission costs and surging prices of alternate fuels such as oil and coal, the investment bank said in a June 18 report. Goldman cut its estimates for U.S. demand for 2008 by 13 percent to 1.54 billion cubic feet a day (12 million metric tons a year).
``We believe U.S. natural gas prices will likely remain in the $12.70-to-$13.20 per million British thermal units range, in line with international prices,'' Goldman's analysts, Samantha Dart and Jeffrey Currie, said in the report e-mailed to Bloomberg today. ``However the observed tightness in the LNG market suggests that risks to our price forecasts remain skewed to the upside.''
LNG demand is set to increase by 10 percent a year through 2015, more than five times estimated gains in crude oil, as power producers switch to cleaner fuels, according to Citigroup Inc. Asian purchases of LNG have risen after Tokyo Electric Power Co. shut its Kashiwazaki Kariwa nuclear plant since July 2007 because of earthquake damages.
LNG is natural gas that has been chilled to liquid form, reducing it to one-six-hundredth of its original volume, for transportation by ship to destinations not connected by pipeline.
First Quarter
Natural gas futures reached $13.295 per million British thermal units on the New York Mercantile Exchange today, the highest since December 2005.
Goldman, the world's biggest securities firm, raised its forecast for Japan and South Korea's LNG demand by 3.3 percent to a combined 13.17 billion cubic feet a day. European LNG demand may climb 1.9 percent to 5.85 billion cubic feet a day, the report said.
Consumption of LNG in Asia, including Taiwan, China and India, averaged 17 billion cubic feet a day in the first quarter, exceeding Goldman's previous forecast by more than 1 billion cubic feet, and about 13 percent higher than a year earlier, according to the report.
``The higher-than-expected increase in LNG demand from Asia and Europe came at the expense of the U.S.,'' the authors said.
The increase in Asian LNG purchases was led by South Korea and Japan as the gain in oil prices and declines in nuclear generation capacity prompted power plants to switch to natural gas, the report said.
stort set alle traditionelt cykliske aktier, altså dem med infrastruktur/maskiner til råvarer/energi og råvare/energiaktierne faldt sammen med panikken i efteråret sidste år og begyndelsen af 2008
fordi alle bankfolk, journalister og andre grødhoveder troede at nedgangen i usa på bolig og finansområdet skulle trække hele verden med ned og skabe en nedgang i investerings og råvare/energi boomet
så derfor faldt først boligaktierne, så finansaktierne og forbrugsaktierne og så de ovennævnte infrastruktur/råvareaktier
men nu har markedet efterhånden fundet ud af at verden stadig boomer og at de aktier, der var stærke de seneste år fortsat er dem der er styrke i især i ordrer og indtjening, men også i råvare og energiforbrug
derfor stiger de igen og vil stige meget mere
perioden fra midten af 2007 il foråret 2008 var et eksempel på et massehysterisk krak, baseret på at ingen forstod hvad der foregik og markedet troede på en global recession og især de aktier som BQI, der ikke tjente penge - endnu - blev ramt ekstra hårdt
det var kun os der forstod det
og nu retter aktierne sig ind efter den virkelighed, der findes ude i verden og derfor stiger alle de aktier voldsomt igen
mange amerikanske maskinaktier er steget 50-100% siden bunden i januar selvom de amerikanske maskinaktier er de mest sårbare fordi en del af hjemmemarkedet er ramt af nedgangen i byggeriet mm
så det er bare med at købe videre i den slags aktier og glæde sig over at de er blevet så billige
pippen glæder sig allerede til jul og regner med store julegaver, jeg har lige set en aktie med en PE på 10, der producerer tanzanite, der er en meget smuk diamantagtig sten, der kun produceres i tanzania, aktien hedder tanzaniteOne og den er uden tivl en god investering, for prisen på den slags følger guldpriserne sådan omtrent da og pippen tror bestemt at hun får sådan een til jul, den koster jo ikke mere end et par millioner
Japanese-Swedish handset maker Sony Ericsson (6758.T: Quote, Profile, Research, Stock Buzz)(ERICb.ST: Quote, Profile, Research, Stock Buzz) said on Tuesday it projected strong demand for the global handset industry in the second quarter and the second half of this year.
"We had a slightly slower start to the year due to some economic downturn in Western Europe and due to overstocking in channels in Q4, which meant inventories were higher going into 2008. That was a short-term issue," Sony Ericsson's head of global marketing James Marshall told Reuters in an interview.
He said the firm was keeping its 10 percent growth forecast for the global handset market this year.
"Projections for this quarter and the second-half of 2008 looks strong -- that's why we can keep the 10 percent growth projections," he said.
In April, Sony Ericsson posted a 47 percent dive in first-quarter profits, slipping to fifth place in global market share as demand slowed for its more expensive camera and music handsets.
The results were broadly in line with the company's forecast when it warned on profits last month, spelling an end to a long string of bumper quarterly results and market share gains.
Coupled with component shortages, first-quarter pretax profit fell to 193 million euros ($306 million) from 362 million euros a year ago.
pippen faldt ud af sengen og det var meget værre end at falde ned fra rundetårn
når man falder ud af sengen kan man nemlig ikke nå at få startet vingerne før man allerede er havnet på gulvet
det er ligesom med påbegyndt boligbyggeri, markedet for lastbiler i usa viser heller ikke tegn på en begyndende opgang endnu i de sektorer, der er knyttet til bolig, bil, forbrug og den slags i den indenlandske efterspørgsel, så det er stadig kun eksporten, produktionen i udlandet og virkningen af det globle råvareboom og investeringsboom på de mange sektorer i usa, der har glæde af boomet, der holder usa så meget oppe at recessionen er meget mild og nok alligevel er ved at være slut
WOERTH, Germany, June 18 (Reuters) - Daimler AG (DAIGn.DE: Quote, Profile, Research, Stock Buzz) is still awaiting a rebound in the North American heavy trucks market, the head of the world's biggest truckmaker told Reuters, but he held out hope an upturn could emerge before year's end.
"We're waiting," Daimler Trucks division head Andreas Renschler said on the sidelines of an event on Wednesday to open a Daimler development centre in Woerth, south western Germany.
Asked if Daimler's forecast for a rebound as early as the second half of the year was still valid, he said: "Hopefully. I don't know."
Renschler cited fallout from the U.S. mortgage crisis and the collapse of the U.S. construction market as reasons why it was hard to predict developments in the U.S. trucks market.
But he added: "There is still a good chance of a recovery in the second half. We will see."
He said the truck markets in western and eastern Europe were doing well even though order inflow was not as high as last year, when the European market was booming.
"The second market that is not doing well (in addition to North America) is Japan, but fortunately at (Japanese unit) Fuso we have exports that are more than offsetting that," Renschler said.
Daimler shares were off 0.6 percent at 44.81 euros by 1230 GMT, while the DJ Stoxx European car sector index fell 1.1 percent. Continued...
Renschler said discussions about opening a trucks assembly plant in Russia were "well on the way", although the company was still working out details such as a manufacturing site.
He played down speculation Daimler could take a stake in Russian truckmaker Kamaz (KMAZ.MM: Quote, Profile, Research, Stock Buzz), saying that the price being demanded was high and its location was unfavourable.
Daimler had said in April it expected brisk demand from Asia and eastern Europe to help boost unit sales and operating profit at its market-leading trucks business in 2008.
The trucks division's first-quarter EBIT fell 24 percent to 403 million euros ($623 million) primarily due to the tense economic situation in the United States and a buying spree in 2006 that preceded the introduction of tougher U.S. emissions standards last year.
A bottleneck at a supplier in Europe also hurt output in the first quarter, but it said at the time it could catch up over the rest of the year.
It said it saw no sign of a recovery in the North American heavy truck market at the time, which meant a cyclical upturn would come in the second half of the year at the earliest.
pippen har bare fået solstik og regner med at hun springer ud fra rundetårn med sin nye læbestift, men jeg fortalte hende at hun kunne flyve, så falder man jo ikke ned
OSLO, June 18 (Reuters) - Norway's Renewable Energy Corp (REC) (REC.OL: Quote, Profile, Research, Stock Buzz) plans to invest close to 13 billion crowns ($2.51 billion) in the first phase of a complex to produce solar wafers, cells and modules in Singapore, REC said on Wednesday.
REC, one of the world's biggest solar-grade silicon producers, unveiled the plan to build the Singapore complex in October last year. It said then that initial investment would be 3 billion euros ($4.64 billion) over the next five years.
The company's shares jumped as much as 5.9 percent on the confirmed plan, partly because it removed uncertainty that REC might need to raise capital by issuing new shares.
"The estimated capital expenditure of close to 13 billion Norwegian crowns allows for contingencies and cost escalation due to inflation, and also includes a yet unallocated project reserve," REC said in a statement.
The investment will be financed from operating cash flow, existing and new credit facilities, REC said.
REC has agreed a fully underwritten facility from ABN AMRO, BNP Paribas, DnB NOR, Nordea and SEB covering new loans and guarantees of 10 billion crowns at market terms, it said.
"This is fully funded, and we can remove all speculation regarding a need to raise more equity financing," Chief Executive Erik Thorsen told a news conference. Continued...
The bulk of the capital expenditure, or 65-70 percent, will come in 2009 with a peak in the second quarter, he said.
The investment is the first in Asia for REC, which has production plants in Norway, Sweden and the United States.
Production is expected to start in the first quarter of 2010, and reach full capacity of 740 (megawatts) of wafers, 550 MW of cells and 590 MW of modules before 2012, REC said.
The annual consolidated revenues from these volumes are expected to be 10-11 billion Norwegian crowns in 2012, REC said.
The investment covers the first of several planned development phases, REC said and added it expected to decide on the next phase in 2009.
"Our entry into Singapore ensures continued revenue growth beyond the significant growth to come from all the ongoing capacity expansions across all REC's business activities," Thorsen said in the statement.
REC shares traded up 4.4 percent at 154 crowns at two-week highs after earlier reaching 156.25. The stock is down 44 percent this year, hit by news early in the year of cost overruns and delays that would make it miss its 2008 targets.
The Singapore expansion should lift REC's total production to around 2,400 MW of wafers, 780 MW of cells and 740 MW of modules in 2012, securing a significant presence for REC in key solar markets, Thorsen said.
"This investment supports REC's position as a leading provider of highly competitive solar energy solutions, and in achieving our main corporate goals of reducing costs and securing profitable growth," Thorsen said.
He said the project costs should enable REC to compete profitably in several markets at prices on par with electricity produced at conventional power plants.
The company has secured supply of polysilicon, the material used in solar wafers, through its continuing expansion of production plants at Moses Lake, Washington and Butte, Montana in the United States, REC said.
REC has signed preliminary deals with suppliers of engineering and equipment and it would immediately begin detailed engineering and early construction with a target of ramping up production early in 2010.
REC also said it would invest up to 400 million crowns to expand wafer production capacity at its plant at Heroya, Norway. (Editing by Sue Thomas, Paul Bolding)
EU Rethinks Farm Subsidies, Seeks More Production
de er sindsyge i europa med alle deres subsidier og overførselsindkomster
der er snart ikke flere der tjener deres penge ved at producere eller arbejde
enten er man på overførselsindkomst eller modtager subsidier
Getting Nations
To Cut Their Aid
Remains Difficult
By JOHN W. MILLER
June 18, 2008; Page A9
BRUSSELS -- With global food prices soaring and arable land in short supply, the European Union finds itself at loggerheads over how to overhaul a subsidy system that frequently pays landowners not to grow crops.
The subsidies, dreamed up when overproduction was a greater concern, have gone to people like John and Gitte Abrahamson. They get $1,500 a year from the EU for renting out 37 acres in rural Denmark to a riding club.
The money came from the EU's $75 billion in annual farm support, at one point designed to cut surplus production and prevent a collapse in food prices. But now EU officials are looking to encourage farm production.
Last month, the EU suspended a requirement for farmers to keep 10% of land fallow and raised quotas that limit the amount of milk each EU nation is allowed to produce. It's proving much tougher for nations to agree on removing individual subsidies or figure out how to use EU farm money to lower food prices.
Denmark pays $500,000 a year to riding schools. The United Kingdom spends $800 million a year on environmental programs such as planting hedgerows that farmers otherwise tear up to improve efficiency. Poland has budgeted close to $1 billion this year for programs, mainly reforestation, to take land out of farming.
France, which takes over the rotating EU presidency next month, believes it is time to rethink those policies. French politicians want the EU to go back to paying farmers a set amount for every ton of specified crop grown, to stimulate production. The EU has been abandoning that practice in recent years because the World Trade Organization says production-linked subsidies create unfair competition.
Other EU countries think France is wrong. U.K. officials believe high EU subsidies have depressed global food production because the EU dumped its surpluses on developing markets at low prices, discouraging local production. The U.K. wants to phase out production-linked subsidies altogether. It believes the EU can increase efficiency of land use by giving rural landowners an amount of money per hectare, leaving the market to decide what is most profitable for them to do with the land.
Economists say subsidies of any kind are unlikely to bring down global food prices. "The only proven way of bringing down prices is increasing productivity through research," says Hafez Ghanem, director of economics for the Rome-based Food and Agriculture Organization.
EU law, however, prohibits the $75 billion of farm aid from being used for research. Funds for research -- some $420 million a year -- come from the bloc's much smaller $10 billion research-and-development budget. The U.K. and others have argued for transferring more money from farm aid to research, but so far they don't have enough support to overcome opposition from countries with strong farm lobbies.
"There's no longer a common Common Agriculture Policy," says Jack Thurston, founder of farmsubsidy.org, a Brussels-based monitoring group. "So every country has an interest in keeping the status quo."
The U.S. isn't so different from the EU when it comes to farm aid. Nearly a quarter of the U.S.'s recent five-year, $307 billion farm bill goes to farmers. The rest goes to things such as food stamps, nutritional education and crop and biofuels research. Cutting the size of the overall farm bill has also proved impossible.
French farm country, like the U.S. Midwest, is doing well on the back of record wheat prices and high subsidies. Despite the high prices, "farmers remain wedded to their subsidies, because it's such a volatile business," says Alain Lepicard, an agriculture trader based in Yerville, in the north of France.
Rural nonfarm subsidies in the U.K. are planting some deep roots, too. Jane Bendall says she will never again grow wheat on the 140-acre farm in southern England, where for three generations her family grew wheat and raised cattle. Around 1990, low calf prices persuaded Mrs. Bendall to expand a roadside vegetable store and to market her farm as an attraction for tourists and students.
The U.K. government gives her $10,000 a year in EU aid money to grow higher hedges and make buffer strips around her fields -- creating a more attractive environment for birds and bats. Britain's Royal Society for the Protection of Birds, one of the world's biggest animal-welfare charities, is now a strong supporter of the EU farm subsidy program.
THE FOOD CRISIS
• See more coverage of the sharp rise in food prices world-wide.Even the most unpopular subsidies can be hard to cut. In 2003, EU countries agreed to halve tobacco subsidies to $500 million a year, and to eliminate the aid in 2010. Although the EU was already carrying out antismoking campaigns, that agreement proved a headache to secure. The U.S. got rid of tobacco aid in 2002.
EU tobacco-producing countries -- Italy, Greece, Spain, France, Poland, Bulgaria and Portugal -- are still fighting back. In May, the European Parliament voted 379-244 to extend the subsidies by three more years to 2013. For that to happen, a majority of the EU's 27 nations will have to agree. France plans to put the issue to vote after it takes over the EU's rotating presidency next month, according to people familiar with the matter, though it isn't clear the effort will succeed.
For countries like Spain, tobacco means jobs. The sandy plains between Madrid and Portugal have grown tobacco since Columbus's time -- Spanish beggars invented the paper cigarette in the 16th century. "There isn't anything else to do here," says José Fonseca, a manager at Agroexpansion, a Malpartida de Plasencia-based tobacco processing company. Without the EU subsidies to provide him with raw tobacco leaves at globally competitive prices, he'll go bankrupt, he says.