-
-
Re: Yes Virginia...It's a Bubble...
Maybe but I know it is one of the very few outcomes the market is not anticipating. There are funds out there betting against Japan or against China etc but not a commodity powerhouse like Glencore.Comment
-
Re: Yes Virginia...It's a Bubble...
unless of course something else happens ?Originally posted by ProdigyofZen View PostComment
-
Re: Yes Virginia...It's a Bubble...
High debt, but if memory serves $13b EBITDA last year (only 10% tax in Switzerland), but not sure I'd short the most sophisticated int'l trade financier out there with 40 yrs plus exp. in comm. trading. The co. is fundamentally different from their competitors, far less transparent and they tend to know things before others and position themselves to benefit. The marketing arm which is a very high margin business and lack of iron ore exposure differentiate them from the diversifieds, too. Freeport, BHP et al are an easier play, less black box and frankly less smart management.Originally posted by ProdigyofZen View Post--ST (aka steveaustin2006)Comment
-
Re: Yes Virginia...It's a Bubble...
Glencore is living off its legacy...still benefiting from the Marc Rich aura.Originally posted by steveaustin2006 View Post
The retention package fiasco after the original announcement of the "merger" with Xstrata took the shine off. At the end of the day it was a dipstick deal at a stupid valuation, motivated purely to benefit the executives not the shareholders.
Below a direct extraction from the GlencoreXstrata website. I will never invest in a mining company that spouts this sort of crap publicly. Freeport is the better managed company...
"We aim to integrate sustainability in every area of our company and to create shared value for all our stakeholders"
Comment
-
Re: Yes Virginia...It's a Bubble...
http://www.reuters.com/article/2014/...0MF0IG20140318HONG KONG, March 18 (Reuters) - The looming bankruptcy of a Chinese developer owing billions of yuan to domestic banks has raised worries that a softening property market is heightening risks for the financial system. But the localised focus of the firm, and the nuanced reaction of investors, shows that financial markets are not pricing in the bursting of a real-estate bubble just yet. Government officials told Reuters on Tuesday that Zhejiang Xingrun Real Estate Co, based in the coastal city of Ningbo in Zhejiang province, is on the brink of bankruptcy. State media have estimated the company owes 15 domestic banks 2.4 billion yuan ($389 million) and individual investors another 1.1 billion, with only 3 billion yuan of assets on hand. By raising that money from individual investors, Zhejiang Xingrun's owner also broke Chinese law, and local officials told Reuters that the company's owner and his son are in custody, accused of illegal fundraising. Calls to Zhejiang Xingrun seeking comment were not answered.The true test of Beijing's commitment to risk reform will come when it confronts a potential default by one of the state-owned enterprises that dominate loan and bond markets.Comment
-
Re: Yes Virginia...It's a Bubble...
Commodity firms have a way of unwinding quickly and violently because the majority of their cash flow is tied up between a few commodities and their prices unlike a bank who has its hands in every aspect of the economy to derive cash flow.
But I do agree they have been around a long time with the best connections in the business and earn a lot per annum.Comment
-
Re: Yes Virginia...It's a Bubble...
http://www.bloomberg.com/news/2014-0...ault-risk.htmlBaoding Tianwei Baobian Electric Co. (600550) said its notes will be halted from trading tomorrow amid signals the Chinese government will allow more defaults in the nation’s onshore bond market as the economy slows.The solar-cell maker said the Shanghai Stock Exchange decided to halt trading of its 1.6 billion yuan ($258 million) of bonds, according to an exchange statement today. The company reported a net loss of 5.23 billion yuan in 2013 versus a 1.55 billion yuan earnings deficit a year ago and its capacity to repay its debt is in “absolute trouble,” Guotai Junan Securities Co. said in a March 13 report.Comment
-
China Blinks?
Seems the forecasts for the death of commodities and the materials stocks might be a wee bit premature...after all, why would the mother of all bubbles be terminated any earlier than absolutely necessary?
To date, China’s localities have turned to debt—often backed by land sales–to finance operations. The median debt-to-gross domestic product ratio of all of China’s 30-some provinces is 31 percent, with a high of 79 percent in the poor southwestern province of Guizhou, notes a March 25 report by Moody’s Investors Services. “Many provinces are reliant on land sales for a large portion of their revenues. While this revenue source has proven to be quite lucrative, it has also been highly volatile and therefore not a reliable source for debt repayment,” the report cautions...
Comment
-
Re: Yes Virginia...It's a Bubble...
Chinese Police Confront Trust Investors Demanding Repayment http://www.bloomberg.com/news/2014-0...by-police.htmlChinese investors demanding their money back from a troubled 973 million-yuan ($156 million) high-yield product in Shanxi province were confronted by police in front of a China Construction Bank Corp. (939) branch.People wearing white masks with the words “despicable bank” and “pay back our money” were among at least 30 investors facing special-forces officers in dark uniforms in Taiyuan city, about 521 kilometers (324 miles) southwest of Beijing. The nation’s second-largest bank is the custodian of the Songhuajiang River No. 77 trust, which missed six payments as of last month, according to the Economic Observer.“We have been cheated by CCB,” said Wang Fengying, 60, a Shanxi resident who said her husband had invested 1 million yuan in the product. “Our parents are very old. We need the money for their medical bills and to buy a home for my child. We are so miserable and they won’t even let us demand our money back.”Comment
-
Re: Yes Virginia...It's a Bubble...
Occupy Wang Street!Comment
-
Re: Yes Virginia...It's a Bubble...
PBOC Vice Gov. Yi Gang: China Will Implement Deposit Insurance “Probably” This Year
Apr 10, 2014
“China will implement a deposit-insurance scheme, probably this year,” said Yi Gang, vice governor of the People’s Bank of China, speaking on a panel hosted by the Johns Hopkins School of Advanced International Studies. “That is also very important infrastructure for continued liberalization in interest rates.”
China’s central bank currently maintains a cap on the interest rate banks can pay depositors. In March, PBOC Gov. Zhou Xiaochuan said that “deposit-rate liberalization is on our agenda,” and “I personally think it’s very likely to be realized in a year or two.”
Comment
-
Re: Yes Virginia...It's a Bubble...
Massive soybean defaults loom as China buyers play hard-ball: top buyerOriginally posted by GRG55 View Post
RIZHAO, China Thu Apr 17, 2014 8:20am EDT
(Reuters) - Chinese buyers may default on a further 1.2 million metric tons (1.32 million tons) of soybeans worth about $900 million being shipped from the United States and South America, to avoid incurring huge losses in a depressed local market, the country's top soy buyer said.
The hard-line approach taken by Chinese buyers raises the possibility that more cargoes could be dumped into the market, after buyers walked away from at least 500,000 tonnes of shipments in recent weeks.
Trading firms mostly clustered in China's Shandong province have refused to make payments for about 20 shipments, Shao Guorui, general manager of Shandong Sunrise Group, said in an interview...
...Trading firms in China are battling with weak demand for soymeal. Crushers, confronted by negative margins, are also unwilling to accept cargoes at current prices.
"If they take these cargoes, some could go bankrupt. That's why they choose not to honor the contracts," Shao said.
In a sign of the pressure the sector is under, China's Dongling Grain & Oil said it expected to post a loss of 202.8 million yuan ($32.60 million)in the first quarter, versus a net profit of 8.2 million yuan previous year...
...China's soybean imports in the first quarter jumped 33.5 percent, a record for the quarter and industry sources see a rush of cargoes in the second quarter. The rise comes amid an increasing use of soybeans in financing trades to secure credit.
Traders estimate more than 10 million tonnes of soybeans, out of China's imports of 63.4 million tonnes last year, are imported for financing annually.
Sunrise, which has 5,700 employees and 27 billion yuan ($4.34 billion) in assets according to its website, launched a financial services firm in 2009, which offers small scale loans...
Comment
-
Re: Yes Virginia...It's a Bubble...
I simply do not understand: check that information against this one:
BUENOS AIRES.- El precio de la soja cerró ayer en U$S 558,06 por tonelada y alcanzó un máximo de nueve meses en la Bolsa de Chicago, luego de conocerse una nueva reducción de los stocks disponibles de la oleaginosa en el mercado norteamericano.
Los contratos más activos avanzaron hoy por tercer consecutivo al sumar 1,1% a su cotización, lo que representó una mejora de U$S 6,40 con respecto a ayer. Las posiciones menos activas, no obstante, tuvieron subas más moderadas.
Translation: Soybeans price closed yesterday at 558 dollars/ton which was the top in 9 months in Chicago Exchange after a new low in available stocks in american market was reached (sorry for shoddy translation)
Most active contracts surged today for third consecutive day by 1,1%, that is 6.4 dollars from yesterday. Less active positions had, however more moderate rises.
the information is dated apr 17. Yesterday it had slowed a bit, it was 550 dollars. Certainly futures down to 2017 are far lower (in the 400 dollars range)
Don't know how to match these news.
Maybe active traders (PoZ are you there?) can bring some light in the room.
These kind of matters are very important in our heavy sobeans exports dependant places.Mercados de Chicago y Kansas Precios de Cierre en U$S / TN lunes, 21 de abril de 2014 Trigo Maíz Soja Aceite Soja Harina Soja Chicago/1 Kansas/2 Chicago/3 Chicago/4 Chicago/5 Chicago/6 may-14 245,54 -8,5 269,70 -8,8 192,32 -2,5 550,71 -5,6 947,97 -9,0 535,38 -2,9 jul-14 248,21 -8,6 272,55 -8,5 194,38 -2,7 546,48 -5,5 953,70 -8,8 524,80 -2,1 ago-14 517,73 -4,2 950,84 -8,2 490,30 -2,9 sep-14 251,70 -8,5 275,31 -8,2 193,50 -2,7 472,53 -4,5 944,89 -6,8 456,46 -5,0 oct-14 933,64 -5,5 422,18 -6,1 nov-14 449,66 -5,7 dic-14 256,57 -8,4 279,17 -7,8 192,91 -2,7 934,74 -5,7 419,53 -6,2 ene-15 451,41 -5,8 936,29 -6,2 418,65 -5,8 mar-15 261,34 -8,2 280,27 -7,8 196,06 -2,6 452,88 -5,7 938,71 -6,2 419,31 -5,8 may-15 262,17 -9,1 277,51 -7,4 198,61 -2,3 454,07 -5,7 940,48 -7,3 419,09 -6,1 jul-15 256,66 -7,7 271,73 -5,3 200,48 -2,0 455,72 -5,7 943,12 -8,2 420,19 -6,2 ago-15 447,27 -5,7 941,36 -8,2 417,77 -5,7 sep-15 257,95 -7,6 272,09 -5,1 194,78 -1,8 437,26 -5,4 937,83 -8,2 412,26 -5,0 oct-15 930,78 -9,7 403,88 -5,6 nov-15 435,42 -5,4 dic-15 260,89 -7,7 274,57 -5,4 191,63 -2,0 931,44 -10,6 402,56 -5,4 ene-16 435,88 -5,4 mar-16 261,99 -7,6 273,93 -5,6 194,78 -1,8 may-16 261,44 -7,5 273,93 -5,6 196,45 -1,7 jul-16 248,21 -7,0 251,88 -5,1 197,04 -1,9 sep-16 191,43 -2,0 nov-16 409,15 -4,3 dic-16 187,10 -2,1 jul-17 192,61 -2,1 nov-17 399,23 -4,3 dic-17 182,47 -2,1
QUOTE=GRG55;280221]Massive soybean defaults loom as China buyers play hard-ball: top buyer
RIZHAO, China Thu Apr 17, 2014 8:20am EDT
(Reuters) - Chinese buyers may default on a further 1.2 million metric tons (1.32 million tons) of soybeans worth about $900 million being shipped from the United States and South America, to avoid incurring huge losses in a depressed local market, the country's top soy buyer said.
The hard-line approach taken by Chinese buyers raises the possibility that more cargoes could be dumped into the market, after buyers walked away from at least 500,000 tonnes of shipments in recent weeks.
Trading firms mostly clustered in China's Shandong province have refused to make payments for about 20 shipments, Shao Guorui, general manager of Shandong Sunrise Group, said in an interview...
...Trading firms in China are battling with weak demand for soymeal. Crushers, confronted by negative margins, are also unwilling to accept cargoes at current prices.
"If they take these cargoes, some could go bankrupt. That's why they choose not to honor the contracts," Shao said.
In a sign of the pressure the sector is under, China's Dongling Grain & Oil said it expected to post a loss of 202.8 million yuan ($32.60 million)in the first quarter, versus a net profit of 8.2 million yuan previous year...
...China's soybean imports in the first quarter jumped 33.5 percent, a record for the quarter and industry sources see a rush of cargoes in the second quarter. The rise comes amid an increasing use of soybeans in financing trades to secure credit.
Traders estimate more than 10 million tonnes of soybeans, out of China's imports of 63.4 million tonnes last year, are imported for financing annually.
Sunrise, which has 5,700 employees and 27 billion yuan ($4.34 billion) in assets according to its website, launched a financial services firm in 2009, which offers small scale loans...
[/QUOTE]Comment
-
Re: Yes Virginia...It's a Bubble...
Maybe active traders (PoZ are you there?) can bring some light in the room.It could be that the Chinese have shifted financing from using iron ore (which has begun to fall in price last two months) to using soybeans for loans/financing which makes it possible it keeps the soybean prices high (for a short time) despite walking away from shipments.Traders estimate more than 10 million tonnes of soybeans, out of China's imports of 63.4 million tonnes last year, are imported for financing annually.
Sunrise, which has 5,700 employees and 27 billion yuan ($4.34 billion) in assets according to its website, launched a financial services firm in 2009, which offers small scale loans...
Iron Ore Price Fears
Look what happened to iron ore and copper last year where they both fell considerably before rebounding a bit into this year but now both have continued to fall.
Soybean is obviously different because it is used for food and not the overproduction of buildings in China but if they are using soybean for financing like they did iron ore or copper it strikes me that maybe the price would begin to fall as the Chinese importers default........
Southernguy I know Uruguay depends on soybean exports so it is definitely something to continue to watch.Comment
For a concise, readable summary of iTulip concepts developed over the past 16 years and a vision of a challenging next decade and how to navigate it, read Eric Janszen's book "Post Catastrophe Economy".
Join the discussion of today's events with a wide range of professionals with an interest in economics and finance. Register to join our 50,000 plus member registered community from 78 countries today.
Subscribe to iTulip Select for access to the longest running, deep, accurate, and unvarnished macro economic trends analysis and forecasting available, since 1998.
- If this is your first visit, be sure to check out the FAQ by clicking the link above. You may have to register before you can post: click the register link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below.
Working...
Tweet
Comment