Saturday, June 30, 2007

A Worldly View

7/1/07 A Worldly View

India's foreign-exchange reserves increased $1.53 billion to $212.55 billion in the week ended June 22.

The Canadian dollar this week traded to a 30-year high against the dollar.

Money-supply growth in the euro region unexpectedly accelerated to close to the fastest pace in 24 years in May.

According to the WSJ, on Friday, the Agriculture Department, which regulates the minimum milk prices received by farmers, set the price that processors will have to pay for drinkable milk in July at $20.91 per hundred pounds of milk, up 17% from the June price and up 84% from a year earlier.

Doug Noland: "Yet late June's hedge fund and CDO problems appear more all-encompassing and ominous. February was about U.S. subprime mortgages, while the issue gravitated toward the heart of "contemporary finance" as the second quarter winded down. To be sure, the story of the historic first half ends with serious questions regarding the sustainability of Global Credit Bubble excess. It has "inflection point" written all over it...Is subprime risk in CDOs the proverbial "tip of the iceberg?" Of course it is. The central issues of problematic liquidity dynamics, fair and accurate pricing, and speculative leveraging excesses today permeate the entire global Credit system...The perpetuation of the subprime boom was the (only) means for an overheated Credit system to finance the marginal borrower - in order to sustain the housing/mortgage finance Bubbles. Enormous festering risks were well-concealed by the illusion of perpetually rising asset prices and limitless market liquidity...A serious market liquidity problem will commence with any move by the leveraged speculators to aggressively hedge risk and/or place bearish bets...And today's surging oil prices, widening Credit spreads and weak dollar wouldn't appear to portend bullishness. It's official, we're now on Second-Half Liquidity Problem Watch."

Between The Hedges: "Sloppy action over the last few days appears to me to be a function of buyers stepping away after a great quarter and aggressive funds selling/shorting winners. I expect large buyers to re-emerge next week. I also think better-than-expected earnings, a break below 5% in the 10-year yield, diminishing subprime fears and a large acquisition could provide upside catalysts for the broad market over the coming weeks."

The Oil Drum: "Crudes used as feedstock to refineries are becoming increasingly heavy and sour...More gasoline can be derived from a barrel of light sweet than heavy sour crude...A few questions that come to mind that readers of the Oil Drum may be able to offer thoughts on:
1. To what degree might low refinery utilization rates be a function of the inability of some refineries to process the heavier/sour crudes? Likewise, to what degree might refinery outages/unplanned maintenance be a function of the increasing use of heavy sour grades of crude? Finally, to what degree might low gasoline production rates also be a function of increasingly sour/heavy crude oil used as refinery inputs due to lower gasoline yields for the lower quality crudes?
2. Do trends in the quality of oil imports provide any evidence to support the theory that light sweet crude may have already peaked?
3. How long does it take to upgrade or expand a refinery to handle these lower quality crudes, and what kind of progress on this front has been made over the last several years?"

Venezuelan President Hugo Chavez told Russian legislators he wanted oil producers to cooperate to keep oil prices above $60 a barrel. ``Sixty dollars as a floor,'' he said earlier today to the Duma in Moscow. ``For a ceiling, as high as it can go.''

The Supreme Court agreed Friday to consider whether prisoners at Guantánamo Bay, Cuba, have been wrongly held for years without a fair chance to plead their innocence.

Mohammed Hadi Nejad-Hosseinian, Iran's deputy oil minister for international affairs: "If the government does not control the consumption of oil products in Iran ... and at the same time, if the projects for increasing the capacity of the oil and protection of the oil wells will not happen, within 10 years, there will not be any oil for export."

John Mauldin: "Almost 65 percent of the bonds in indexes that track subprime mortgage debt don't meet the ratings criteria in place when they were sold, according to data compiled by Bloomberg... Nothing helps concentrate the mind like the prospect of a hanging, said Judge Roy Bean. And nothing helps you focus on risk like a serious loss in your portfolio."

Sweden-based mining and exploration company Lundin Mining Corp. on Saturday said it had raised its takeover offer for Canadian company Rio Narcea Gold Mines Ltd. The company offered 5.50 Canadian dollars (€3.85; US$5.20) per share and extended the acceptance period for the offer to July 16. The previous offer, launched in April, was C$5(€3.5; US$4.7) per share.

A magnitude 5.8 earthquake rattled Corfu and other western Greek islands Friday but there were no immediate reports of injuries or damage, authorities said.

BCE announced that the company has entered into a definitive agreement for BCE
to be acquired by an investor group led by Teachers Private Capital, the
private investment arm of the Ontario Teachers Pension Plan, Providence
Equity Partners Inc. and Madison Dearborn Partners, LLC. The all-cash
transaction is valued at C$51.7 billion (US$48.5 billion), including C$16.9
billion (US$15.9 billion) of debt, preferred equity and minority interests.
The BCE Board of Directors unanimously recommends that shareholders vote to
accept the offer.
Under the terms of the transaction, the investor group will acquire all
of the common shares of BCE not already owned by Teachers for an offer
price of C$42.75 per common share and all preferred shares at the prices
set forth in the attached schedule. Financing for the transaction is fully
committed through a syndicate of banks acting on behalf of the purchaser.

Friday, June 29, 2007

End Of The Quarter

6/30/07 The End Of The Quarter

China's economy is expected to grow 10.8 percent in 2007, the fastest rate in more than a decade, while the consumer price index will rise 3.2 percent, the central bank's research bureau said in a report published Friday.
It would be the fifth straight year that China's growth has topped 10 percent, and the highest growth since gross domestic product rose 12.6 percent in 1994.
The People's Bank of China said it expected GDP would moderate to 10.9 percent in April-June, down from 11.1 percent year-on-year growth in January-March. The report was carried in Friday's issue of the state-run newspaper China Securities Journal. This growth should keep a firm bid for metals, oil and gas, and many soft commodities.

Japan's jobless rate held steady in May at its lowest level in nine years, while the country's core consumer price index fell for the fourth straight month, the government said Friday. The jobless rate stood at 3.8 percent in May, unchanged from April and its lowest since March 1998, the Ministry of Internal Affairs and Communications said.

India, Pakistan and Iran are close to signing an agreement on transporting natural gas from Iran to the two South Asian countries via a land pipeline by 2011, Indian officials said Friday.

Brad Setser: "Half a trillion dollars apparently doesn't get the respect it used to. Neither the author of last week’s Economics Focus column nor Morgan Stanley’s Stephen Jen think that the Chinese yuan (or RMB) is undervalued, despite annual reserve growth that would have been around $350b last year but for $100b or so of debt purchased by Chinese state institutions and that could approach $500b this year."

Unemployment in France has reached a 25-year low - dropping 0.9% in May to 2.2 million, the government said. The decline takes the jobless rate to 8.1%, still giving France one of the worst unemployment records in Europe.

Five American soldiers were killed and seven wounded in a coordinated attack in southern Baghdad involving a roadside bomb and rocket-propelled grenades, the U.S. military announced Friday.
The deaths brought to 99 the number of U.S. troops who have died in Iraq this month, according to an Associated Press count. The toll for the past three months -- 329 -- made it the deadliest quarter for U.S. troops in Iraq since the war began in March 2003. At least 3,576 members of the U.S. military have died since then, according to AP figures.

Komag, the maker of computer disk-drive components, agreed to be bought by Western Digital for $32.25 a share, or $1 billion, in cash.

Apple Inc. may not be able to meet demand for its iPhone, Chief Executive Officer Steve Jobs said. The iPhone hasn’t had an effect on iPod sales, Jobs said.

Exxon Mobil Corp., the world's largest publicly traded oil company, shut ``several operating units'' for planned maintenance at its 605,000 barrels-a-day Singapore refinery. Repairs to units at the Jurong site started today, and will continue for about seven weeks, the company said in an e-mailed statement.

Crude oil supplies in the U.S. Midwest fell to their lowest since March as refineries started making more gasoline to meet summer demand. Crude stockpiles in Cushing, Oklahoma, where the West Texas Intermediate benchmark crude is priced, fell by 1.5 million barrels last week, the Department of Energy said. Refineries increased runs to 89.4 percent of capacity for the same week. West Texas Intermediate, or WTI, ``will come back above Brent oil,'' said Rob Laughlin, a senior broker at Man Financial Ltd. ``It's only a matter of time.''

More government numbers. Core consumer prices increased just 0.1% as expected in May, which exclude food and energy costs - are up just 1.9% in the past 12 months. However, higher energy prices pushed up overall inflation to a 0.5% gain in May, eating into consumers' disposable incomes and spending. Real consumer spending increased 0.1% in May, the third straight month of tepid spending. Real disposable incomes fell 0.1%, the second straight decline. In nominal terms, incomes rose 0.4%, while spending increased 0.5%, weaker than expected.

PT Pertamina, Indonesia's state oil company, will shut its Dumai refinery in Sumatra for 30 days of maintenance starting by early November, a company official said. The refinery can process 120,000 barrels of oil a day, Suroso Atmomartoyo, the company's director of processing, told reporters.

U.K. natural gas for delivery next month rose for a fourth day, narrowing its discount to prices for immediate supplies of the fuel.
July natural gas rose 3.2 percent to 19.4 pence a therm at 8:20 a.m. in London, according to prices on Bloomberg from the energy broker ICAP Plc. That's the highest since June 11.
Natural gas for delivery today traded at 21.5 pence a therm. Yesterday's last price for day-ahead deliveries was 21 pence.
Supplies of the fuel, projected at 207 million cubic meters in the 24 hours through 6 a.m. tomorrow, may fall short of an expected demand of 208 million cubic meters, according to a forecast on the Web site of National Grid Plc, the U.K.'s gas network manager. The seasonal normal demand is 175 million cubic meters a day.

From The Jones Report via George Ure: "Former Transportation Secretary Norman Mineta answered questions from members of 9/11 Truth Seattle.org about his testimony before the 9/11 Commission report. Mineta says Vice President Cheney was "absolutely" already there when he arrived at approximately 9:25 a.m. in the PEOC (Presidential Emergency Operations Center) bunker on the morning of 9/11. Mineta seemed shocked to learn that the 9/11 Commission Report claimed Cheney had not arrived there until 9:58-- after the Pentagon had been hit, a report that Mineta definitively contradicted. Norman Mineta revealed that Lynn Cheney was also in the PEOC bunker already at the time of his arrival, along with a number of other staff." I find this fact has significant implications.

Zman: "Enbridge said it’s Line 4 730,000 Bopd which carries oil from Alberta to Wisconsin was without power last Friday through Tuesday after a string of Tornado ripped through Manitoba. Although the company didn’t specify just how much volumes were reduced on a pipeline of that size you can bet that means somewhere around 1.5 to 2.0 million barrels won’t be around for next Wednesday’s oil report. Enbridge said they can make the volumes up in July."

The Chicago purchasing managers index fell to 60.2% from 61.7% in May.The new-orders index fell to 65.7% from 71.1%, the prices-paid index fell to 68.1% from 70.2% and the employment index fell to 52.7% from 57.3%.

The UMich consumer sentiment index rose to 85.3 in late June from 83.7 earlier in the month.

New York-based investor group Hidary Group said Friday it raised its cash bid to purchase boxing equipment maker Everlast Worldwide Inc. to $175 million, in a move to top rival Brands Holdings Ltd.'s $168 million offer. Hidary is now offering $31.25 per share for Everlast, which on Thursday paid $3 million to end its previous $146 million buyout agreement with Hidary Group, preferring Brands Holdings' offer.

CHC Helicopter Corp. has been awarded two contracts by Statoil ASA for the provision of helicopter services in the Norwegian Sea. Vancouver-based CHC said it believes the award represents the largest bundle of helicopter service contracts ever awarded, with a total value of roughly C$1.1 billion over the fixed and option periods.

An official at CPC subsidiary China National Oil and Gas Exploration and Development Corp. confirmed that the company would explore for oil in Canada, but declined to offer any more details. According to a statement the Chinese Ministry of Commerce posted on its website Friday, officials at the Canadian province of Alberta granted the company exploration rights for 11 fields covering a total area of about 260 square kilometers in January. Financial terms were not disclosed.

Iran is limited in refinery capacity, and the decision to ration is seen as the Government's way of trying to cut consumption, ahead of any UN sanctions on the country over its nuclear program. Iranians were given two hours notice, at 10:00pm local time on Wednesday night, that petrol rationing would begin at midnight. Motorists rushed to petrol stations to fill up their cars before the deadline, choking the city's streets. Under the new rules, drivers will be restricted to buying 100 litres of petrol a month, or just over three litres a day.

A bomb exploded Friday under an oil pipeline south of Baghdad, spilling crude oil and sparking a huge fire, Iraqi police said. The pipeline transmits crude oil from Iraq's southern oil fields to the Dora refinery in Baghdad.

AT&T Inc. has agreed to buy Dobson Communications Corp. in a deal valued at $2.5 billion to $3 billion, according to a media report late Friday. The transaction, which was reported on the Web site of the Wall Street Journal, would value Dobson at between $14.50 and $17.50 a share.

For the month of June, the Dow fell 1.6%, the S&P 500 fell 1.8%, while the Nasdaq fell fractionally.

August crude closed at $70.68 a barrel Friday, a fresh nine-month high for the contract. It was up $1.11 for the day, up 8.8% for the month, and up 2.8% for the quarter. August natural gas climbed 11.8 cents, or 1.8%, to finish the day at $6.773 per million British thermal units, but it was down almost 16% for the month and dropped 16.5% for the quarter.

August gold closed at $650.90 an ounce Friday, up 50 cents for the session. But it was down 3.6% for the quarter, down 2.4% for the month and down 0.9% for the week. September silver fell to $12.473 an ounce, closing 3.2 cents lower for the session. It was down 8.9% for the quarter. And September copper closed at $3.4505 a pound, up 2.3 cents for the day, and up 10.6% for the quarter.

The number of rigs drilling for oil and natural gas in North America rose by 30, or 1.5%, to 2,006, according to a weekly update by Baker Hughes Inc. on Friday. The U.S. rig count increased by four from last week to 1,775, while the offshore rig count fell by three to 77. The Canadian rig count rose by 26 to 231. In addition, the number of gas rigs fell by 6 to 1,489, while the oil rig count rose by 10 to 281, Baker Hughes reported.

July soybeans rose 6.4% to $8.615 a bushel on the Chicago Board of Trade after the U.S. Department of Agriculture estimated the soybean planted area for 2007 at 64.1 million acres, down 15% from last year's record high. July cotton rose 4.3% to 59.43 cents a pound on the New York Board of Trade. The USDA pegged estimated cotton plantings for 2007 at 11.1 million acres, down 28% from last year and at the lowest level since 1989. And July corn fell 2.5% to $3.31 a bushel, with the USDA estimating corn plantings for 2007 at 92.9 million acres, up 19% from a year ago.

As we begin the new quarter next week, one might consider the state of the U.S. Dollar Index. At a trading level of 81.70, and close to a 52-week low, it reflects poorly on the appetite for our currency as well as the health of our economy.

Thursday, June 28, 2007

The iPhone Arrives

6/29/07 The iPhone Arrives

Wang Xinpei, a spokesman for the Commerce Ministry, said China "has paid great attention" to the issue, especially food products because it concerns people's health. "It can be said that the quality of China's exports all are guaranteed," Wang told reporters at a regularly scheduled briefing.

Germany's unemployment rate fell to the lowest level in 12 years in June as growth in Europe's largest economy encouraged companies to invest and hire. The jobless rate, adjusted for seasonal swings, declined to 9.1 percent from 9.2 percent last month, the lowest since March 1995, the Nuremberg-based Labor Agency said.

Edwin M. Truman, a former senior official at both the Federal Reserve and the Treasury and now at the Peterson Institute for International Economics, told the conference, ``The accumulation of a vast amount of reserves and other official cross-border investments is likely to be a major source of internal and external controversy and tension going forward.'' The external problem is that ``the lack of transparency and accountability governing these holdings poses risks to the global financial system,'' Truman said. ``Uncertainty and a lack of information breed volatility and the potential for counter- productive actions.''

The U.S. economy expanded at an annual pace of 0.7 percent in the first quarter, the slowest in four years, and a gauge of inflation watched by the Federal Reserve was unexpectedly revised up. The Fed's preferred inflation measure, which is tied to consumer spending and strips out food and energy costs, rose at a 2.4 percent annual rate, faster than the 2.2 percent previously estimated. The new estimate reflected higher costs for medical services. The trade gap last quarter was $606.2 billion at an annual pace, compared with $611.8 billion estimated last month. Trade subtracted 0.8 percentage point from growth, rather than the 1 percentage point estimated last month.

KB Home reported a second quarter loss as the housing market deteriorated. The net loss for the three months ended May 31 was $148.7 million, or $1.93 a share, compared with net income of $205.4 million, or $2.45, a year earlier, Los Angeles-based KB Home said today in a statement. Revenue fell 36 percent to $1.41 billion.

Capital One plans to eliminate about 2,000 jobs.

The Oil Drum: "Fatih Birol, the chief economist of the International Energy Agency effectively says that peak oil is just around the corner, and that without Iraqi oil, we'll be in deep trouble by 2015: He says "If Iraqi production does not rise exponentially by 2015, we have a very big problem, even if Saudi Arabia fulfills all its promises. The numbers are very simple, there's no need to be an expert. Within 5 to 10 years, non-OPEP production will reach a peak and begin to decline, as reserves run out. There are new proofs of that fact every day. At the same we'll see the peak of China's economic growth. The two events will coincide: the explosion of Chinese growth, and the fall in non-OPEP oil production. Will the oil world manage to face that twin shock is an open question. Unfortunately, there's a lot of talk, but very little action. I really hope that consuming nations will understand the gravity of the situation and put in place radical and extremely tough policies to curb oil demand growth. I understand the Saudi government claims 230 billion barrels of reserves, and I have no official reason not to believe these numbers. Nevertheless, Saudi Arabia - as well as other producing countries and oil companies - should be more transparent in their numbers. Oil is a crucial good for all of us and we have the right to know how much oil, as per international standards, is left."

Oil workers in six states for state-run oil firm Petrobras have voted to go on strike in July, Brazil's main Oil Workers' Federation said.

An Iraqi government adviser has said that the cost of increasing Iraq's oil production to 6 million barrels a day is estimated at $75 billion. Good luck.
The current production of Iraq's devastated oil sector stands at around two million barrels a day.

Worthington Industries plans to close facilities and cut jobs in fiscal 2008 in an effort to cut costs by an estimated $35 million to $40 million.

General Motors Corp. on Thursday said it reached a deal to sell its Allison Transmission unit for $5.6 billion to private-equity firms Carlyle Group and Onex Corp.

The number of help-wanted ads in major U.S. newspapers fell to a 49-year low in May, the Conference Board reported Thursday. The help-wanted index fell to 27 from 29. It's the lowest since August 1958. The index was at 33 a year ago. "The labor market is slow and might even slow a little further this summer," said Ken Goldstein, an economist for the Conference Board.

President Bush, moving toward a constitutional showdown with Congress, asserted executive privilege Thursday and rejected lawmakers' demands for documents that could shed light on the firings of federal prosecutors.

China Petrochemical Corp., the nation's second-largest oil producer, is in talks to drill in Venezuela, where ConocoPhillips and Exxon Mobil Corp. pulled out after President Hugo Chavez seized their assets.
The company is seeking ``heavy oil'' projects, said Tong Peixin, a spokesman for unit Sinopec International Petroleum Exploration & Production Corp., a reference to tarry deposits in an Orinoco River basin area known as the Faja and to fields lying off the Caribbean coast that may hold 316 billion barrels. China Petrochemical is known as Sinopec Group.

"China, Japan, South Korea and India are the biggest consumers of oil in Asia with the Kingdom meeting 26 percent of India's oil requirements compared to Japan's 25 percent and China's 14 percent," Indian Consul General Dr. Ausaf Sayeed said.

Natural-gas inventories rose by 99 billion cubic feet for the week ended June 22, the Energy Department said Thursday. Total stocks now stand at 2.443 trillion cubic feet, down 90 billion cubic feet from the year-ago level, but 372 billion cubic feet above the five-year average, the government data said. August natural gas was down 13.3 cents, or 1.9%, at $6.89 per million British thermal units.

Russia's forex reserves rise to $406.6 billion.

Toronto-based Yamana Gold said it has entered into a combination agreement with Northern Orion Resources Inc. and a proposal has been made to Meridian Gold regarding a merger of the three companies. Under the proposed combination, Meridian shareholders would receive 2.235 of a Yamana share plus C$3.15 in cash, for a total consideration of C$32.25 per share. Northern Orion shareholders would receive 0.543 of a Yamana share, for a total value of C$7.07 per share. Yamana has agreed to acquire all of Northern Orion's shares, subject to the requirement that Yamana acquire at least 66.6% of Meridian's shares. Yamana added that if it can't reach an agreement with Meridian, Yamana and Northern Orion plan to launch an offer acquire 100% of the company's stock.

We now have 2 1/4 million people in our prisons and jails or 2.8% more than one year ago. That continues to place us in the number one slot as having more people incarcerated in the U.S. than any other country in the world. China is number two with 1.5 million; however, their population approaches 1.3 billion as compared with our 300 million. Prison and jail employment is on a growth curve and incarceration represents a $40+ billion industry.

The Federal Reserve on Thursday held benchmark U.S. interest rates steady at 5.25 percent for an eighth straight meeting, and the Fed's statement made clear that the bank is not certain that core inflation, which excludes food and energy prices, has fallen below the bank's 1% to 2% target range for good. The committee said the "predominant policy concern remains the risk that inflation will fail to moderate as expected."

Research In Motion reported earnings of $223.3 million, or $1.17 a share, compared to earnings of $128.8 million, or 67 cents a share, for the same period last year. Revenue jumped nearly 77% to $1.082 billion compared to $613.1 million last year. The company also announced a three-for-one stock split that will take effect on Aug. 20.

August crude closed at $69.57, up 60 cents for the session. But August natural gas dropped 6%, or 42.8 cents, to end at $6.655 per million British thermal units on ample U.S. supplies. That was the contract's lowest level since May 2005.

August gold climbed $5.60 to close at $650.40 an ounce Thursday. July silver climbed 1.4% to close at $12.379 an ounce and July copper finished at $3.4295 a pound, up 2.2%.

The Economy

6/28/07 The Economy

The American Petroleum Institute reported a decline of 5.3 million barrels in motor gasoline supplies for the week ended June 22. The Energy Department had reported a fall of 700,000 barrels for the latest week. Distillate supplies were down 1.7 million barrels, the API said. The government reported that supplies were down 2.3 million barrels. Crude supplies climbed 2.4 million barrels, the API said. The government posted a 1.6 million-barrel rise.

Orders for all durable goods fell 2.8% in May, led by a hefty 22.7% drop in orders for civilian aircraft. The number was weaker than the 1.7% decline expected by economists surveyed by MarketWatch. It was the biggest drop in orders since January
Orders excluding transportation fell 1%, also the largest decline since January. Orders for U.S.-made investment goods dropped 3% in May, ending a brief rebound in businesses' capital spending, the Commerce Department reported Wednesday.

Guitar Center Inc.agreed to be acquired by affiliates of Bain Capital Partners LLC, a private investment company, for about $2.1 billion. The Westlake Village, Calif., guitar retailer said terms of the agreement call for stockholders to receive $63 in cash for each share of Guitar Center owned.

The dollar continued to lose ground against the yen Wednesday, falling to 122.32 yen after reports that orders for durable goods were weaker-than-expected.

The European Central Bank is planning more rate hikes but is undecided on timing or how many, Market News International reported, citing sources in the Eurosystem.

China's highest legislature Wednesday began discussing a proposal to issue 1.55 trillion yuan in bonds to purchase about $200 billion in U.S.-denominated foreign exchange to fund the launch of a state investment fund, the state-run Xinhua News Agency reported Wednesday.

Oil services firm John Wood Group (UK:WG) said its board is increasingly confident of "strong" growth for the year, as it's benefiting from the ongoing increase in oil and gas spending, particularly in international markets outside North America, and from improving power markets around the world. Analysts polled by Thomson Financial forecast a 30% rise in earnings per share growth.

Profits at Chinese industrial firms rose 42.1% when measured on a combined basis in January to May period, when compared against the year-earlier period, the National Bureau of Statistics said Wednesday.

China's highest legislature began deliberations Wednesday over a draft bill that would authorize the State Council to reduce or cancel a tax on interest income, according to report by the state-run Xinhua News Agency Wednesday.

In a $2.6 billion deal, CommScope to buy Andrew Corp.

The Senate Judiciary Committee subpoenaed the White House and Vice President Dick Cheney's office Wednesday for documents relating to President Bush's warrant-free eavesdropping program. Also named in subpoenas signed by committee Chairman Patrick Leahy, D-Vt., were the Justice Department and the National Security Council.

Airbus has secured orders for 86 aircraft from five Chinese carriers, the first committed orders of a provisional agreement to purchase 150 aircraft that was made in October, according to reports citing an Airbus-China official.

China could see its annual imports reach $1 trillion by 2010, a senior government official said.

Japan's industrial output contracted in May, marking the third straight month of declines, according to government data released Thursday. Industrial output declined 0.4% on a seasonally-adjusted basis from a month earlier, the Ministry of Economy, Trade and Industry said.

One of the hedge fund industry's biggest stars, Eric Mindich, the chief executive of Eton Park Capital Management, said that he believes the credit cycle will turn and that margins are too narrow. He said the "day of reckoning" may be here, in reference to recent problems in the securitized debt markets.

August crude climbed $1.20 to close at $68.97 a barrel Wednesday. July heating oil finished at an almost one-week high of $2.0246 a gallon, up 1.6% for the session. July natural gas closed at $6.929 per million British thermal units, up 5.2 cents. August natural gas, which is now the front-month contract, climbed 8.1 cents to end at $7.083.

August gold fell 50 cents to close at $644.80 an ounce Wednesday. July silver fell 7 cents to reach a fresh eight-month closing low of $12.21 an ounce.

Semiconductor equipment maker Novellus Systems Inc. said Thursday its second-quarter results would come in at the low end of its prior forecast, hurt by a weaker semiconductor market.

Tuesday, June 26, 2007

Housing Clouds

6/27/07 Housing

Cigarette and tobacco product maker Altria Group Inc. said Tuesday it will close a North Carolina manufacturing plant that employs 2,500 as it moves cigarette production for non-U.S. markets to Europe.

Homebuilder Lennar Corp. said Tuesday it swung to a second-quarter loss as the housing downturn continues, and warned it would likely post a loss in the third quarter as well. The company said results were hurt by a charge of $1.33 per share related to valuation adjustments and write-offs of option deposits and pre-acquisition costs. Ex that charge, the loss was 22 cents a share. "The housing market has continued to deteriorate throughout the second quarter. The supply of new and existing homes has continued to increase resulting in declining home prices across our markets," President and Chief Executive Stuart Miller said in a statement. Lennar said new home deliveries, excluding unconsolidated entities, fell to 8,940 homes from 12,506 homes in the year-ago period. The average sales price of homes delivered slipped to $298,000 from $322,000 due to higher sales incentives offered to buyers. Rather than listen to forecasts from the NAHB, I think it wise to pay attention to Mr. Miller's assessment of the housing outlook.

Brett Steenbarger: "I notice we've made six consecutive lower lows in the S&P 500 Index (SPY). That has only occurred on five other occasions since 2004. Five days later, the market was higher four of those five occasions, with three of the gains exceeding 1% and the one loss under half a percent.
If we loosen the criteria and examine all periods in which we've had 5 out of 6 days making lower price lows (N = 61), we find a similar bullish edge five days out. Specifically, SPY averaged a gain of .59% (44 up, 17 down).
I took the pattern all the way back to 2000, identifying all occasions when five out of six days in SPY made lower price lows (N = 165). Once again, we see a bullish edge five days out, with SPY averaging a gain of .84% (100 up, 65 down). By contrast, the rest of the occasions in the sample averaged a five day loss of -.03% (891 up, 814 down)."

GOP Sen. Richard Lugar says Bush's strategy isn't working and that it's time to downsize forces.

Target guided June same-store sales to lower end of a 3-5% range.

Kroger announced a $1 billion stock buy back.

Home prices in 10 major U.S. cities have fallen at the fastest pace in 16 years, according to Standard & Poor's Case-Shiller home price index released Tuesday. Home prices in 10 major cities fell 2.7% year-over-year, while prices in 20 cities dropped 2.1%. Fourteen of the 20 cities show falling prices in the past year, led by Detroit (down 9.3%), San Diego (down 6.7%) and Washington (down 5%). Seattle had the largest price gains over the past year at 9.6%.

Citing sinking boat sales, West Marine Inc.lowered its 2007 earnings forecast to 24-34 cents a share, compared to the Thomson Financial forecast of 38 cents a share. Earlier, the company had expected 2007 earnings of 45 cents to 55 cents a share.

Holland's Basell, a unit of Access Industries, agreed to buy Huntsman Corp), a maker of differentiated chemicals and pigments, for $9.6 billion including assumed debt, or $25.25 a share.

Pimco's Bill Gross said the sub-prime loan issue is not an isolated event.

After a gang buster opening day for the Blackstone IPO, the shares traded below the $31 offering price on Tuesday.

New single-family home sales fell to an annual rate of 915,000 from a revised rate of 930,000 in April, the Commerce Department said. In May, the median sales price of a new home rose 1.5 percent to $236,100 from $232,700 in April. Last month, new homes prices took a record tumble while sales rose strongly. There were 536,000 new homes for sale in May, a fall from the 542,000 reported in April. It would take 7.1 months to clear that inventory at the current sales pace, more than the 7.0 months recorded in April.

The Conference Board said its index of consumer sentiment slid to 103.9 in June, the lowest since August 2006, from an upwardly revised 108.5 in May. The present situation index fell to 127.9 in June -- its lowest level since November 2006. It stood at 136.1 in May. The expectations index slipped to 87.9 from an upwardly revised 90.1 a month ago. Optimism about labor market conditions waned in June, the report showed. Consumers surveyed who said jobs were "plentiful" fell to 27.0 percent from an upwardly revised 29.1 percent the prior month. Those who said jobs were "hard to get" edged up to 21.1 percent from a downwardly revised 19.7 percent in May. Consumers' expectations for the inflation rate 12 months from now held at 5.4 percent in June, steady with May's downwardly revised reading, but above 5.1 percent a year ago.

Ventana Medical Systems Inc. told its shareholders Tuesday it recommends they "take no action at this time" in response to a $3 billion hostile takeover bid from Swiss drug maker Roche Holding AG. Roche offered $75 per share cash, and Ventana's stock soared $28.65, or 55.4 percent, to $80.39 in premarket electronic trading. The stock closed Monday at $51.74. Ventana's clinical systems are used to analyze human tissue to help diagnose and treat cancer and infectious diseases.

The Oil Drum: "The projections are staggering. By 2030, we estimate that global energy consumption will grow by over 50 percent, with 70 percent of that growth coming from the world's emerging economies. For electricity specifically, we estimate that U.S. demand will increase by about 50 percent by 2030, with global demand nearly doubling. To meet this demand in the U.S., we would require 285,000 megawatts of new base load capacity. By way of comparison, that represents roughly the total capacity of all the coal-burning power plants now operating in the U.S. and almost three times the capacity of the existing fleet of nuclear plants."

"There has always been a recognized potential of the mushroom as being a choice platform for the mass production of commercially valuable proteins," said Charles Peter Romaine, who holds the John B. Swayne Chair in spawn science and professor of plant pathology at Penn State. "Mushrooms could make the ideal vehicle for the manufacture of biopharmaceuticals to treat a broad array of human illnesses. But nobody has been able to come up with a feasible way of doing that."
Dr. Romaine and his colleague, Xi Chen, then a post-doctoral scholar at Penn State and now a Syngenta Biotechnology Inc. research scientist, have developed a technique to genetically modify Agaricus bisporus -- the button variety of mushroom, which is the predominant edible species worldwide. One application of their technology is the use of transgenic mushrooms as factories for producing therapeutic proteins, such as vaccines, monoclonal antibodies, and hormones like insulin, or commercial enzymes, such as cellulase for biofuels.
"Right now medical treatment exists for about 500 diseases and genetic disorders, but thanks to the human genome project, before long, new drugs will be available for thousands of other diseases," Dr. Romaine said. "We need a new way of mass-producing protein-based drugs, which is economical, safe, and fast. We believe mushrooms are going to be the platform of the future."
To create transgenic mushrooms, researchers attached a gene that confers resistance to hygromycin, an antibiotic, to circular pieces of bacterial DNA called plasmids, which have the ability to multiply within a bacterium known as Agrobacterium.
The hygromycin resistance gene is a marker gene to help sort out the transgenic mushroom cells from the non-transgenic cells, Dr. Romaine explained. "What we are doing is taking a gene, as for example a drug gene, that is not part of the mushroom, and camouflaging it with regulatory elements from a mushroom gene. We then patch these genetic elements in the plasmid and insert it back into the bacterium," he added.
The researchers then snipped small pieces off the mushroom's gill tissue and added it to a flask containing the altered bacterium.
Over the course of several days, as the bacterium goes through its lifecycle, it transfers a portion of its plasmid out of its cell right into the mushroom cell, and integrates the introduced gene into the chromosome of the mushroom.
Next, the researchers exposed the mushroom cells to hygromycin. The antibiotic kills all the normal cells, separating out those that have been genetically altered for resistance.

I question the speed for searching the internet on the iPhone.

For risk takers you might consider Bear Stearns. The stock is at $140 and the Jan 08 $80 puts are going for 85 cents. I like that type of risk.

August crude fell $1.41 to close at $67.77 a barrel Tuesday. Natural gas declined 5 cents to $6.89.

August gold fell $9.40 to close at $645.30 an ounce Tuesday, its lowest level since mid-January, while July silver dropped 4.6%, or 59.7 cents, to end at $12.28 an ounce -- its weakest level since late October. July copper fell 8.35 cents, or 2.5%, to close at $3.3135 a pound.

Brad Setser: "The Budget Committee's hearing is structured around the question of whether large foreign holdings of US debt put the US economy at risk? My answer is pretty simple: the United States' ongoing need for a large increase in foreigners' willingness to hold US assets in order to fund large ongoing deficits remains a potential economic vulnerability. I try to lay out two different risks. One is that foreign investors fail to provide the US with enough financing, forcing too rapid adjustment. The other is that foreign investors provide the US with so much financing -- at least in the short-term -- that they prevent a necessary adjustment from happening, allowing the underlying disequilibrium to build."

Dow Jones and News Corp have reached an agreement on editorial board independence at the Wall Street Journal.

Exxon Mobil Corp. and ConocoPhillips refused to sign deals by a deadline Tuesday that would enable them to keep pumping oil under tougher terms in Venezuela, the nation's oil minister said. But the government signed deals with four other major oil companies involved in oil ventures in the Orinoco River region -- U.S.-based Chevron Corp.; Britain's BP PLC, France's Total SA and Norway's Statoil ASA.

Moody's Investors Service and Standard & Poor's were duped by the make-up and ``six-inch hooker heels'' of collateralized debt obligations they gave investment-grade ratings, and investors now stand to lose all their money, according to Bill Gross, manager of the world's biggest bond fund.

For Marsoft's dry bulk rate market highlights see the following link:
http://marsoft.com/highlight.htm

Japan's finance minister cautioned about the weakness of the country's currency. Koji Omi said at a news conference that it was important to be aware of the risks of making one-way currency bets, echoing warnings from Group of Seven warnings.Foreign exchange officials from South Korea and New Zealand also said they were worried about the harm caused by the yen's weakness, compounding concerns about carry trades, in which funds are borrowed in a low-yielding currency such as the yen to invest in higher-yielding currencies.

Monday, June 25, 2007

Facts And Opinions

6/26/07 Facts And Opinions

According to analysts at Goldman Sachs, "Despite the increasing supplies of motor gasoline from higher refinery yields and increased imports, refinery runs have continued to display a strong counter-seasonal decline of a type more normally associated with an external event such as a hurricane. It is increasingly evident that the host of problems that have afflicted a wide variety of refineries in the United States during the last turnaround season are in part attributable to the stress that new more stringent product specifications have put on the refining system in the past year. While we continue to expect that U.S. refineries will recover from these recent outages, leading to a recovery in U.S. refinery runs, we believe that the continued stress on the U.S. refining system from the adjustment to the more stringent product specifications could lead to further refinery outages, posing a downward risk to U.S. refinery runs."

On Sunday, 88 foreclosed properties, mostly in Alameda, Contra Costa and Solano counties, were auctioned at the San Mateo County Event Center. It was the first large-scale foreclosure auction in the region in a decade. More than 2,300 people flocked to the auction, hoping for discounts on homes being sold by banks that had foreclosed on them. On Saturday, 107 properties went on the block in Sacramento, and 47 properties will be auctioned in Modesto on Monday.

The average price of gasoline across the country dropped about 11 cents over the last two weeks, according to a national survey released Sunday. Regular gasoline, which peaked at $3.18 in May, dropped to $3 a gallon, oil industry analyst Trilby Lundberg said. Mid-grade averaged $3.11, and premium was $3.22.

China's stocks plunged by the most in three weeks after central bank Governor Zhou Xiaochuan said shares may be overvalued and he doesn't rule out raising interest rates.

The unexpected surge in US government tax receipts may pare the budget deficit by 39% to $150 billion this fiscal year, causing a relative scarcity of four-week, three-month and six-month treasury bills.

The Bank for International Settlements is warning that years of loose monetary policy have fueled a dangerous credit bubble, leaving the global economy more vulnerable to another 1930s-style slump is than generally understood, the U.K.'s Telegraph newspaper reported on its website. Virtually nobody foresaw the Great Depression of the 1930s, or the crises which affected Japan and Southeast Asia in the early and late 1990s.

John Hussman: "Based on prevailing market conditions, the market appears decidedly vulnerable. Virtually any weakness at all in the coming sessions will suggest a measurable shift in the willingness of investors to speculate, at which point conditions would fall into the most hostile Market Climate we identify."

The Oil Drum: "Iran will exhaust its annual budget for petrol imports by August 1, more than seven months before the financial year ends, if fuel consumption continues at the same pace, officials said in remarks published yesterday...The peak body representing Australia's energy users says a gas shortage which is affecting large commercial users in the New South Wales Hunter Valley is just the symptom of a growing energy crisis across the country...Panama: Cold water on refinery plan:The EFE news agency reports that one of the oil refineries under discussion is now in doubt because the Mexican government has told the Panamanian ambassador in Mexico that the state-owned PEMEX oil company would have less oil to send for refining at the contemplated facility than had been previously predicted."

Lake Superior, the world's largest freshwater lake, has dropped to its lowest level in 81 years. The water is 20 inches below average and a foot lower than just a year ago.

Sales of previously owned homes in the U.S. fell in May to the lowest in almost four years, reinforcing concerns about a protracted housing slump. Purchases last month declined 0.3 percent to an annual rate of 5.99 million, the lowest since June 2003, from a revised 6.01 million in April, the National Association of Realtors said today in Washington. The supply of unsold homes jumped to the highest in almost 15 years. The supply of homes for sale increased 5 percent to 4.43 million. At the current sales pace, that represented 8.9 months' worth, the highest since June 1992 and up from 8.4 months' worth at the end of the prior month. The median price of an existing home fell 2.1 percent last month from a year ago to $223,700, the 10th consecutive month of year-over-year declines, the Realtors group said. Resales of single-family homes fell 0.8 percent to an annual rate of 5.2 million. Sales of condos and co-ops rose 2.6 percent to a 790,000 rate. Purchases fell 3.4 percent in the South and 0.8 percent in the West. They rose 5.8 percent in the Northeast and 0.7 percent in the Midwest.

Axel Merk: "It may well be that the value obtained in a fire sale is less than that obtained in an orderly liquidation. But the lesson to take home from this is that CDOs must not be used as collateral for 10:1 leverage. In our assessment, the unreasonable leveraged employed by many hedge funds have contributed to a global liquidity glut that has driven up all asset classes, from stocks to bonds to commodities and other hard assets. As lenders have ignored risk, volatility reached abnormally low levels in 2006. Markets need risk to properly price assets; it is urgently necessary that volatility come back into the markets, so that lenders make more reasonable decisions. The Bear Sterns debacle highlights that the industry has gone too far, and that it is high time that credit be reigned in. So far, the first good that has come out of all this is that the planned initial public offering (IPO) of Everquest Financial seems to have been aborted: Bear Sterns was the underwriter in Everquest, a firm that specializes in buying CDOs from hedge funds. Another hope is that traditionally more conservative investors, such as pension funds, will reduce their exposure to overly leveraged hedge funds. If such investors are told that they should not "rock the boat" with a rushed decision, they may be well served to take their losses now rather than potentially even greater losses later."

Israeli investment in India has touched 1 billion dollar mark in the last four years and it was likely to grow further, Israeli Ambassador in India David Danieli said. "Israeli investment in India has grown to one billion dollars. Four years back it was almost nil," Danieli who was on a visit to Kolkata said.

After trading sharply lower in the early morning trading, crude, heating oil, and gasoline reversed to the upside. Only natural gas had difficulty gaining traction above the $7 level. By comparison, the Dow traded up at the opening and at one point was ahead 128 points only to go negative with 1 1/2 hours left in the trading session.

August gold fell $2.30 to close at $654.70 an ounce Monday. July silver fell 14.3 cents to close at $12.877 an ounce, while July copper climbed 1.5 cents to end at $3.397 a pound.

Cosan Ltd., the largest grower and processor of sugarcane in the world, filed Monday to raise up to $2 billion in a U.S. initial public offering with underwriters Credit Suisse, Morgan Stanley and Goldman Sachs. The Sao Paolo, Brazil producer of ethanol plans to trade on the New York Stock Exchange under the symbol CZZ. Cosan ranks as the largest producer of ethanol in Brazil and the second largest in the world.

President Hugo Chavez said some foreign major oil companeis may reject Venezuela's demand for majority control of their heavy oil projects in the Orinoco river basin, and those firms would have to leave the country, according to Dow Jones Newswires.

Bear Stearns Cos. may have to salvage the second of its two teetering hedge funds after offering $3.2 billion last week to bail out the first one, Merrill Lynch & Co. analyst Guy Moszkowski said.

August crude climbed 4 cents to close at $69.18 a barrel, marking a full recovery from the $67.55 level seen earlier in the session. Heating oil closed 44 cents higher and gasoline rose $1.33. Natural gas declined 19 cents to $6.94.

The U.S. Food and Drug Administration (FDA) has scheduled an End-of-Phase 2 meeting to discuss clinical study results with bremelanotide for the treatment of erectile dysfunction (ED). Palatin Technologies submitted a meeting request to FDA in May 2007; FDA has scheduled the meeting for August 2007. "We look forward to discussing our Phase 2 results and plans for Phase 3 at the upcoming meeting with FDA and moving to Phase 3 trials as soon as possible," said Carl Spana, Ph.D., President and Chief Executive Officer of Palatin Technologies. The purpose of the End-of-Phase 2 meeting is to determine the safety of proceeding to Phase 3, to evaluate the Phase 3 plan and protocols and the adequacy of current studies, and to identify any additional information necessary to support a marketing application. Palatin previously announced positive results of the Phase 2b clinical trials evaluating ED in 726 non-diabetic and 294 diabetic patients at the American Urological Association Annual Meeting and at the 9th European Society for Sexual Medicine Congress. The Phase 2b clinical trials were double blind, placebo-controlled, parallel doses trials that included a 1 month run-in period and a 3 month treatment period. The results showed that up to 50% of ED patients were restored to a normal level of function.

Exxon Mobil Corp. and Lyondell Chemical Co. were forced to shut down some gasoline making equipment at refineries in Texas over the weekend.

Sunday, June 24, 2007

Three Omens

6/25/07 Three Omens

Robert McHugh: "The Dow Industrials fall 154 points mid-day Friday, June 22nd, the day after we got a confirmed Hindenburg Omen signal on Thursday, June 21st...The Dow Industrials fell sharply again, down 185.58 points to close at 13,360.26 Friday. Volume was huge on the decline in all major averages, which is not good. NYSE volume was 134 percent of its 10 day average, with downside volume leading at 78 percent, with declining issues at 74 percent, with S&P 500 downside points leading at a near panic 89 percent. NYSE New 52 week Highs came in at 88, with New Lows at 73, and for all intents and purposes, we got a third Hindenburg Omen Friday...Our first Hindenburg Omen observation occurred on June 13th, 2007. Confirming signals occurred for all intents and purposes on June 21st, and June 22nd, giving us a three observation cluster...So what is a Hindenburg Omen? It is the alignment of several technical factors that measure the underlying condition of the stock market -- specifically the NYSE -- such that the probability that a stock market crash occurs is higher than normal, and the probability of a severe decline is quite high. This Omen has appeared before all of the stock market crashes, or panic events, of the past 22 years. All of them. No panic sell-off occurred over the past 22 years without the presence of a Hindenburg Omen. Another way of looking at it is, without a confirmed Hindenburg Omen, we are pretty safe. " It occurs when both new highs and new lows are large..."Oftentimes equities will rally after a Hindenburg Omen occurs, faking folks out, then the plunge comes on the other side of the hilltop. 1987 is a perfect example of that, as was 2006. So far as June 22nd, 2007, here are the details of the three Hindenburg Omen observations:
June 13th, 2007: There were 3,428 NYSE issues traded, with 96 New Highs and 95 New Lows, the common number equal to 2.77 percent of total issues traded, above the minimum requirement of 2.20 percent. The McClellan Oscillator was negative -116.92. The NYSE 10 week moving average was rising.
June 21st, 2007: There were 3,434 NYSE issues traded, with 106 New Highs and 75 New Lows, the lesser number equal to 2.18 percent of total issues traded, essentially 2.20 percent. The McClellan Oscillator was negative -36.65. The NYSE 10 week moving average was rising.
June 22nd, 2007: There were 3,422 NYSE issues traded, with 88 New Highs and 73 New Lows, the lesser number equal to 2.13 percent of total issues traded, essentially 2.20 percent. The McClellan Oscillator was negative -116.59. The NYSE 10 week moving average was rising...A confirmed Hindenburg Omen is not a guarantee of a stock market crash. The odds of a crash after getting a confirmed Hindenburg Omen, based upon the history since 1985, is 25.0 percent. That means the odds we will not have a crash are quite high, at 75.0 percent. It simply means there is a far greater than normal risk of a significant decline occurring within four months of the signal."

The deaths of 10 U.S. troops Saturday in Iraq, seven in roadside bomb attacks, brought to 30 the week's toll for American military personnel.

Gary Pruitt, the chief executive of newspaper publisher McClatchy Co., told an investor conference Wednesday that the company would consider selling its 15 percent stake in CareerBuilder, a help-wanted advertising joint venture that it co-owns with Gannett Co. and Tribune Co. Last August McClatchy reduced is one-third stake in CareerBuilder to 15 percent in exchange for $310 million in cash, while Gannett and Tribune each increased their stakes to 42.5 percent.
In the last 2 1/2 years, McClatchy shares have declined from $75 to $25. A falling knife is not for the faint of heart; however, it might be worth a long look.

China imported record-high volumes of fuel oil from Venezuela last month and will buy even more for June, as price-sensitive buyers seek cheaper and more direct supplies amid soaring East Asian prices. Volumes for May were around 612,000 tons, official data showed on Friday. Imports from Venezuela for June were expected at 900,000-1 million tons, versus last year's monthly average of about 260,000 tons, shipping fixtures showed. The spike in Venezuelan imports for the two months came at the expense of Singapore, which had seen May exports into China falling to about 330,000 tons, well below this year's monthly average of 428,000 tons. Imports from other traditional sources such as Russia, South Korea, Japan and Iran remained steady.

India, which imports 73 per cent of its oil needs, has seen its import bill for oil jump to $48 billion.

Trade unions in Nigeria have ended the general strike they called to protest a government-imposed increase in gasoline prices, according to media reports. Talks between the unions and the government of President Umaru Yar'Adua yielded a pledge that prices at the pump would not be increased any further for a year and that a proposed hike in the value-added tax rate won't be implemented. In return, the union agreed to accept the government's plan to increase pump prices by nearly 8%.

A simple sugar found in fruit and a variety of other sources could be converted to fuel for cars and trucks. University of Wisconsin-Madison researchers said last week they have found a better way of converting fructose, a common sugar, into a fuel called 2,5-dimethylfuran, or DMF. The biofuel has a higher energy content than ethanol, the only renewable liquid fuel currently produced on a large scale. It also doesn't absorb water from the atmosphere, a shortcoming of ethanol, said James Dumesic, one of the researchers and a professor of chemical and biological engineering at the university.

Gulf states will defer the introduction of a single currency until after a common market is created in 2010, U.A.E. central bank governor Sultan Bin Nasser al-Suwaidi said.

Gazprom and Eni signed a memorandum of understanding to cooperate on building a pipeline that could carry gas from Russia into Europe through the Black Sea.

Brett Steenbarger: "Having had the privilege of interacting with many independent traders, prop traders, and traders at funds, I've come to the conclusion that most of them are overleveraged. In the pressure to generate profits, they trade size that is too large relative to the losses they or their firms are willing or able to sustain. One result is undue performance pressure on the trader, but another is the inability to take heat. Raising leverage leads to a shortening of time frame in an effort to contain drawdowns. This, in turn, leads to an inability to ride winning trade ideas."

Mike Burk: "Over the years the NY ADL has been best at identifying market tops and it has been weakening lately as prices have been making new highs...Declines in NY ADL MoM have preceded price declines and currently we are looking at a pretty severe example...Short term the market is in a downtrend that should end in the next few days as end of month seasonality kicks in. I expect the major indices to be higher on Friday June 29 than they were on Friday June 22."

Between 2004 and 2007, African oil production climbed from seven million barrels per day (bpd) to 9.5 million bpd. And Africa is now the top production area for the French oil giant and world's number four Total.

Washington Post: "Across the board, the vice president's office goes to unusual lengths to avoid transparency. Cheney declines to disclose the names or even the size of his staff, generally releases no public calendar and ordered the Secret Service to destroy his visitor logs. His general counsel has asserted that "the vice presidency is a unique office that is neither a part of the executive branch nor a part of the legislative branch," and is therefore exempt from rules governing either. Cheney is refusing to observe an executive order on the handling of national security secrets, and he proposed to abolish a federal office that insisted on auditing his compliance."

Norddeutsche Affinerie AG, Europe's largest copper refiner, agreed to buy Cumerio NV, owner of the biggest copper smelter in southeastern Europe, for 777 million euros ($1.05 billion) in cash, as it seeks to double production in three years and take advantage of rising copper prices. Norddeutsche will offer 30 euros for each Cumerio share, 20 percent above Cumerio's closing stock price on June 22, Hamburg- based Norddeutsche said in a statement today.

The amount of capital that European and US companies are willing to spend on factories and equipment, the traditional engine of profit and economic growth, is set to plunge this year, according to business analysis. Capital expenditure as a percentage of profit before tax in Europe will fall from 64 per cent in 2006 to 55 per cent this year, according to a consensus forecast compiled by Thomson Financial, the data provider. In the US, the decline in the ratio is worse: spending is expected to fall from 51 per cent last year to 45 per cent in 2007.