The Wall Street Journal Asia August 21-23 2009

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U.S. stocks and crude in synch; both rise to 2009 highs

As crude oil on Friday finished at its highest level for the year near $74 a barrel, energy shares rallied, fueling the broader U.S. stock market to cross the finish line with similar gains. But if oil does a replay of its performance last summer, what's been viewed as a bullish signal could turn bearish for U.S. equity investors.

"If it jumps back up to $140 (a barrel,) for the U.S. economy that is broadly negative. If it drops back to $40, it's a positive in the short term, since it's a tax break for consumers and businesses. The opposite is true when prices are going up," said Ryan Brecht, senior economist North America, Action Economics.

Asked at what price level the stock market would no longer be applauding crude's rise, Dan Greenhaus, chief economic strategist, Miller Tabak & Co. replied: "Well, last year we found out that around $100, the market took notice." (more)

The End of Cheap Water?

The price of water is starting to rise in a big way, at least in China. I’ve expected this for a few years.

To set the table, water rates in China have been so far below the global average it’s ridiculous. Especially when you consider the severe water problems in China. The graphic below is from The Wall Street Journal (“China Cities Raise Water Price in Bid to Conserve” by Andrew Batson):

The Chinese are water-poor. They are sucking their aquifers dry. It is particularly bad in the north of China. The groundwater under the North China Plains is draining away quickly. By some estimates, China will exhaust this water supply in the next ten years. (more)

HUMOR

Nickel May Gain as Stockpiles Fail to Deter Funds: Chart of Day

Nickel, which surged 17 percent the past month, may advance further as “price momentum” and inflation expectations lure fund managers even as stockpiles of the metal approach a 14-year high, according to Commerzbank AG.

The CHART OF THE DAY shows the price of nickel and open interest on the London Metal Exchange. The lower panel tracks inventories in metric tons. The price jumped to its highest level for a year on Aug. 13 and open interest was a record 147,117 contracts on Aug. 14, according to LME data. Stockpiles of the material used to protect steel from corrosion are close to the highest since 1995 amid weak demand in the construction and transportation industries.

“I find the one-way, very dramatic price rise in all metals anomalous given the shaky fundamental basis and rising LME inventories,” Eugen Weinberg, a commodity analyst with Commerzbank in Frankfurt, said in an interview Aug 18. “The price momentum behind metals is so strong that the market is attracting external players.” (more)

The History of the "Money Changers"

Economists continually try and sell the public the idea that recessions or depressions are a natural part of what they call the "business cycle".
This timeline below will prove that is simply not the case. Recessions and depressions only occur because the Central Bankers manipulate the money supply, to ensure more and more is in their hands and less and less is in the hands of the people.
Central Bankers developed out of money changers and it is with these people we pick the story up in 48 B.C. below. (more)

4 million home loans are delinquent

The number of Americans who have fallen at least 30 days behind on their home loan payments jumped 44% in the second quarter from a year ago, according to an industry report.

That puts delinquencies at a record 9.24% of mortgages, according to the National Delinquency Report from the Mortgage Bankers Association (MBA). That represents more than 4 million of the 45 million borrowers covered by the report.

What the rate does not include, however, are loans already in foreclosure. Some 4.3% of all the mortgages are in that stage, up from 3.85% three months earlier and 1.55 percentage points from one year ago. (more)