Energy Prices: Plateau Oil meets 125m Chinese cars - by Ambrose Evans-Pritchard

Oil is not supposed to ratchet defiantly upwards in a downturn, which is what we have with the Euro zone facing a year of contraction in 2012, and much of the Latin bloc sliding into full depression. Japan‘s economy shrank in the fourth quarter.

Asia’s emerging powers of Asia - the key force driving the commodity boom of the last decade - are in various stages of “soft-landings” after hitting the monetary brakes last year to check property bubbles and curb inflation. China’s manufacturing has been bouncing along near contraction levels through the winter. So what happens when it recovers?

The issue is not whether Iran has the military kit to close the Straits of Hormuz and cut off 18pc of global oil shipments for more than a few days (probably not), but whether an Israeli/US attack on the regime’s nuclear facilities would later set off an uncontrollable chain of events in the Middle East.

The West has the disquieting experience of watching crude soar even as we languish in stagnation. This never used to happen. If we faltered, energy costs would fall too, acting as a stabilizer. This harsh new reality is going to become uncomfortable when the emerging world enters a new cycle of growth, leaving us behind. Rising utility costs have already raised the numbers of householdsfrom Britain in poverty from a fifth to a quarter.


For more: Plateau Oil meets 125m Chinese cars - Telegraph

Wall Street: "2008 crash deja vu: We’ll relive it, and soon" - by Paul B. Farrell

Warning, the stars are aligning, again. Much faster. We’re repeating the run-up to the 2008 meltdown, leading up to the next election. Yes, another crash is coming, unavoidable, just like 2008. Not because the US totally dysfunctional government is collapsing into anarchy, thanks to the 261,000 Super-Rich Lobbyists. Not just because our monetary system is run by the Bernanke Printing Press Company. And not just because a soulless conspiracy of Wall Street CEOs cares nothing for democracy and the public interest, only for their stockholders and their year-end bonuses.

Another crash is coming soon because we’re back playing the same speculative games as we did for years prior to the 2008 crash. When we collapse, it will be because America’s leaders never learn the lessons of history. Never. In a BusinessWeek editorial, Peter Coy and Rouben Farzad described the bubbles:“It’s as if 2008 never happened. Once again the worlds investors are pumping up bubbles that will probably explode in their faces. After the popping of a real estate bubble led to the first global recession since the 1930s, world markets are frothing like shaken Champagne. Pundits claim to have spotted price increases that are unsupported by economic fundamentals in assets ranging from U.S. farmland to Israeli biotech to Australian housing to Chinese cemetery sites. Commodities have soared. Global junk-bond issuance hit a record in the first three months of the year … this is the granddaddy of them all, an almost-encompassing bubble right at the heart of monetary systems.”

Yes, the “granddaddy of all bubbles” will explode right in US Fed Chairman Ben Bernanke’s face, a bubble that will then sink like a stiletto deep into the “heart of the monetary systems” across the world, proving something Nassim Taleb said about Bernanke when Obama reappointed him in 2009, “he doesn’t even know he doesn’t understand how things work,” and that his methods make “homeopath and alternative healers look empirical and scientific.”

Folks, there’s really nothing you can do to stop the inevitable crash that is coming possibly just before the presidential election in 2012.

Historical cycles have led to the inevitable collapse of all economic systems for 800 years, say economists Carmen Reinhart and Ken Rogoff in their classic, “This Time It’s Different: Eight Centuries of Financial Folly.”The facts of history are irrefutable, inevitable and brutal. And nothing can change the trajectory of the cycle. In fact, the end can accelerate fast, in decades, says Niall Ferguson, author of “Ascent of Money: A Financial History of the World” and “Colossus: The Rise and Fall of The American Empire:”

Note EU-Digest: what no-one at Wall Street is talking about is that as the dollar deteriorates in value so will stock quoted and sold in dollars.  Eventually this will only increase the acceleration of the collapse of the economic system. Fortunately the outcome of this scenario is not totally negative. It will certainly end market mechanisms as we know them today; the era of "monopoly paper transaction" at "casino stock markets" around the world will dwindle, and be replaced by a system which defines wealth in more tangible terms, including those based on natural resources, alternative energy resources, water, metals and real estate.

For the complete report by Paul B.Farell in Market watch click on this link : 2008 crash deja vu: We’ll relive it, and soon.

Charlemagne: Europe's dark secret ?

When history comes to write the tale of the euro-zone crisis, the chief villains, if Europe’s leaders have any say, will be not dissembling Greeks or dithering Germans, but the financial markets. Traders subjected Greece to “psychological terror”, declared George Papandreou, its prime minister. They were “making money on the back of the unhappiness of the people”, lamented Michel Barnier, the European commissioner for the single market. The crisis was blamed on wolf-pack markets (Anders Borg, Sweden’s finance minister), cynical hedge funds, cocky credit-ratings agencies, neoconservative capitalism (José Luis Rodríguez Zapatero,

Spain’s prime minister), a duplicitous Anglo-Saxon press (Mr Zapatero again), and other wicked forces still.
Not all Europeans demonise the market. Ex-communist Europe, which only recently threw off the command economy, is less hostile. So are the Germans, with their small-business Mittelstand and consensual labour relations. Elsewhere, though, market-aversion seems to go deeper than mere disapproval of extravagant stock options or bonuses (which is common to market-friendly Britain and America too). Fully 29% of Spaniards and Italians, and 43% of the French, told a global poll last October that free-market capitalism was “fatally flawed”. Only 13% of Americans shared that view.

At best, too much meddling in markets will condemn Europe to gentle decline. At worst, it will undermine the capitalist enterprises on which its prosperity and social model depend. A few years ago, an ambitious centre-right French politician seemed to agree. “For 25 years, France has never stopped discouraging initiative and punishing success,” he said. “Preventing the most dynamic from getting rich has by consequence impoverished all the others.” His name? Nicolas Sarkozy
.

Note EU-Digest: a most bias report by the Economist, obviously inspired by its friends in the Anglo Saxon "conservative" financial community who are very much opposed to the legislation initiated by the EU and the Obama administration to curb the free wheeling ways of the global financial community. What happened in 2008 to the worlds economic structure as a result of deregulation and greed must never happen again.

Charlemagne: Europe's dark secret | The Economist

US Economy - Housing, Banks and Global Credit: The Next Leg Down Awaits

The next leg down for riskier assets is now upon us and investors should prepare themselves for further, significant declines going forward. Global equities markets will continue to descend toward their 2009 lows, as the global economy almost certainly faces a severe contraction in the coming months.

For more: Housing, Banks and Global Credit: The Next Leg Down Awaits -- Seeking Alpha

DAVOS: The Coming Default Tsunami Grabs Power From Banking Industry - Europe not out of the woods

This year's World Economic Forum in Davos marks a clear shift in the global power structure. "Bankers Are On Run", headlined the Wall Street Journal in its weekend edition, describing an atmosphere of, quote, "First, kill all the bankers." Its ramblings went on to forecast the worst is yet to come, elaborating on a bet that even Goldman Sachs CEO Lloyd Blankfein would be out of his job within 2 years. Witness the biggest shift in editorial sentiment ever seen when the WSJ starts comparing bankers to terrorists,

What Davos failed to address is the necessary new regulatory shape for an industry gone too wild with the utmost help from central bankers that now ends up on the wrong side of all trades. Minefields of OTC derivatives and "asset" positions saddled with high default rates need yet to be cleared as the next financial Tsunami gains speed. Seeing all asset bubbles from the FIRE (finance, insurance, real estate) economy deflate at different speeds, now again engulfing stock markets, banks worldwide have an 800-pund gorilla in their vaults that may run amok in 2010.
I am talking government bonds where prices and resulting yields will no longer be derived from ratings and macroeconomic outlooks but from market reactions to the coming flabbergasting revelations how bad the economic outlook for the Western world really is.

"As I have not yet come across the example of a major economy that really shows a will to at least consolidate its budget deficits I stay with my opinion that hyperinflation is on the way as was always the case after bubbles built on debt. Hyperinflation, the inevitable end of all fiat currencies in history, will ironically have one positive effect. According to Austrian historian Eugen Maria Schulak, co-author of a recently published (German language) book on the Austrian School of Economics, no rulers have ever survived hyperinflation, leading to many radical political changes."

For more: The Coming Default Tsunami Grabs Power From Banking Industry | Benzinga.com

Truthdig - World Economy - It’s Not Going to Be OK - by Chris Hedges

For the complete report from Truthdig click on this link

World Economy - It’s Not Going to Be OK - by Chris Hedges

The daily bleeding of thousands of jobs will soon turn our economic crisis into a political crisis. The street protests, strikes and riots that have rattled France, Turkey, Greece, Ukraine, Russia, Latvia, Lithuania, Bulgaria and Iceland will also descend on other nations including the US. It is only a matter of time. And not much time. When things start to go sour, when Barack Obama is exposed as a mortal waving a sword at a tidal wave, the United States could plunge into a long period of precarious social instability. Our profligate consumption is finished. Our children will never have the standard of living we had. How will we cope with our decline? Will we cling to the absurd dreams of a superpower and a glorious tomorrow or will we responsibly face our stark new limitations? Will we heed those who are sober and rational, those who speak of a new simplicity and humility, or will we follow the demagogues and charlatans."

Sheldon Wolin (86), who received his Harvard University doctorate for a dissertation titled Conservatism and Constitutionalism: A Study in English Constitutional Ideas, 1760-1785 and who taught political philosophy at the University of California in Berkeley and at Princeton says: “The basic systems are going to stay in place; they are too powerful to be challenged. This is shown by the financial bailout. It does not bother with the structure at all. I don’t think Obama can take on the kind of military establishment the US has developed. This is not to say that I do not admire him. He is probably the most intelligent president the US has had in decades. I think he is well meaning, but he inherits a system of constraints that make it very difficult to take on these major power configurations. I do not think he has the appetite for it in any ideological sense. The corporate structure is not going to be challenged. There has not been a word from him that would suggest an attempt to rethink the American Imperium.”

EU-Digest: EU takes historic step and seizes the initiative for the construction of a new and fair world economic order

For more reports related to Europe click on this link

EU takes historic step and seizes the initiative for the construction of a new and fair world economic order

This Thursday, the 27 member European Union leaders will call for a supervising body to oversee the world's 30 largest financial companies, among other sweeping changes to the global economic order. This was disclosed today as the EU political leadership began a two-day meeting to consider further steps to tame the global financial crisis, and will agree to expand a rapid action plan the U.K. and 15 euro-zone countries drew up Sunday to other countries in the bloc.

With the U.S. temporarily hobbled by the approaching election, the majority of E.U. politicians see a once-in-a-generation opportunity to seize the initiative, and play a major role in the construction of a badly needed new and fair economic order. Drawing heavily on proposals made earlier in the week by U.K. Prime Minister Gordon Brown, the leaders will call for the overhaul of the Bretton Woods system, an outdated US designed global financial framework which has existed since 1944.

The Europeans want to hold a meeting of leaders from around the globe to get the process underway after the U.S. presidential election. "I've proposed an international summit by the end of the year, preferably in New York, where all these problems started," French President Nicolas Sarkozy said in his opening address to the meeting. France holds the rotating presidency of the EU for the six months ending December, and Sarkozy is chairing the meeting of leaders. Sarkozy added that he wants to see financial supervision extended to hedge funds, and to eliminate offshore financial centers.

Long derided for its lack of maneuverability, the E.U. has surprised observers by responding decisively and coherently to the sharp declines in share prices that accompanied rising fears about the viability of the bloc's banking system in recent weeks.