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Comments

Anthony

Here is one:

You know that Toyota Prius? Best selling hybrid?

It is made only in two places: a) Japan b) small factory in China. And majority of Prius is going to US market.

This is not even over. Car industry is going to experience major shift, as China absorb Japanese robotic technology, part Korean technology, and internal design.

Already China's biggest domestic are makers are Sino-Korean, followed by US-China, and Chinese. We are not the default number one makers in China. I imagine It will take the chinese less than 5 years to start making reasonable quality car that will pass US standard.

Second: technology transfer from Taiwan. Since the new taiwanese government are now a bit more friendly Several key technology might be permitted to flow to china. (sub 130micron fab)

This will have huge impact to consumer electronic price and computer parts. Which in turn will feed into chinese design house.

essentially "taiwan miracle" the size of china.

And the speed of deal in china is several order of magnitude faster than everywhere else because they don't have as many regulation as US, Taiwan or Japan.

--------

Basically,

Telco and server gear, cars, machineries are all going to be chinese made soon. They quit doing walmart stuff.

Paul S

Watched the Presidents news conference today. What is his solution to $4/gallon gas and $17 billion dollar oil co. profits? Why, we need to drill in the US, especially Anwar. Like that will really help. "Dubaya" puts the blame for everything on Congress. Mr. Bush made the outrageous claim that Congress is thwarting the oil companies from building more refineries!!! The fact is, that after the Exxon-Mobil merger in 1993-94, the OIL COMPANIES shut down refineries. As I have said in earlier posts, the oil companies do not WANT excess oil refining capacity. This would hurt their profits. The oil companies want minimal refining capacity so oil supplies are vulnerable to ANY and EVERY supply disruption. This allows for price raising at every disruption, no matter how remote. Does anyone really think that the envirnmentalists can battle the oil companies successfully? OPEC isn't the only cartel gouging the American consumer. I love listening to the oil company execs explain themselves. Since 1996, they say, they have invested over a billion dollars on oil exploration. Let's see...a billion dollars spread out over 12 years is maybe $100 million/yr.Not a sincere effort IMHO. This investment comes from an industry that currently makes $17 billion in profits. The real problem is we have too many oil men willing to bankrupt the country for THEIR profits--and the politicians who do their bidding. All this is likely not news to readers of this forum.

Anthony

I think the current oil price has more to do with Middle east politics.

My sense, this is Saudi pissed at Bush reneging on giving the Palestinian independence. (Cheney tried twice to bring down oil price with that middle east trip right? Oil goes down a little then vooom...reaches record)

and now it's at $116-120 range. This is after Syria-Israel nuke bombing talk.

If I have to read it. It seems Saudi, et all. is punishing Bush and saying "Give Palestinian Independence, or you gonna keep seeing oil price climb until GOP lost entire election."

Of course Bush is in a bind with aipac/neocon and can't give Palestinian independence. (notice how Olmert was said to "leak" secret Bush promise about expanding settlement/independent promise)

Elaine Meinel Supkis

China's rising oil use is pressuring the oil markets. And we can't stop this force. Not at all. We are very close to the Hubbert Oil Peak. Ironically, the ONLY way out is to melt all the ice in Greenland and Antarctica! There is probably a whole lot of oil there.

Anthony

yeah, but China consumption doesn't increase 5-8% within a week right? In fact china is slowing down a bit in the past few month.

Their economic growth is 10%/annum, not 300%.

Oil price increase doesn't correlate with China's growth. No doubt China is going to use more and more oil and increasing global price. But not current fluctuation. Some other force plays bigger role right now.

OC

Anthony,

Could it be due to US military increasing its stockpile of oil inventories in preparation of 'problems' with Iran?

Elaine Meinel Supkis

The more we talk war, the higher the price.

calvino

The biggest consumer of diesel is not the trucking industry, not the airlines, not the euros driving 1.6 liter diesel Volkswagens. The winner is the US military, burning it up in our two occupations. We leave, diesel drops like a stone, along with gasoline. Secretary Bodman did say that we are going to keep filling our strategic oil supply in spite of the prices. Perhaps we are preparing for a supply disruption. If you use heating oil, it may be a good idea to keep the tank full, especially if you have a diesel vehicle that can use it.

GK

Hi Elaine, we need to know a lot more about Japanese and Chinese history here in our united states of ignorance.

Have you ever heard of this crazy Mukden Incident and the ensuing gold leasing scheme?

http://www.fourwinds10.com/siterun_data/government/corporate_u_s/news.php?q=1209499824

"If events proceed as I hope, the Federal Reserve also will be dissolved as insolvent, and its Notes we have used as currency for 75 years will become valueless after some period where legally earned notes may be exchanged for new and legal United States money. *There will be volumes written in the future about how the United States of America, and particularly the control of our Treasury were quietly placed in private hands and secretly, from the general population, held and used there for 75 years. Those hands were for the most part,European, and had little, if any, interest in the welfare of the Citizens of this nation. Some of the "hands" were US, and they were even more ruthless. *

*But the situation has dramatically changed during the past five years, and particularly since November of 2007.*

*This narrative will necessarily begin with the Japanese invasion of Manchuria at Mukden. That is a well known historical fact. What is not as well known and understood is the "Mukden Incident" which occurred on September 18, 1931 was, in essence, a subterfuge undertaken by a few junior officers of the Japanese army when they secretly dynamited the South Manchurian Railway (owned by Japan) to provide the motive for the Japanese military conquest of Manchuria which continued until the Japanese victory on February 18, 1932 .*

*The most available explanation for the Japanese Manchurian invasion was that Japan coveted resource-rich Manchuria as a source of cheap raw materials for their burgeoning industrial complex. That explanation's basis is true, especially given an increasing shortage of favorably priced raw materials which Japan had to otherwise purchase and import from other sources.*

*But there was another, and largely hidden, reason. In 1931, the Manchuria-China border was only a few miles from Beijing where the Chinese Emperor, Pu-yi resided. The Manchu emperors kept much of their gold and other treasury items in northern Manchuria just a few miles from border, and therefore only a short distance from their Chinese capital.*

*Very shortly after the Japanese invasion commenced in southern Manchuria, a delegation sent by the United States Federal Reserve Bank to Beijing entered into negotiation with the Emperor. The Federal Reserve's offer was to quickly remove the Royal Treasury from its Manchurian location, and thereafter lease the contents of the Treasury for seventy years. In return, the Emperor received valid United States Federal Reserve bonds, maturing in seventy years, and in sufficient quantity to guarantee the debt as well as enough to pay the to-be accrued- seventy-year-interest. *

*The terms of the lease required the Emperor's estate, at the end of seventy years, to exchange the bonds with interest coupons attached, to the Federal Reserve in exchange for the return of all the Emperor's gold and other treasure, plus the accrued interest (to be paid in gold), to his estate's custody. *

*The contents of the Emperor's Manchurian Treasury were taken overland through China, and then by sea to Manila, Philippines, where the US quickly built and operated the largest gold refinery, at that time, in the world. After the gold was refined, some of it was sent to Switzerland where it was stored in extensive underground vaults under Zurich, while the greatest part was sent to the Federal Reserve vaults in New York.*

*Of course, much happened between 1931 and 2001, not the least of which was World War II and the Chinese Communist capture of all China except the island which was then called Formosa (now Taiwan). Pu-yi (the Emperor) remained a communist prisoner for many years and died as a gardener.*

Paul S

OPEC blames the weakening dollar for the price increases, but I think there is a little more. Such as OPEC wants to hit Bush where it will hurt him, the US voters. Of course, don't you people listen to "Dubaya" and the talk radio (insert envective here) folks? I listened to "Dubaya's" press conference today. He said we are not in a recession and it doesn't matter anyway because the American people don't care what you call it. Why, thank you for enlightening me, Mr. President. It's those damn LIBERALS in Congress who are STOPPING the poor beleaguered oil companies from building refineries. Yes sir, it's those big government, LIBERAL greenines who are wrecking it for everyone. It's not the Saudis OR the oil companies themselves who want to max out their profits. OR the K Street crowd. I just hope I'm there to see these corpoate cruds get their comeuppance. Buchanan had a good one today. He said the Republican party has modeled it self after Enron. haha

Elaine Meinel Supkis

Buchanan has turned against his masters. Woof!

US gold: we sucked in all the world's gold after WWI and then even more, after WWII. We lost 70% of this gold by 1972! Isn't that amazing?

Richard

Yes Ms. Supkis, you have it correct: "We are cowboys who are being turned into cows being herded into cattle cars". It's all part of the Liquidation Thesis that I outline on the attached link. Richard

rockpaperscizzors

Nobel laureate Joseph Stiglitz reveals true cost of war during Kellogg visit

Government accounting flaws, deception hide grim numbers associated with Iraq conflict, claims former World Bank economist

April 21, 2008 - The United States is bleeding money. That’s the alarm sounded by Joseph Stiglitz in his new book The Three Trillion Dollar War, a narrative that details what he and co-author Linda Bilmes, a Harvard professor of public finance, say are the staggering hidden costs of America’s current Iraq War.
.....U.S. government has convinced some Americans that the Iraq conflict carries a far more modest price tag than Stiglitz and Bilmes say is accurate. In fact, Stiglitz, a professor at Columbia Business School, believes his own $3 trillion figure is “conservative.” The real figure may be closer to $4 or even $5 trillion

....Stiglitz also pointed to what he considered broader economic mistakes made during the last eight years of the Bush Administration, which have contributed to the U.S. deficit ballooning from $6 trillion to $9 trillion, with about a third of that increase “directly due to the Iraq War,” according to Stiglitz. What’s more, that economic circumstance has resulted in some 40 percent of war costs actually being funded by foreign countries, through investments in instruments such as Treasury bonds, a situation Stiglitz said leaves the United States “more vulnerable to global volatility.” He faulted “lax regulation” and a “reckless increase in liquidity” by the Federal Reserve under former Chairman Alan Greenspan and current Chairman Ben Bernanke as contributing to the recent real estate bubble and credit crunch, and considered this fiscal policy an attempt to prop up a fundamentally flawed economy whose collapse during the early years of the war could have eroded public support for the military intervention.
http://www.kellogg.northwestern.edu/news/whatsnew/stiglitz-lecture.htm


Elaine Meinel Supkis

Today we learn the budget deficit this year will be HALF A TRILLION.

Will be writing about this upcoming mess.

rockpaperscizzors

BP's first-quarter profit jumps 63 percent
The oil company on Tuesday reported a profit of $7.6 billion compared to $4.4 billion in the first quarter of 2007.
First-quarter profit was up 73 percent compared to the previous quarter.
http://edition.cnn.com/2008/BUSINESS/04/29/britishpetroleum.profit.ap/

Shell profits up 25 pct on record high oil prices
Anglo-Dutch energy giant Royal Dutch Shell said Tuesday that first-quarter net profits leapt 25 percent to 4.58 billion pounds because of record-breaking crude oil prices.
http://afp.google.com/article/ALeqM5iftQ-7-T9grM4N1CDCNwSxyYla7Q

rockpaperscizzors

Iran dumps U.S. dollar for oil trades
TEHRAN, Iran (AP) -- Iran, OPEC's second-largest producer, has stopped conducting oil transactions in U.S. dollars, a top Oil Ministry official said Wednesday, in a concerted attempt to reduce reliance on Washington at a time of tension over Tehran's nuclear program and suspected involvement in Iraq.

..."The dollar has totally been removed from Iran's oil transactions," Oil Ministry official Hojjatollah Ghanimifard told state-run television Wednesday. "We have agreed with all of our crude oil customers to do our transactions in non-dollar currencies."

Iranian oil officials have said previously that they were shifting oil sales out of the dollar into other currencies, but Ghanimifard indicated Wednesday that all of Iran's oil transactions were now conducted in either the euro or yen.

"In Europe, Iran's oil is sold in euros, but both euros and yen are paid for Iranian crude in Asia," said Ghanimifard.

Iran's central bank has also been reducing its foreign reserves denominated in dollars, motivated by the falling value of the greenback and U.S. attempts to make it difficult for Iran to conduct dollar transactions.

U.S. banks are prohibited from conducting business directly with Iran, and many European banks have curbed their dealings with the country over the past year under pressure from Washington.

However, the U.S. has been wary of targeting Iran's oil industry directly, apparently worried that such a move could drive up crude prices that are already at record levels.

Iranian analysts say Tehran can withstand U.S. pressure as long as it can continue its oil and gas sales, which constitute most of the country's $80 billion in exports.
http://edition.cnn.com/2008/BUSINESS/04/30/iran.oil.ap/index.html?iref=mpstoryview

Undoubtedly, Cheney is putting on his war paint & Bush wearing his white cowboy hat and boots, fake western drawl, stuttering idiot routine, flag pins, and the USS Nimitz backdrop. The 'nuklear war cry to distract the shlub americans from high oil and food prices.

rockpaperscizzors

Does this mean that helicopter Ben won't drop the interest rate again? OPEC is watching to see what the cowboy whitehouse reaction will be. Ben drops rates the dollar tanks more or keep rates steady and the dollar won't sink into oblivion, or in fantasyland increase the rate and start a fiscal policy of rebuilding the economy and savings. Iran may be doing us a favor by forcing the banks to stop the current irrational exuberant Greenspan/Bernanke policies of the USA on a respirator of cheap foreign crapola and easy money debtor Nation. What will Japan do?

Paul S

The current Bush in the White House has been a TOTAL disaster for the country. This President has nearly doubled the national debt to almost $10 Trillion. And the arrogance of this administration knows no boundaries. They have the nerve to blame oil price increases on those damn LIBERALS in Congress. Bush fully knows that this is not true It's been a Ponzi scheme ALL along. And the Bushies have known it was a scam for a long time, maybe from the beginning. The Bushies--right now are merely in a holding pattern, hoping the you-know-what doesn't hit the fan until AFTER they leave office and are safely ensconced in "consultancy land" (in DC of course) or "lobbyist land" (similar to consultancy land). Sadly, these crud will not be leaving DC nor stop causing mischief for the country--ever. They will, like monsters, only reappear in a different form, like an evil Hydra with multiple heads.

rockpaperscizzors

It appears the USA & China are playing a game of Red Rover, red rover let.....come over. China has strengthened its' ties with Tawain, Japan, India, Iran, Russia, Asia, and now Pakistan. Bush and Cheney's dumb ass foreign policies have in turn created these alliances. Bush economic policies of debt into perpetuity to foreign nations, bankrupting us via a pre-emptive war, no-bid contracts, de-industrialized the USA, hobnobbling and over-stretching our military, Israeli head,Chertoff homeless security, and fake FEMA. Well, Bush is the new Brownie. "Brownie, You're Doin' A Heck of A Job." Will he last until January or soon, use his one way ticket to Paraquay via Air Force One?

India and China 'shield' Asia from slowdown
http://edition.cnn.com/2008/BUSINESS/04/30/china.economy.ap/index.html

Musharraf Lobbies Beijing to Build Iran-Pakistan-China Gas Pipelines
http://www.turkishweekly.net/news.php?id=54413

Pakistan, Iran finalize gas pipeline deal
http://www.apakistannews.com/pakistan-iran-finalize-gas-pipeline-deal-68605

Elaine Meinel Supkis

-Yes, I just published a story and cartoon about all this, Rock, right when you posted all this great information!

Iran is winning this war, no doubt. If the US turns it into a shooting war, we will be destroyed just like previous empires that went bankrupt thanks to such wars! There is no other ending but our doom. This is why the 'hard' choices are the GOOD choices: cut our military losses, retract our obligations, let others run the planet for a while. We lick our wounds and rebuild our economy and begin exporting.

rockpaperscizzors

China offers Pakistan military aid to fight terrorism
http://economictimes.indiatimes.com/PoliticsNation/China_offers_Pakistan_military_aid_to_fight_terrorism/articleshow/2984665.cms

This is China's version of comeuppance for the USA's intrusion in the Zimbabwe arms transaction.

Zimbabwe: Huge Arms Shipment Sent Back To China |Sky News|World NewsSky News - A ship carrying arms and ammunition destined for Zimbabwe has ... she said about the US State Department's demand that China halt the shipment. ...
news.sky.com/skynews/article/0,,30200-1313901,00.html - 40k

Anthony

Hey, look everybody. Another rate cut. weeeee....

Elaine Meinel Supkis

Oh, China has always wanted to stop terrorists in Pakistan! They share a border! They are heavily courting Pakistan and will, in the long run, win.

Paul S

News item: 3 of the 4 biggest banks are....Chinese. Congrats,BTW to Alan Greenspan. He knew when to leave the Fed.

Elaine Meinel Supkis

Yes. They be bank. To think they said this with great confidence in 1985 is just too much.

red sole

Thanks, I'm going to have nightmares tonight.

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