China, the biggest supplier of rare earths, may almost double exports this year and meet quotas set by the government as lower prices stimulate demand.
Chinese exports were 49 percent of the government-alloted quota in the first 11 months of last year because the slowing global economy sapped demand, the Ministry of Commerce said in a Dec. 27statement. Overseas sales quotas may be virtually unchanged this year at 31,130 metric tons, based on Bloomberg calculations.
“Export quotas may be met this year as overseas demand recovers,” Wang Caifeng, a former official overseeing the rare- earth industry with the Ministry of Industry and Information Technology, said in an interview in Beijing. “High prices last year had deterred purchases and led to inventories’ depletion. Smuggling also hampered exports through illegal channels.”
Rare-earths prices have tumbled since the third quarter as consumers, including makers of electric cars and wind turbines, reduced use. The average price of lanthanum oxide, a rare earth used in rechargeable batteries and refining catalysts, was 129,167 yuan ($20,500) a ton in the fourth quarter, 15 percent less than in the third quarter, according to data from Shanghai Steelhome Information.
Rare-Earth Shares Fall
Molycorp Inc. (MCP), the owner of the largest rare-earth deposit outside of China, fell 3.1 percent to close at $25.99 in New York. Lynas Corp., developer of the world’s largest rare-earths refinery, fell 4.7 percent to A$1.23 in Sydney.
China produces at least 90 percent of the world’s rare earths, used in Boeing Co. (BA)helicopter blades and Toyota Motor Corp. (7203) hybrid cars. The nation has curbed output and exports of rare earths since 2009, when quotas were set at 50,145 tons, to conserve mining resources and protect the environment.
Cutting exports boosted prices and sparked concern among overseas users about access to supplies. China halted some mines last year to curb overcapacity, cut illegal mining and improve environmental standards.
The Chinese government allocated 10,546 tons of first-round export quotas to nine companies, including China Minmetals Corp. and Sinosteel Corp (SINOSZ)., that met the government’s environmental protection standards, the ministry said.
Export Licenses
http://www.bloomberg.com/news/2012-02-26/china-may-double-rare-earth-exports-as-overseas-demand-rebounds-on-price.html
By STEPHEN L. BERNARD And KATY BURNE
Greece became the first euro-zone member officially to be rated in default, 13 years after the single European currency was adopted to strengthen the European Union.
Standard & Poor's cut Greece's long-term credit rating to selective default from double-C. The move was expected, as S&P said this month that it would consider Greece in default if it added "collective-action" clauses to its sovereign debt, effectively forcing all bondholders to accept a bond-swap offering. Greece's Parliament approved that measure last week.
A panel will decide whether S&P's move triggers credit-default-swap payouts. Above, demonstrators in front of the Greek Parliament last week.
Moody's Investors Service and Fitch Ratings also are likely to place Greece in default. The ratings companies deem an issuer in default any time it fails to pay back creditors in full and on time.
The bigger question remains whether the action triggers payments on credit-default-swap contracts, a form of insurance against a bond default or restructuring.
The net payments that would change hands between buyers and sellers of credit-default swaps on Greece wouldn't total more than an estimated $3.2 billion, according to the Depository Trust & Clearing Corp.
A committee convened by the organization that oversees those contracts, the International Swaps and Derivatives Association, has been asked by an unidentified entity to decide whether Greece's restructuring should trigger the payouts.
Greece hasn't failed to make any interest payments to bondholders, and the official restructuring of the country's debt isn't complete.
The committee is being asked to consider whether Greek legislation to retrofit its debt with collective-action clauses, potentially forcing losses on private investors, should trigger credit-default-swap payouts because the decision won't include the European Central Bank and the new Greek bonds it received in an exchange, protecting the ECB from losses.
http://online.wsj.com/article/SB10001424052970203833004577249831718108646.html
S&P Declares Greece in Default
By STEPHEN L. BERNARD And KATY BURNE
Greece became the first euro-zone member officially to be rated in default, 13 years after the single European currency was adopted to strengthen the European Union.
Standard & Poor's cut Greece's long-term credit rating to selective default from double-C. The move was expected, as S&P said this month that it would consider Greece in default if it added "collective-action" clauses to its sovereign debt, effectively forcing all bondholders to accept a bond-swap offering. Greece's Parliament approved that measure last week.
A panel will decide whether S&P's move triggers credit-default-swap payouts. Above, demonstrators in front of the Greek Parliament last week.
Moody's Investors Service and Fitch Ratings also are likely to place Greece in default. The ratings companies deem an issuer in default any time it fails to pay back creditors in full and on time.
The bigger question remains whether the action triggers payments on credit-default-swap contracts, a form of insurance against a bond default or restructuring.
The net payments that would change hands between buyers and sellers of credit-default swaps on Greece wouldn't total more than an estimated $3.2 billion, according to the Depository Trust & Clearing Corp.
A committee convened by the organization that oversees those contracts, the International Swaps and Derivatives Association, has been asked by an unidentified entity to decide whether Greece's restructuring should trigger the payouts.
Greece hasn't failed to make any interest payments to bondholders, and the official restructuring of the country's debt isn't complete.
The committee is being asked to consider whether Greek legislation to retrofit its debt with collective-action clauses, potentially forcing losses on private investors, should trigger credit-default-swap payouts because the decision won't include the European Central Bank and the new Greek bonds it received in an exchange, protecting the ECB from losses.
http://online.wsj.com/article/SB10001424052970203833004577249831718108646.html
14 comments:
This quote has nothing to do with QB's post, but we can see the relevance in the quote:
'Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities' Voltaire
How about Oscar Wilde's--"the old believe everything, the middle-aged suspect everything, the young know everything."
With that I give you Wells Capital saying bonds will have a lousy year. Now why is it that I SUSPECT that all this 'rally' cry is to get is INTO markets while the bigwigs run out before a huge FALL? Hmmm.....I must be MIDDLE-AGED?!!
I know the 'surprise' of the morning was the drop in durable goods. Gee, you mean people have no money to pay more? invest more? Well, golly gee wiz that's NEWS!
Everywhere I go I see people 'thinking'. Putting stuff back on shelves in grocery stores. Even going to the library yesterday was a 'consideration' for us. Do we spend the money to drive there or not? That was our 'outing' for the week other than getting groceries, gas, bank, post office, errands etc. which I do all in 1 run.
On the medical front, the doctors who repeatedly told my husband that he DIDN'T have Parkinson's must have been wrong as the meds seem to be working. His shaking is almost non-existent and his balance has improved. I'm sorry but I'm a REALIST. I'd rather know the worst so I can plan ahead and know what I'm up against. Once he comes to terms with this a bit more we will sit down and do the tough task of making a living will for both of us. While it is never fun to consider, I darn well want MY wishes respected..including my absolute refusal to be micro-chipped and certain other procedures. I've been faced with the awful challenge of having to either starve my mother or 'feed' her cancer. The power/will to survive is strong in most people..which is why I advise everyone to make a will, a living will, and a durable power of attorney while they are in a calm state of mind so they can view such things without all the emotion. You can always change/amend such matters while talking but once that is taken it is a blessing for those left behind to have YOUR wishes in black and white so they may be respected.
Thus ends another of my long-winded speeches ;-)
What beside rare earths and gold can be considered an investment?
This morning (as a woman who is interested in EVERYTHING) we watched a program on violins. Did you know that 'elite' (ie Stradivari) violins and their ilk are no being 'collected' by even the big bankers and are being held as 'worth'? Interesting, yes?
The WORLD is interesting. Last night I learned about a type of RIVER dolphin that lives in the Amazon. Who knew? And their heads are different allowing them 2 types of sonar abilities needed for their survival in thick vegetation.
Don't become so concentrated on finances that you miss the wonders in this world. On the whole, humans know very little...they just think they know it all
Okay, I'll shut up now ;-)
cl - Thank you for your thoughtful comments, as always. You are so well grounded in reality it is refreshing to read.
Shaza - I would call the present Greek default not being called an actual default an absurdity, and a financial atrocity. Not what Voltaire meant, I suppose, he was talking about tyrants and propagandists, but still applicable.
If that is NOT a default, then what is, I have to ask?
On the durable goods figure, it has a lot to do with the expiry of a US tax credit on Dec 31 (I think) for their purchase, so it could be assumed that the stat would drop in January.
Not much to do with the wider economy being good or bad, I think.
A tax credit is just another form of Government intervention in the market, which pulls demand forward from the future to now to get the tax credit - does it encourage those who were sitting on the fence to buy - maybe, for a few. But does it increase overall economic activity, probably not, and will likely ensure that the first part of '12 is sloooow for new orders for the 'durable goods' producers, so I doubt anything much was gained, a few saved some tax.
If you are investing in a new plant or equipment, the primary consideration should be whether you can make it pay for itself by increasing output or improving quality, and having more sales or the expectation that sales will improve. A small tax credit is nice, but not the biggest factor, by far.
http://www.bloomberg.com/news/2012-02-27/wealthier-people-more-likely-than-poorer-to-lie-or-cheat-researchers-find.html
"Wealthy More Likely to Lie, Cheat: Researchers"
"Are society’s most noble actors found within society’s nobility?
That question spurred Paul Piff, a Ph.D. candidate in psychology at the University of California, Berkeley, to explore whether higher social class is linked to higher ideals, he said in a telephone interview.
The answer Piff found after conducting seven different experiments is: no. The pursuit of self-interest is a “fundamental motive among society’s elite, and the increased want associated with greater wealth and status can promote wrongdoing,” Piff and his colleagues wrote yesterday in the Proceedings of the National Academy of Sciences.
The “upper class,” as defined by the study, were more likely to break the law while driving, take candy from children, lie in negotiation, cheat to raise their odds of winning a prize and endorse unethical behavior at work, the research found...."
Entirely true, the rich did cause this crisis, after all, not the poor. So, the cure would be - eliminate the "elites", as they are nothing but a richer criminal class.
Like Warren Buffet, wealthy scumbag:
http://www.bloomberg.com/news/2012-02-27/buffett-says-banks-victimized-by-evicted-homeowners-who-emerged-as-winners.html
"Banks Victimized by Excesses of Ousted Homeowners"
"Warren Buffett, who controls the biggest shareholding of the No. 1 U.S. mortgage lender, said banks were victimized by some homeowners who refinanced their loans before getting evicted...
Blame for the housing bubble and subsequent slump should be shared among lenders and borrowers, as well as the government, bond-rating firms and the media, Buffett has said. In his letter, read by investors around the world, Buffett praised Jamie Dimon, CEO of JPMorgan Chase & Co., and Bank of America’s Brian T. Moynihan. JPMorgan, Goldman Sachs, Wells Fargo and Bank of America have all repaid U.S. bailout funds.
“The banking industry is back on its feet,” Buffett said."
Trying to whitewash the Banksters, as he owns lots of shares of them, of course.
ZH: "Ireland Mentions "R" Word, EUR Plunges"
"Just as we scripted, the temptation to migrate from the status quo in Europe was just too high for the other peripherals and Ireland just gained first/next mover advantage after Greece by daring top mention the "R" word. As Bloomberg notes:
* IRELAND TO HOLD VOTE ON EU FISCAL COMPACT, KENNY SAYS
We would imagine that Barroso and his pals are scrambling now that another 'Referendum' is on the cards (and we are checking what 'referendum' is in Portuguese) and while fascism in perpetuity has been priced into Euro, the possibility that democracy rears its ugly head has just sent the EURUSD tumbling.
As a reminder, "Irish voters have twice rejected European referendums before eventually passing them once concessions were offered, most recently in 2010 when in return for passing the Lisbon Treaty Dublin got assurances on its military neutrality and its ability to decide its own tax rates." A little birdie tells us the "concession" this time will be that Irish debt gets the same treatment as Greek...."
LOL game theory in action
http://www.ritholtz.com/blog/2012/02/case-shiller-what-housing-bottom
"Case Shiller: What Housing Bottom?"
"December 2011 Case-Shiller Home Price Indices showed that 2011 ended at new index lows.
The National Composite Index fell by 3.8% during Q4; year over year changes were down 4.0%. The 10- and 20-City Composites also fell by similar amounts, falling -3.9% and -4.0% versus December 2010, respectively."
Don't worry, the 'bottom callers' have correctly called the bottom 8 out of the last 1 times, at least.
Real bottom - about 2-3 years after prices stop falling, as there is always a flat period after, not the start of a new boom.
The US Dollar at 78.35 as I write and gold at 1784.00. Bernanke you are doing a heckuva job. Buffett comes across on TV as a nice modest guy. However, he is also one of the biggest if not the biggest holder of Wells Fargo stock. Anyone who would come to the defense of the financial terrorists like Dimon and his ilk does live on the same planet. Maybe he is the alien leader.
He has a lot of nerve blaming borrowers when he should be blaming lenders. What happened to the banks responsibility for due diligence? It's not so good when you are reading spread sheets in an ivory tower on Wall Street and loaning billions to places like Miami, Las Vegas and all over CA. Then say they did a strategic refi and defaulted? The is the kid of behavior that would make any bankster proud.
Greek default on debt is not going to look like a business that closes its doors. Should be a good deal of rioting in some of the poorer sections a few banks sacrificed at the alter (they should have some past experience in that) and the retirement age will get raised. Many of the social nets will disappear and a new bunch of liar (er politicians) will be elected. They will promise what they cannot deliver and possibly a Mussolini type dictator will rise again.
CL your grocery story hit the nail on the head since I am doing all the grocery shopping. I find myself putting stuff back that I can live without and trying to buy the "buy one get one free" specials. I don't buy brand names and go with generic.
Mammoth did you get an ad for the new US Mint silver coin? Some sort of infantryman looks like WWI for 50.00. ASEs have now surpassed 40.00 and Gold coins at the dealer are well over 1800.00. Things are heating up and I will have to fill the tank soon. There goes about 60.00.
Also finally took my 100 gift card that our multimillion dollar company bestowed upon us. So off to Target we went and bought some cheap (9.00) computer speakers with a 3.5mm jack as I am out of USB ports and laptops speakers sound is terrible. I don't like wearing headphones. We got some towel sets and bathroom rugs (we used the old ones until they were frayed) and a couple of rechargeable batteries (with charger) for my camera and that was it. We had 5.00 left over and there was an Oreo cookie special so I bought two boxes and it was 100.04 total. Now that is how to use a gift card.
Way to go on that gift card, Queen!!! I got the mint thing yesterday.Price of silver 'coinage' from the mint has risen from the $36 I paid last year to around $50. THAT is an increase. Remember I gave an uncirculated silver dollar as a graduation gift? I told them to HOLD IT and you'd make money. If they listened, they may. If not...oh well....
GAW, I think you are correct on the durable goods. That said, I get so MAD when I keep seeing GE advertising about how much they make and then I KNOW what they pay in taxes I want to scream!
The Irish may not go 'gently into that great referendum as people think ;-)
Once again the miners hardly moved and GAW Benton and GWG took a real tumble possibly on the China news. Benton was sure to have a correction after the climb it had. Did you have any trailing stops or are you in for the long haul?
Kreditanstalt I don't see Gold and Silver miners are attached as much to the POG or Silver as they used to be. Maybe I should think about getting into something else like Financials. Just kidding.
I had another look at the new silver commemorative coin and the infantry man looks more modern that WWI. It's very odd as the reverse side is crossed rifles, but they look very old almost like flintlocks and the soldier could be any war from WWII on to present. If I buy any it will probably just be on a whim and only about 5-10.
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