Wednesday, March 24, 2010

Oil reserves 'exaggerated by one third'

The scientist and researchers from Oxford University argue that official figures are inflated because member countries of the oil cartel, OPEC, over-reported reserves in the 1980s when competing for global market share.

Their new research argues that estimates of conventional reserves should be downgraded from 1,150bn to 1,350bn barrels to between 850bn and 900bn barrels and claims that demand may outstrip supply as early as 2014. The researchers claim it is an open secret that OPEC is likely to have inflated its reserves, but that the International Energy Agency (IEA), BP, the Energy Information Administration and World Oil do not take this into account in their statistics. (more)

Jay Taylor: Turning Hard Times Into Good Times

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The Stealth Palladium Bull Market

The steeper the mountain the harder the climb the better the view from the finishing line Anonymous

Palladium was the underdog of the precious metals sector for a long time, because for the most part it hardly received any attention. In the last few months this all changed and with the introduction of the Palladium ETF (PALL), Palladium has finally emerged from the shadows to the spotlight. Now the average Joe has a way to jump in and out of Palladium without having to actually purchase the metal. In reality owing the physical is far better than buying the ETF, but that is a topic for another day. (more)

Gold's current consolidation phase to continue as the market looks for new direction.

Many market commentators argue that investing in gold is a waste of time especially since it does not pay interest and remains inert. This statement is very misleading. The issue of interest has no relevance. No one has ever invested in gold in order to receive interest. While gold is a precious metal as well as being a form of global currency, it is also a commodity. And, the reason why investors buy commodities is not for an annual dividend payment, but for a return on their investment that occurs as the price of the commodity appreciates. (I have not heard analysts say don't buy corn because it doesn't pay an interest). And, in many instances this rate of appreciation can be truly spectacular giving investors massive returns. (more)

Demand for Treasuries Soars, Defying the Experts

Many experts predicted this would be the year of the bear for Treasuries, as the exploding U.S. debt burden and fears of inflation drove investors to other assets.

But that hasn’t been the case.

The 10-year Treasury yield has actually dipped 20 basis points so far in 2010, to 3.65 percent. (One basis point is equivalent to 0.01%, or one-hundredth of a percentage point.)

Remember that bond prices move in the opposite direction from yields.

The government has had little difficulty in finding buyers for the record amounts of bonds it is issuing — $2.1 trillion last year. (more)

Top Analyst: "Developed Market Governments Are Insolvent By Any Reasonable Definition"

Dylan Grice, a top analyst for European financial giant Société Générale, writes:
Developed market governments are insolvent by any reasonable definition.

Who could have known?

Everyone, actually.

As I wrote in December 2008, "The "Central Banks' Central Bank" says Bailouts Putting Nations at Risk, as Confirmed By Higher Credit Default Swap Spreads":

The Bank for International Settlements (BIS) is often called the "central banks' central bank", as it coordinates transactions between central banks.

BIS points out in a new report that the bank rescue packages have transferred significant risks onto government balance sheets, which is reflected in the corresponding widening of sovereign credit default swaps: (more)

Lehman Bros categorized loans as sales to hide debt

Underemployment At Record 20% According To Gallup

Just in case anyone needed confirmation that the DOL data is just a little, how should we say it, cooked, here comes Gallup with their March 15 undermployment number, which just hit a 2010, and series, high of 20%. This is obviously worse compared to both the beginning of the year (19.5%) and February (19.8%). Unlike the Dept of Labor's arcane voodoo which lately is based more on executive confidential memos and snowfall observations, Gallup's underemployment measure is based on more than 20,000 phone interviews collected over a 30-day period and reported daily. Furthermore "Gallup's results are not seasonally adjusted and tend to be a precursor of government reports by approximately two weeks." We wonder if the abnormally hot March weather will used as an excuse for a deterioraiton in the most recent NFP numbers. (more)

Metals Position Limits

RE: metals position limits

Regarding the Dire Necessity of Imposing Metals Position Limits on the Shorts

Others have written to the CFTC as if they assume the CFTC is made up of good people who would enforce position limits if only they knew that the markets were manipulated; and thus, two others have written the CFTC to show the current manipulation in progress.

I'm not so gracious, as I have written to the CFTC before, and I know that the CFTC has always evaded the issues. Therefore, I must assume the CFTC is made up of people who only think they are doing good, who assume that letting big banks get what they want is somehow compatible with free market theory, and thus, not regulating the bankers' position limits is somehow good, and that hiding the truth is somehow good for the nation.

Thank you, Bart Chilton, for writing that "he does not think his fellow commissioners are currently willing to support a move to curb speculation for metals contracts" so that we can help to persuade them. (more)

15 Facts About China that Will Blow Your Mind

  1. By 2025, China will build TEN New York-sized cities.
  2. By 2030, China will add more new city-dwellers than the entire U.S. population.
  3. China already consumes twice as much steel as the U.S., Europe and Japan combined.
  4. If the Chinese, one day, use as much oil per person as Americans, then the world will need seven more Saudi Arabias to meet their demand.
  5. There are already more Christians in China than Italy, and China is on track to become the largest center of Christianity in the world.
  6. Chinese are far more likely to believe in evolution than Americans.
  7. Chinese internet users are five times as likely to have blogs as Americans.
  8. China has 150 percent more soldiers than America does -- plus a high tech 'Kill Weapon' the U.S. can't deal with.
  9. China still hasn't rid itself of Europe's medieval plague.
  10. Forty percent of Chinese small businesses went bust or almost went bust during the world financial crisis.
  11. China executes three times as many people as the rest of the world COMBINED -- and uses mobile execution vans for efficiency.
  12. China averages 274 protests PER DAY.
  13. When you buy Chinese stocks, you are basically financing the Chinese government. Eight of Shanghai's top ten stocks are state-controlled arms of the government.
  14. Fifty percent of counterfeit goods come from China.
  15. The majority of Chinese drink polluted water.

Chart of the Day