Fucked Yen : Dollar Oil Politics

[Buraku]

WATCH OUT !

If you've got investments this could be another shitty week for your stocks
The Dollar is taking some hits again on the international market, decreasing commodity = price rise

shares fucked ?



"gains in Asia may be limited after oil surged to a record above $101 a barrel, which benefits energy firms but can also spark fears about higher company operating costs and lower consumption in the region."

" Crude oil increased $0.34 to close at $101.22 per barrel for a front month contract, natural gas decreased 4 cents to $9.16 per mBtu, and gasoline futures increased 0.04 cents to close at 255.09 cents per gallon."

"The dollar tumbled to record lows against the euro and a basket of currencies on Tuesday, raising the prospect of higher Asian currencies, a negative for exporters that could see their returns eroded. "

The shit will really hit the fan once those Iranians and Hugo Chavez finally start pricing their Oil in Euros.

I'm just wondering how Japan, who already have insane gasoline prices are going to deal with this inevitable oil crisis ? How did they manage during the oil shock of the 70s ? (anybody on FG that old ?)

[Buraku]

ok, I'll be the first to admit I'm no money prophet

Market actually looks good this day, might even rise 1 and a half percent this Wednesday

but I've a feeling its all an illusion, the other signs DO NOT LOOK good.
Producer prices jumping in the States
J-Bonds see more declines
global oil prices looking fucked
employment figures
certain companies with a large fourth-quarter loss
lower production......
...
Expect a sharp fall in the next few days

[Mr Doricar]

Good for me, I'm trading CFD's and am making money from all the fuckedness

[Buraku]

Asian stocks actually did well today
but I've a feeling this is just the calm before the storm

[Jack]

Asian stocks actually did well today
but I've a feeling this is just the calm before the storm

Buraku, take a deep breath and some decaf and you'll be fine. Oil is up in US dollars, not up as much in Euros or other currencies. Same with all commodities. remember that because commodities trade in U.S. dollar their price is the reciprocal of the US dollar.

Buy Japanesde stocks like Canon, Hitachi, Kyocera and Kikkoman and Chinese stocks like China Life or China Mobile and you'll do well. Remember also to relax.

[Buraku]

In general there has been a J-gov policy of keeping the Yen artificially pegged dollar, the Chinese have also been doing the same (but made some adjustments in 05).

[Jack]

In general there has been a J-gov policy of keeping the Yen artificially pegged dollar, the Chinese have also been doing the same (but made some adjustments in 05).

I don't believe it's a government policy because the yen market is too big for a government to try to peg it. You get the impression that it is "unofficially" pegged to the U.S. dollar because of the arbitrage opportunity created by the differences in interest rates and the resulting yen carry trades (sell JPY and buy USD or put another way borrow in JPY and invest in USD). As the U.S. interest rates decline further there should be less JPY selling pressure which should help the Japan economy by lowering commodities prices due to rising yen. Since I believe the yen will rise, I'd buy J-stocks as mentioned above. Then you got to balance that against slumping exports as the value of the yen go up. If I had all the answers I wouldn't be here on this forum discussing this.

[Buraku]

Ok here's a hint for you reactionary gaijins, word out today is that factory output from JapanInc is down. The only thing that looks good is the number of ganguros buying Guicci or Otaku buying anime (consumer spending is up slightly). Predictions for S.Korea is not good, Seoul is no longer sexy and the longer term forecast for India is bad (the bubble may pop even sooner than I expected). Mazda looks like it might get fucked over today, people look to invest in other areas when the markets get jittery like this so expect a short term rush to save in property stocks but over zealousness presents a long term danger. You'll get fuckers in a rush to buy up some shitty condo and people are back into negative equity here. China might be at a standstill today, else it might climb by a fraction of a percent.
Higher US oil prices will also be a negative for Japanese, yes the United States took a kicking when those Arabs turned off the oil but J-inc took it even worse back then and was really fucked up the ass, might not be long before Chavez prices his stuff in Euros. Orinpatsu Kabushiki gaisha the guys who do optics and gave us the Olympus cam might take a nasty kicking today other Camera people like Canon Inc might get kicked. Gentlemen if the currency does not fix itself one day we could be looking at stagflation, drop anymore and exporters will be hit hardest.
A real problem for Japan is its core issues, none of them have fundamentally changed since the years of stagnation. A slowdown in the US is going to greatly influence the possibility for Japan growth because this is where the majority of Japanese trade goes.
Electronics makers will be hurt by a weakening US dollar, Matsushita will drop today. Most of us hoped those Koizumi, Abe reforms would pull through but they never did, the Japanese banks need major change !! Do not ever be lured by those bullshit Japanese internet companies, the J-answer to google etc. Safer bets will be the entertainment giants Sony, J pharmaceuticals, and quality motor giants Toyota who produce some of the best cars and low mpg.
J central bank might even cut rates this year knocking them back near zero. Buying commodities like gold ain't such a bad idea and Bonds can be seen as safer as long as you stay away from the Japan ones (now rated as junk bonds)
Isuzu may get badly smacked today and I expect the Topix to drop by one and a half.

and no this ain't a storm
when the shit really hits the fan, you will all know about it

[canman]

Now I don't claim to be an economist, or even play one on tv, but for the life of me I can't understand why oil prices are so high. And can't either the producers or the sellers, or whomever, see that they are pushing the economy into recession with the high oil prices. I know that there are other factors that are involved, but in the end, everything runs on oil. Now maybe (I doubt it) but this is the deciding factor that will push people to really try and find an alternative to oil.

[Buraku]

Blame the shift away from the metal standard in the 70s, Kennedy's years saw higher liquidity demands and then when Nixon closed the gold window to pay for war, and balance the budget. The French frogs were one of the few who could see a potential mess and refused to hold U.S. debt as monetary reserves. Then Oil replaced Gold and soon all transactions involving oil were sold in Dollars. OPEC giving an oil price in Dollars has provided huge artificial strength to our currency but today we are seeing a whole new host of problems. US debt is worse than it ever was, Japan can not survive without the United States as an export market or its much needed cheap imports of fuel, timbers, rice, grain, steel etc. The housing market sucks and little Bush has managed to fuck up the US Army and US Marines big time, we will all be funding this shit long after it ended, consumer spending stumbles in US because it is primary GDP driver. China on the other had has decided to fund the United States Mega Deficit.
The Dollar going down is bad news
Here's how they fixed that shit in the 80s, but I doubt the same stunt could be pulled off again.
The Japanese look ok for now but the banking fundamentals are still shit and Japanese have little or no resources and would be totally unable to absorb another Oil-Shock while the Iranians are soon opening a new oil exchange with all transactions in the currency Euros. Then finally we should consider the current loss of US services and loss of US manufacturing base to China and India because of the great outsourcing gimmick.

LOL everyone might take a hit on the international markets today, the Aussie stocks might take a kicking also

Poor Kangaroo shaggers

[Kuang_Grade]

Finite oil output capacity + long time gap between finding oil and then actually getting out of the ground vs ever increasing demand (esp from developing countries like China and India) gets you where we are today. As the price comes up and stay up, other sources become economic again (such as the Canadian tar sands and those low output stripper wells that were closed off when they became uneconomic to run when oil was around $40 a barrel). What new this time around is that there are simply more people on the planet who consume oil than in the past....that and the foolish efforts in the US to develop ethanol supplemented fuels has significantly raised the demand for grains/corn, which in turn has increased food costs, creating both food and oil based inflationary pressures (at least in the US). Also unlike in the past, there isn't much in the way of excess capacity (either in production or refining) to tap in case of emergency has created a very nervous market. One big port or facilities blows up and that will have an immediate world wide impact.

[GuyJean]

.. that and the foolish efforts in the US to develop ethanol supplemented fuels has significantly raised the demand for grains/corn..

Yeah, that always seemed like a karma slap in waiting to me; Let's extend the energy to grow food for cars, not people..

But you guys seriously need to take off your rose colored glasses.

GJ

[Buraku]

here's more on the dollar losing its status as the world currency

video 1
[yt]AiLxNUx8fBQ[/yt]
video 2
[yt]30BBvvzl730[/yt]

[Tsuru]

The buck is doing a record $1.5132 to the € while the Yen is relatively stable on Y160.... you're going down

That said... I'm starting to get price quotes in pounds sterling from some of our major US suppliers. Seems like they're starting to feel the pain

[nottu]

[Charles]

[quote="Tsuru"]The buck is doing a record $1.5132 to the ? while the Yen is relatively stable on Y160.... you're going down ]
And I was very happy about that, when I got paid in Euros for a recent writing gig.

[Jack]

There's 25 million cars being sold every year around the world. Some are being scrapped but in general there is a net addition of 20 million cars. At 2,500 litre of fuel per year I calculate there is 260 million barrels of oil demand every year just to fire up the increasing number of cars on the roads. Add to this the numbert of airplanes, helicopters ships and trains and you got higher demand for oil price.

However, oil is only up a lot in USD not in Euro. Oil at US$102 which is up 20% over last year is the same price in Euro as it was a year ago.

JPY is on its wayyyyyy up against the USD. I figure it can go as high as 90 JPY to the dollar in a year.

The U.S. is not slowing down. Don't believe the crap you read or hear in the news. Weak USD means increased exports to Brazil, Turkey, Indonesia, India, China... you get my drift. What Americans don't buy foreigners will because of the weak dollar keeping the factories running although Walmart and Home Depot might suffer in the domestic market.

The world is a lot bigger than the U.S. now, thanks to tyhe WTO and China's adhesion to it.

Uncle Sam, go into a recession, come on, make my day. The world wont skip a beat.

[Tsuru]

Hehehehe

[nottu]

[FG Lurker]

There's 25 million cars being sold every year around the world. Some are being scrapped but in general there is a net addition of 20 million cars. At 2,500 litre of fuel per year I calculate there is 260 million barrels of oil demand every year just to fire up the increasing number of cars on the roads.

I think your calculations are wildly inaccurate. Most cars (on a worldwide basis) do not use 50 litres of fuel per week. Only in Canada and the US is that number likely to be common but I doubt the average is that high. A lot of new cars in Europe are high-efficiency diesels too, and many of the cars that are being scrapped (worldwide) use more gas than the cars they are being replaced with.

Even if your base numbers were accurate the calculations are still wrong. One barrel of oil (~159 litres) does not equal 159 litres of gasoline. The amount of gasoline varies widely depending on the type of crude and the refining process. (Actually, even if one barrel DID equal 159 litres of gas your calculations would still be wrong. I'm not sure where you got your 260mil number from.)

Demand for oil *is* increasing, there is no debate about that. I don't think automobiles are the main problem. The appetite for oil in rapidly-industrializing countries has a much greater effect.

JPY is on its wayyyyyy up against the USD. I figure it can go as high as 90 JPY to the dollar in a year.

It's tanking again today. This is costing me $$,$$$ per month.

The U.S. is not slowing down. Don't believe the crap you read or hear in the news. Weak USD means increased exports to Brazil, Turkey, Indonesia, India, China... you get my drift. What Americans don't buy foreigners will because of the weak dollar keeping the factories running although Walmart and Home Depot might suffer in the domestic market.

The types of goods are very different though. How many GM or Ford trucks do you think are going to be exported to any of the countries you mention?

Uncle Sam, go into a recession, come on, make my day. The world wont skip a beat.

I'm quite sure the US is already in a recession but the numbers won't be clear for a while yet. A major recession in the US *will* have effects throughout the world. The US is still the largest single consumer market for goods of pretty much every type. Both Canada and Japan will be severely effected, Europe too. Growth in China and India will also slow considerably if not grind to a halt. About the only good thing that would come of it is a very large drop in the price of oil.

[Greji]

There's 25 million cars being sold every year around the world. Some are being scrapped but in general there is a net addition of 20 million cars. At 2,500 litre of fuel per year I calculate there is 260 million barrels of oil demand every year just to fire up the increasing number of cars on the roads. Add to this the numbert of airplanes, helicopters ships and trains and you got higher demand for oil price.

However, oil is only up a lot in USD not in Euro. Oil at US$102 which is up 20% over last year is the same price in Euro as it was a year ago.

JPY is on its wayyyyyy up against the USD. I figure it can go as high as 90 JPY to the dollar in a year.

The U.S. is not slowing down. Don't believe the crap you read or hear in the news. Weak USD means increased exports to Brazil, Turkey, Indonesia, India, China... you get my drift. What Americans don't buy foreigners will because of the weak dollar keeping the factories running although Walmart and Home Depot might suffer in the domestic market.

The world is a lot bigger than the U.S. now, thanks to tyhe WTO and China's adhesion to it.

Uncle Sam, go into a recession, come on, make my day. The world wont skip a beat.

I don't see the recession yet. I think a lot of the immediate market, and oil unrest is coming from nervousness over the bill that was just passed in the US House removing tax breaks an proposing taxes for major oil, with the money to be used in essence, for alternative energy development.

I don't think this has a fat chance in hell of getting through the senate and should that occur, surviving a Veto by GWB.

It does almost appear that this legislation is an election ploy to appeal to the Dem's base and environmentalists, because they can't seriously believe they can get this passed into law.

[nottu]

[Buraku]

American motors are in a way different position to Japanese, both will feel the crunch when it comes to rising oil prices but the trouble with Ford and GM is most of their profit comes from internal sales within the United States. Jack is fucking wrong about this almighty motors profit prediction (surprise ! surprise !) simply because GM sales to India Indonesia or some fucking place where people live in huts and hang off trains really won't mean shit when it comes to making real profit and keeping American workers employed, internal sales and US consumer spending is the real key. Now I liked what was coming from GM, did you see their cars ? They had some good new models ready for the soft auto market and they were finally thinking about sleeker more fuel efficient cars. However with this housing madness and the credit crunch people are also feeling the pain on luxury items, even medium sized vehicles are seeing a downturn. Ford and GM are going to be the victim of bad timing.

A huge problem for the United States is this deficit business, China has been funding US debt and the dollar has no reserves to support its value. Rising food prices and rising oil prices are going to have a hit on people's budgets in both America and Japan. Risk of nations like Venezuela or Iran pricing Oil in Euros or some other preferred currency to replace the Dollar is also high. The United States is becoming most indebted country in the world, is dependent of the credit from Middle Eastern States who despise don't really like the US and dependent on credit from America's former enemies. The next Bush gimmick a few months back was to make the US oil free by exploring the corn/seed option and soon ethanol producers were already using up 14 percent of the country's annual corn crops, after all their government subsides and tax breaks they only produced a tiny few barrels. Japan to combat this energy usage has tried going even more "green" but that's going to be pretty difficult, they already recycle a bulk of stuff, have high fuel efficiency so I can't really see Japan getting any greener unless they want to start doing something radical like trashing all of Neon signs and advertisements which consume lots of electricity.

A slowing US economy will always present big risks for the Japanese economy, Japan a nation with little or no resources which is still largely dependent cheap imports of timbers, cheap fuels, cheap foods and heavily dependent on external demand for growth, and then of course you have the usual problems. Somebody in Japan has got to reform the banks and finally kill off this shitty non-recoverable loans business.

[nottu]

[nottu]

[GuyJean]

I don't see the recession yet. I think a lot of the immediate market, and oil unrest is coming from nervousness over the bill that was just passed in the US House...

Looks like you got your excuse ready when/if the recession, in your view, does actually happen..

GJ

[FG Lurker]

Risk of nations like Venezuela or Iran pricing Oil in Euros

Iran might be able to get away with this but I doubt Venezuela could, no matter how loudly their nutter leader shouts. (He's good for entertainment value though and is one of the few world leaders who makes GWB look...well, not "good" but better than "mentally incompetent".)

The crude that comes out of Venezuela requires specialized refineries, and they export a lot of unrefined crude to the US. Venezuela produced around 2mil bbd, perhaps 2.2mil, last year. Of this 1.4mil bbd went to the US. The kicker though is of the 1.4mil bbd, about 70% of it is refined in the US at refineries that can only work with Venezuelan crude.

Yes, Venezuela could price crude in Euro and they could stop exports to the USA. This would be rather suicidal for them however as it would kill 30% of their government revenue and 50% of their export earnings. Chavez is a wacko but I don't think he is quite that stupid.

[Greji]

:rofl: Looks like you got your excuse ready when/if the recession, in your view, does actually happen..

GJ

Naah, I'll just blame on you and your fellow Dems! But like Nottu says, we ain't there yet.

I might add here that where, I wouldn't say the media is purposely berating the economy for a reason (political agenda? Sell more newspapers?), they sure seen to be having fun painting such a bleak picture.

[FG Lurker]

Nanoparticles could make hydrogen cheaper than gasoline
EETimes.com, February 25, 2008

The hydrogen economy is getting a shot in the arm from a start-up that says its nanoparticle coatings could make hydrogen easy to produce at home from distilled water, and ultimately bring the cost of hydrogen fuel cells in line with that of fossil fuels.

[...]

Boasting 1,000 times the surface area of traditional materials, the coatings can be used to retrofit existing electrolysers to increase their efficiency to 85 percent--exceeding the Department of Energy's goal for 2010 by 10 percent. The scheme holds the promise of 96 percent efficiency by the time cars powered by hydrogen fuel cells hit automobile showrooms, according to the Santa Ana, Calif., company.

(Full Story)

Very promising technology to be sure. I look forward to reading more about it and watching development progress.

I also wish that "cold fusion" was taken more seriously than it is. A lot of research has been done in the past 10 years on that and it also looks very promising.

There's hope to get away from oil yet.

[ttjereth]

http://www.eetimes.com/showArticle.jhtml?articleID=206801669
Very promising technology to be sure. I look forward to reading more about it and watching development progress.

And I look forward to people trying to make their own hydrogen at home.

KaBOOM