Tuesday, February 28, 2012

David Llewellyn-Smith has moved

David Llewellyn-Smith writes as Houses and Holes at MacroBusiness. David is the founding publisher and former editor-in-chief of The Diplomat magazine, now the Asia Pacific’s leading geo-politics website. He is a regular contributor at The Sydney Morning Herald, The Age and The Drum and is a former commentator atBusiness Spectator. He is also the co-author of The Great Crash of 2008 with Ross Garnaut. He edits MacroBusiness. A full list of his posts is available here.

Sunday, January 23, 2011

Change of address

Dear Reader,

This humble blog is merging with several others to form a new superblog called MacroBusiness. You'll find me posting with similar regularity at the new address henceforth.




Saturday, January 22, 2011

Weekend reading: China's banks

China's problem. Paul Krugman
China's inflation dilemma. Charlie Fell
China's SHIBOR bounces big. Zero Hedge
China NPL's. Michael Pettis
30% chance of Chinese hard landing. Ambrose Evans-Pritchard
Greatest bear market rally in history. Calculated Risk
The efficacy of capital controls. VOX(h/tNaked Capitalism)
The future of Fannie & Freddie. NYT
Europe's secret fiscal integration. Bloomberg
Inflation nutters. Samuel Brittan
The love of LPTs. Ian Verrender
Melbourne's whacko house price figures. The Age
Commodity speculation. PragCap
India's ore export ban. Bloomberg
BarCap corners lead. Reuters
Thermal pause, coking moonshot. Coal Portal

Friday, January 21, 2011

Guest post: Of China and guano

Following the La Niña-related floods in Queensland earlier this month food prices have spiked, adding to an already serious inflation crisis around the world and toppling the government of Tunisia.

And while protesters in Tunis were hardly thinking of Queensland bananas or sugarcane as they mobbed the streets, the changing and dramatic climatic conditions that brought about the floods (which have since moved south to Victoria) were at least partly to blame.

Weather-induced agflation is here, as analysis from the respected Worldwatch Institute and statistics from the Food and Agricultural Organisation amply demonstrate. And you don’t need to believe in global warming to be worried about it either. The current La Niña weather pattern illustrates that disruptions to global trade in agricultural commodities and impacts on crop yields and harvests will continue for months at the very least, giving all the more impetus to those steadily rising futures contracts.

It’s always difficult to predict political events from economic phenomenon (let alone economic phenomenon derived from the weather). The globalised and increasingly finanicalised market for agricultural commodities means that causal relationships happen so much faster and as we’ve seen with Tunisia, what was once a particularly stable, affluent and secure Arab state on the periphery of Europe has dissolved into anarchy. Consider too that Tunisia was never originally thought of as particularly vulnerable to food price shocks either. In investment bank Nomura’s September 2010 index of food vulnerability Tunisia came 18th – a respectable level for a largely desert country. By contrast, Morocco and Algeria came second and third, Egypt came sixth, Sudan eight and Libya sixteenth. Ominously for a country of 164 million and a history of asylum seekers, Bangladesh comes first.

As disturbing as this is, what is of particular concern to this lounge chair dandy is candidate number two: Morocco. Although the Saharan monarchy has not seen the levels of unrest felt elsewhere across the Maghreb (and elsewhere from Oman to The Sudan), it does have a track record of food price riots with 33 killed in a weekend of riots in 1990 and over 100 killed in the ‘Bread Intifada’ of 1984.

It’s a concern that hasn’t gone unnoticed by Aida Alami in the Global Post who writes that despite the unifying symbol of King Mohammed VI, Morocco has high structural unemployment and soaring inflation.

What Alami doesn’t mention however is that Morocco is the one of the world’s biggest producers of phosphate rock, or phosphorite, a mineral with no substitute in fertiliser. If unrest of a Tunisian scale were to foment in the Kingdom the risks to another key agricultural supply chain are stark.

According to the US Geological Survey's most recent data on phosphate rock, Morocco and its unhappily occupied southern neighbour, Western Sahara, lead the world in phosphate reserves, with more than the other two biggest producers – the US and China – combined. Phosphate, which was previously behind the fortunes of Christmas Island and Nauru, is also a dwindling global resource, based on a study by Professor Stuart White and Dr Dana Cordell of the University of Technology, Sydney. Based on White and Cordell’s research, we may see a global peak in phosphate rock reserves within the next three decades.

Add in a continuing insurgency through Western Sahara’s Polisario Front, the regional presence of Al Qaeda in the Maghreb, clan fighting between Arabs and the Tauareg and, more recently, the emergence of a major international drugs trafficking route in the shifting borderlands where Algeria meets Mali and you have a recipe for a food crisis that lasts well beyond La Niña’s final furies.

While this may be music to the ears of a growing investor class bullish on phosphate and potash stocks, it presents a decidedly bearish scenario for virtually everything else.

That is no truer than for China, which although a major phosphate producer in its own right, is increasingly dependent on food imports and is already getting royally squeezed by supply and demand-side inflation, no matter how much its government might force its latest CPI to heal.

And while food price inflation is so much a problem for everyone that it features its own Financial Times landing page (what else better expresses the economic Zeitgeist?) it is a particular problem for China because of how it’s sandwiched its economic model into a reliance on accommodative money supply, a weak Yuan and low priced exports.

China is sailing between the proverbial Scylla of inflation and Charybdis of GDP growth. Ahead of its 18th National Congress in 2012, where the next generation of the Chinese Communist Party will take over the Politburo, it will need to navigate the rising tide of food prices without tipping over. Braver measures will need to be taken than tightening banking reserve ratio requirements or jawboning confidence in Washington summits; a fundamental reorientation of the economic system is required.

This means less debatable infrastructure and more internal consumption. It means cooling the property bubble and finding sustainable ways to raise incomes.

Above all, it means raising the value of the yuan, which contributes to all of these outcomes without the danger of hot money flows chasing rates higher, until we all blow up.

Australia would, in turn, need to wear any costs of lower commodity exports to China in the interests of a more sustainable demand curve, but that is besides the point. If China’s rampant growth continues without heed for inflation or human needs then all the skyscrapers and shopping malls will be a moot point. The roots of the Tiananmen Square protests was in inflation, which came from Deng Xiao Ping’s economic growth of the 1980s.

According to Credit Suisse research, Chinese consumers spend twice on food what they do on housing. Despite arguments that real estate inflation could lead to revolution, it’s food that is the real worry for China’s power elite.

Flashman is a galavanting Australian poltroon working in the funds management sector.

Links January 21: Ratcheting up

China's loan cap. Caixin (h/t Naked Capitalism)
China's illusory decoupling. Asia Times
China overheating. FT, Michael Sainsbury
Ore price drivers. FT
China can beat inflation. Gavyn Davies
Ore price record. Bloomberg
Ore volume record. The Oz
Indian exports the key to rally. Reuters
Chinese sabre rattling. Washington Times
More US homes. Calculated Risk
Financialisation of cows. GMM
Ramp mining tax to pay for flood recovery. Ian MacilWraith
Levy instead. The Age
Oh dear ... Minerals Council decries vested interests. (The Oz)

Thursday, January 20, 2011

Pillars of boom

Yesterday Bloomberg published an interesting article on Rio's iron ore output:
Production climbed to 50.1 million metric tons in the three months from 47.2 million tons in the same period a year earlier, according to a statement today from London-based Rio, the second-biggest exporter of the commodity. The figure beat a UBS AG estimate of 46.1 million tons.

“Iron ore was much better than what I was expecting,” said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. in Melbourne, including Rio shares. “Given they continue to raise the bar, expectations are pretty high.”

Rio Chief Executive Officer Tom Albanese, who is studying expanding iron ore operations by a further 50 percent by 2015 at a cost of about $14.8 billion, said today that demand is growing from steel mills. Prices may rise to a record $250 a ton this year, Credit Suisse Group AG said this month.

Don't adjust your computer. You read it right. CSG are forecasting a $250 ore price this year, despite the rising supply.

We should perhaps take it with a grain of salt. Such forecasts tend to be harbingers of a top. Nonetheless, there is no disputing that the iron ore price is surging above $180 per tonne, and probably on to a record above $190. And with monthly contracts in the offing, forecasts for Australian iron ore revenue will be blown away.

To give you some idea of just how big this boom threatens to become, I've graphed above Australia's top 10 export earners since 2003/04.

There are several points to make.

First, Blind Freddy can see the boom is based largely on iron ore and coal, with gold, gas and education chipping in.

Second, the projected revenues for 2010/11 iron ore and coal revenues are drawn from ABARES. They were made in mid December (find the documents below). In the case of iron ore, they used an average contract ore price of $132 per tonne which included a likely jump in the Q1 quarterly contract price to around $155.

However, if monthly contracts are forced through then the average price will suddenly jump, as it did when annual pricing shifted to quarterly pricing. The projected ramp in iron ore revenue will go vertical.

In the case of coal, the ABARES projection obviously does not include the QLD floods. It may fall, but this blog reckons the market is currently re-pricing the weather risk attached to coal owing to the giant La Nina. The question is, will volumes fall more than the price rises? Bloomberg also reported yesterday that:
Queensland cut its forecast for coking coal output in the 12 months ended June 30 by 10.5 percent to 177.3 million metric tons after flooding inundated the state, Mines and Energy Minister Stephen Robertson said in a telephone interview today. It may take between two and three months for normal mining operations to resume, he said.

If the same 10% is applied to exports, that will be a fall of around 16 million tonnes in the year, approximately $3 billion. This blog reckons higher prices will recover that figure but not until later in the year. The figure will anyway be swamped by the broader boom.

Of course, the longer and higher this boom goes, the bigger the bust at the end of it will be. And the same monthly contracts currently threatening to send the boom parabolic will ultimately deliver the downside of that same curve.

FeO & met coal

thermal coal

Links January 20: Ore rocket

Ore approaching record high. Bloomberg
Commodities bust. Zero Hedge
Asian inflation. Reuters
China should get guarantee to buy euro. Bloomberg
China and Germany. FT
Ireland defaults. Bloomberg
China and the US, mutual interests. Martin Wolf
How to get tough with China. Naked Capitalism
China NOT selling Treasuries. Econompic
Banks want to raise again. SMH
China's holiday home. Bernard Salt

Wednesday, January 19, 2011

Links January 19: Chk Chk ... Boom

Spend big on recovery. SMH
No Qld labour shortage. The Age
Commodities rocket. The Oz
Are banks fixed? Robert Peston(h/t nakedcapitalism)
The tinkerbell market. Naked Capitalism, Zero Hedge
Germany offers truth or dare to market. Calculated Risk
Market takes dare: Greece, Ireland, Portugal, Spain, Italy, Belgium
World bank vs China. FT
China's Treasury holdings. Zero Hedge
Kashkari on US debt. Bloomberg
Currencies, controls and exports. Alphaville

Tuesday, January 18, 2011

S&P's missing $400 billion

Regular readers will recall that this year's coverage began with the unwholesome news that S&P were in the process of downgrading Australia's BICRA score - the credit rating given to the Australian financial system.

This blogger has chopped a rather important chart from the primary BICRA document (see above, full document below) in order to ask a question.

Credit junkies will note that Australia's debt to GDP ratio is graphed in the upper 120 percentage point range. To be precise, it is 127.3%.

The question is this. Why is Australia's debt to GDP so low?

Dr Steven Keen puts the ratio at 160%, which would clearly push Australia into the nasty territory currently occupied by Spain, the UK and the US.

This blogger has double checked Dr Keens' figures and they are correct. It then played around with the credit aggregates available at the RBA (D02), adding and subtracting them in various ways, leaving some credit components out and calculating against GDP. But nothing has worked to produce 127.3%.

Wondering if this was a straight error, the same was tried with New Zealand's debt to GDP figures. Again, no rearrangement of figures served to justify the quoted ratio.

So clearly S&P uses some kind of proprietary formula for calculating debt to GDP that loses more than 20% or roughly $400 billion of Australia's debt.

The above graph hints at that formula in the description "Domestic credit to the private sector". But what exactly does that mean?

Perhaps it means that international banks that extend credit in Australia are excluded. Or, perhaps it means that offshore borrowings are excluded. Or, perhaps it means that some portion of Australian credit ends up offshore.

This blogger is buggered if he knows. So it rang S&P. They haven't answered his inquiry.

Given the rather important nature of this question, perhaps someone out there can help locate the missing $400 billion.

S&P Preliminary BICRA in 23 Countries Jan 6 2011 (1)

S&P FI RfC Methodology for Determining BICRA May 13 2010 (1)

Tough choice

A slew of material out yesterday and today has bearing on the medium term outlook for interest rates. First, Reuters reported uncomfortable news on inflation:
A private gauge of Australian consumer prices showed annual inflation ran above target in December, with price pressures likely to grow as the Queensland floods push up food costs.

The TD Securities-Melbourne Institute measure of consumer price inflation rose 0.2 per cent in December, compared to November when it rose 0.4 per cent.

The index was 3.8 per cent higher than in December 2009, above Reserve Bank of Australia's (RBA) long-term target range of two to three per cent.

The TD-MI gauge has tended to grow faster than the official measure of the consumer price index (CPI), which ran at an annual 2.8 per cent in the third quarter.

Official numbers for the fourth quarter are due on January 25.

TD head of Asia Pacific research Annette Beacher estimated the CPI would rise 0.8 per cent in the quarter, nudging the annual pace up to 3.1 per cent.

"Our monthly gauge confirms that uncomfortable inflation pressures emerged in the final months of 2010," Ms Beacher said.

Contributing most to the overall change in December were price rises for fuel, fruit and vegetables, and holiday travel and accommodation.

Those were partly offset by falls in prices for audio, visual and computing, sport and other recreation, and books, newspapers and magazines.

... Damage caused by the floods in Queensland would likely see some food prices climb this quarter, while a massive rebuilding effort in coming months could put upward pressure on wages and inflation over time Ms Beacher said ... "with vast tracts of the Brisbane CBD severely affected by the floods, the concentration of infrastructure to be repaired could exacerbate already stretched labour and building materials, hence the upside to inflation could last longer than the temporary food price spike."

No doubt RBA governor, Glenn Stevens, will 'look through' the food price spikes at the February meeting. But the danger of a medium term labour price spiral will be of concern.

That danger is going to quickly worsen because the government today acknowledged that the:
"...commitment to return the federal budget to surplus in 2012-13 is coming under more pressure as the likely damage bill from the most devastating series of floods in Australia's recorded history continues to mount.

With the still unfolding crisis in Victoria adding to a colossal damage bill in Queensland, Ms Gillard and Treasurer Wayne Swan yesterday conceded that the budget would be stretched by flood recovery and rebuilding costs for years.

Pointedly, when discussing the financial implications of the floods, Ms Gillard did not repeat assurances earlier this month that the promised schedule for a return to budget surplus would be unchanged.

''We will be managing the federal budget so that we can meet the needs of recovery and rebuilding,'' Ms Gillard said. ''I know that there is going to be a lot of effort, money and resources needed to rebuild, particularly rebuild Queensland.''

Mr Swan said the government would be up for a ''very substantial amount … It will involve billions of dollars of Commonwealth money and also state government money and there's going to be impacts on local governments as well.''

This blog isn't arguing against spending this money. What's the point of saving if not for a rainy day?

However, as the coverage on this blog has recently illustrated, the world is quickly swinging from a GFC-deflation toward a recovery led by commodity price inflation. This blog also noted last Friday that Australia's commodity majors are moving to capitalise on this by pushing short term contacts for iron ore (and coal). When they succeed the national economy will face an explosion of cash in the first half of the year.

Late last year, Glen Stevens, observed that Australian monetary authorities are vulnerable to the charge that they haven't raised interest rates early enough in past business cycles. In a November senate testimony the Gov said:
I cannot think of very many cases in history where we looked back and thought, ‘Yep, we tightened too soon.’ I can think of several times where we looked back and thought we should have tightened a bit earlier. I think that if we are doing it right the decisions will be finely balanced most of the time—that is where we should be—and we will probably move a little bit earlier than the moment when it is clear that you have to. That is if we are doing it well. There is some risk that you do things you do not need to do—I agree with that. We have to balance that risk, obviously, against the risk of getting behind the game. Historically, for many central banks, including us, that has tended to be the mistake that we made.

So, in the new normal course of events, we would expect to see rate rises flowing through as soon as the new commodity contracts see ore and coal prices soaring.

Sadly, however, there's a complicating factor: The effect of the floods on asset prices. The SMH also reported yesterday that:
House prices in Queensland may sink as the financial effects of state's devastating floods strain household budgets and dent banks’ willingness to lend, a ratings agency has warned.

Credit ratings agency Fitch said today that while the full impact of the Queensland floods is impossible to gauge at this point, they are expected to have a negative impact on house prices, borrowers and banks.

Property damage may “temporarily or permanently affect” borrowers' ability to pay and could cause “lower than normal recovery rates for damaged properties”, the credit agency warned.

Losses for banks could also mount if people can't fully repay loans. Fitch said lenders' mortgage insurance - insurance held by the banks themselves - does not cover flood damage.

... Defaults on home loans may force Fitch to reconsider assumptions it made about recoveries on losses when it initially rated the mortgage-backed securities linked to Queensland's real estate, it said.

“Moreover, the market value for properties located in the flooded areas might now be permanently adjusted downwards due to future flooding risk," the agency said.

This blogger will add that if RMBS are in the gun for downgrades, so, most likely, are QLD banks. It's not yet clear whether this will be sufficient to prompt an increase in the major's funding costs. Let's hope not. But the piece goes on suggest that:
RMIT Property & Valuation lecturer Matt Myers said the values of the homes depend in large part on how viable the local economy remains after the floods.

“Some areas will see an eventual return to similar values - lots depends on the economy of those areas,” he said.

“If there are jobs, people want to stay, and if enough people have adequate insurance to rebuild, then these areas will do well,” he said. “But I expect some of the rural areas may never fully recover.”

Houses that are blocks away from creeks that have been flooded will probably be valued lower, by as much as 10 per cent, said RP Data's Cameron Kusher.

“For the next five years of so, a flood report is going to be the buzzword for anyone wanting to buy property in Queensland or other states, as well.”

This blogger reckons the article has it backwards. It's not quite so pessimistic in the short term because there will also be increased activity in non-flood affected areas as people move. This could put some areas under upwards price pressure.

Looking further out is a different matter. The article neglects a major problem facing flood-effected home owners - the cost of insurance is going to rise - a lot. As Bloomberg reported yesterday:
The Queensland floods may cost insurers and reinsurers worldwide as much as $6 billion in what might be Australia’s costliest disaster in history.

Insured losses from this week’s deluge in and around the capital Brisbane may be as high as $4 billion, while damage from floods further north late last year may cost $2 billion, according to Milan Simic, managing director of catastrophe modeler AIR Worldwide.

Political pressure is mounting on Australian insurers, which include Suncorp Group Ltd., Insurance Australia Group Ltd. and QBE Insurance Group Ltd., to pay claims as residents return home to assess damage. Those companies are spared from the bulk of the costs by policies designed to pass on the bill.

This blog noted last week that the experience of New Orleans' home owners following Hurricane Katrina was an immediate surge in prices that was followed by relentless deflation, owing in part to onerous insurance premiums, especially at the top end. This blogger reckons a similar dynamic is set to put downward pressure on Brisbane house prices.

So the RBA is also likely looking at accelerated declines in QLD asset prices in the medium term. And there will also be immense political pressure to not raise rates as suffering Queenslanders rebuild.

The RBA is facing a tough choice sooner rather than later. Raise rates and face opprobrium. Or, wait, and get hoisted on its own petard.

Links January 18: Fiscal flood

Germany's European rescue. Wolfgang Munchau
Weather hitting steel. FT
Pox Americana. Niall Ferguson
Albert Edwads gets the chills. Zero Hedge
Canada tightens macroprudential. Bloomberg
Surplus washed away. SMH
Interest rates. Ian Verrender
TAFE gets Dutch Disease. The Age
Coal damage. The Age
Resources wage demands. Jennifer Hewitt
Chinese port ore stocks at record highs. Mineweb
Ore rocket. Bloomberg

Monday, January 17, 2011

Retailers need therapy

From the SMH today:
The Retail Coalition is preparing to hand in documents to the securities regulator to officially incorporate its activities, enabling it to hire staff and ramp up its calls for urgent tax reform.

The documents will detail plans to establish a new independent company with a constitution, board of directors, company secretary, employees and hands-on chief executive. At a national dial-in set for 10am today representatives of each company in the Retail Coalition will further discuss their battle plans, BusinessDay can reveal.

Those plans include the transformation from an informal gathering into a company under the Australian Securities and Investments Commission, providing a crucial foundation to r tchet up the lobbying campaign.

The conference call is part of a commitment to talk to one another twice a week, with chief executives personally dialling in on most occasions. It is the clearest signal since the debate erupted after Christmas that the big retailers that make up the coalition are far from backing off or intimidated by the wave of public abuse provoked by their case, and will push ahead with their public policy concerns. But it will also bring a more professional pitch to their campaign, which to date has been dismissed as the complaints of a few billionaires threatened by competition and drowned out by the howls of shoppers who feel they are trying to cut their access to overseas bargains.

Gosh, the retailers really did go off half-cocked didn't they? Whatever happened to research, plan and execute? Perhaps they felt the campaign couldn't wait until after Christmas.

Shifting the campaign to a more professional approach, however, is hardly going to convince the body politic of the need for protection. Especially when it involves supposedly competing CEOs getting together weekly to discuss how to prevent competition.

In short, nothing has changed since this blogger wrote in the lead up to Christmas:
The first point to make about this is that the campaign is up against it in winning over the public. Anti-RSPT miners had three advantages that the retailers do not. The tax was distant and complex, making it a PR-makers dream to combat. All it needed was a million conflicting 'facts' and the population gets lost, the policy ceases to make sense and, in the confusion, the clear message of risk shines through.

The retailers on the other hand are attempting to increase the price on sub $1000 household goods. For consumers it is a personal and very clear affront.

Second, the RSPT debacle unfolded in a very different political economy. The combination of an election and a post-GFC moment in which mining was at least one part of saving the nation made the anti-RSPT message stick.

The retailers face an environment of higher interest rates and one in which although the economic recovery is reasonable, it is patchy.

Moreover, just about every official and private economist everywhere has been selling the nation the idea that we need to shift economic resources to the resources sector so it's moment in the sun is not dimmed by labour or infrastructure bottlenecks.

Other sectors need to give it up, according to this chorus.

Another difference to the anti-RSPT campaign is that its goal was to prevent a new government policy. The retailers want to create new government policy that will fly in the face of RBA objectives and rhetoric.

On the last point, this blogger will observe that the retailer's demands can be seen as a gift to a government with no productivity agenda and no reform credentials. It can just sit on its hands and boost both by looking tough on rent-seeking. And with the populace against the billionaires, it's all politically risk-free benefit.

The retailers are wasting their shareholders' money.

La Nina as Black Swan update

For those that missed it, Yves Smith of Naked Capitalism fame quoted liberally from our very own Flashman over the weekend, firing off a frenzy of activity.

Amongst that traffic was a comment from Bruce Krasting that included an excellent link comparing this super La Nina with those of the past. He concludes:
You are correct that an extreme La Nina is responsible for the wacky global weather of late. The good news is that the cycle peaked in December and we are now reverting to more neutral conditions.

NOAA has an excellent graph that tracks this. Look at how steep this La Nina is. Look also how it compares to the 73' event.

Hang in the Australia (and many other parts of the world) better weather is coming.

The graph referred to is reproduced above. Clearly the mid seventies ENSO suggests a reprieve. But it also displays a worrying double dip. The 1955 super La Nina shows a similar pattern.

The conclusion of the paper referenced by Krasting says it all:
Stay tuned for the next update (by February 5th) to see where the MEI will be heading next. While La Niña conditions are indeed guaranteed well into 2011, it remains to be seen whether it can rally once more to cross the -2 sigma barrier, and/or whether it will indeed last into 2012, as discussed five months ago on this page. I believe the odds for a two-year event remain well above 50%.

Should coal carry a risk premium for the next twelve months?

Links January 17: Inflation nation

China trade tensions vs consumers. Wharton (h/t nakedcapitalism)
China's gigantic white elephant. Credit Writedowns
Issues 2011. Doug Noland
Week ahead for the DOW. Calculated Risk
Oil shocks. Econbrowser
Coal shock. The Oz
PIMCO goes for MBS. Zero Hedge
Commodities and dollar inflation. Calafia Beach Pundit
China bears. Telegraph
China must buy dollars. Reuters
Whither next food riots? Business Insider
The FED on housing in 2005. Tim Duy
Retail whingers comeback. SMH
28,000 homes need reconstruction in QLD. The Age
Peak olives? Bloomberg
The Black Gate Opens. Stephen Munchenberg
JPMorgan claims copper deficit vs JP Morgan has cornered copper.

Saturday, January 15, 2011

Weekend Reading: Seventies bogue

China: credit and bank requirements surge. FT
Korea innovates on macroprudential. Gillian Tett
Commodity speculation. FT
No to position limits. Zero Hedge
Jim rogers goes for rice. Zero Hedge
Weather worries. AR Screencast (including our own Flashman)
Indian inflation on charge. Bloomberg
German inflation up. Bloomberg
US inflation up. Calculated Risk
Sustainability of recovery. Tim Duy
US demand is all about exports. Econompic
China bust. Colin Kruger