The Peanut Gallery

Statements, comments and forecasts that have no substance, but just might turn out to be relevant.

1. The price of copper has dropped 30 percent since early August, reaching a 14-month low. Because businesses in China have been using copper as a financing tool to bypass the tightening of credit markets, the repercussions on the Chinese economy of a sustained drop in the copper price could be widespread. Because of loan restrictions by Chinese banks, Chinese companies have been taking cheap loans (this is allowed) to purchase massive amounts of copper on the world markets, storing it in warehouses and using it as collateral (80%) for credit to invest in other sectors. PG: This could be serious. Apparently all copper purchases out of China in the last 3 months were for this purpose.

2.Think about this.There are 1.3 billion muslims on the planet. About 20% of world population. They are gripped by civil wars, revolutions and terrorism. While this is happening, world equity markets have hardly blinked. No contagion. Greece (Pop. 11mil) wobbles, Europe gasps and world markets panic. PG conclusion: The world muslim populations contribute about zero to world productivity. Interesting how the far left and Islamic extremists have formed a coalition. Some would say that opposite parasites attract.

3.FT: The Rhodium Group, an economic consultancy, predicts Chinese groups will invest up to $1,000bn in overseas acquisitions over the next decade, with a big slice of this investment heading to Europe. Figures from Dealogic show the taste for Europe is already developing rapidly – with Europe accounting for a full 30 per cent of Chinese overseas m&a in the year to date, up from just 6 per cent for the same period last year. PG: The Chinese are using good economic and political sense, buying on the weakness.

4. The world's decline in fertilility has been staggering. In 1970 the total fertilility rate was 4.45 per family. It is now 2.45 worldwide and lower in some surprising places. Bangladesh's rate is 2.16 having halved in 20 years. Iran's fertility fell from 7 in 1984 to just 1.9 in 2006. Countries with below-replacement fertility include Brazil, Tunisia and Thailand.

5.The average life expectancy in the US in 1935 was 61. So FDR set the retirement age four years above the average life expectancy. So much for compassion. He (they) assumed you would work into what was for them advanced old age. Today life expectancy is 79 and within a few decades is estimated to be 90. Under today's laws one could retire at 62 or 65 or 67 and, if you just lived an average lifespan, get far more in benefits than you paid in. Remember, 90 will just be the average. So when someone suggests that the retirement age should be raised to (gasp!) 70 in a few decades, just smile and think back to what FDR would do.

6.Fun fact: In most of Mexico, one does not need a driving test to get a drivers licence. The Economist writes "Six out of ten road deaths worldwide take place in 12 countries, one of which is Mexico".

7.A closer look at the Chinese economy reveals that an astonishingly large part of what is going on today is investment in urban residential real estate, which is growing at more than 25% a year. This looks a lot like a real-estate bubble --with Chinese characteristics. As for debt problems, Chinese bank loans were 97% of GDP in 2008. Today they're at 120%. All of which makes us wonder if China's recent gloating at US misfortunes might just prove a tad premature. Niall Ferguson, Newsweek.

8. The Shanghai Exchange peaked at 5900 in Oct of 2008. Today it is at 2450, a fall of 58%. In comparison The Dow is down 13% over the same time period. The difference being that China has $3 trillion in reserves, while the US owes over $14 trillion, and can print and devalue its currency, almost at will. PG: Clearly this is an unannounced (US) policy decision which might eventually backfire since a country's economic strength is measured by the strength of its currency. In 2006 China's holdings of US treasuries  were 70% of its reserves.
Today it stands at 43%. Follow the money.

9.The Beijing Power and Desalination Plant is a 26-billion-renminbi technical marvel: an ultrahigh-temperature, coal-fired generator with state-of-the-art pollution controls, mated to advanced Israeli equipment that uses its leftover heat to distill seawater into fresh water. The desalted water costs twice as much to produce as it sells for. Nevertheless the government is moving to quadruple the plant's desalinating capacity, making it China's largest. In some places, this would be economic lunacy. In China it is economic strategy. As it did with solar panels and wind turbines, the government has set its mind on becoming a force in yet another budding environment-related industry: supplying the world with fresh water.

10. Of the billions of dollars in cash that the U.S. shipped to Iraq during the war, "hundreds of millions if not billions of dollars . . . was stolen by senior Iraqi officials for their own personal gain," the Special Inspector General for Iraq reconstruction tells CNBC. That chunk of cash, a subset of the tens of billions the New York Fed has sent overall, became controversial over the summer because neither the New York Fed nor the Iraqi government would provide enough information to document what happened to it. PG: About par for the course in a corrupt region.

Nobody gets to live life backwards. That is where your future lies. - Ann Landers

Israel - The Miracle Continues...

 

1.Elbit Systems sets up joint venture with Brazil’s Embraer

Elbit Systems president and CEO of Joseph Ackerman said, "The establishment of this jointly-owned company is a significant step for Elbit Systems and AEL, marking another milestone in our long-term operations in Brazil, a market which we consider of the utmost importance.

2.Israels foreign currency reserves edge up to record $78b

Israel's foreign currency reserves reached an all-time high of $78.08 billion at the end of August, $135 million more than a month earlier, the Bank of Israel announced today. To compare, Iran has $75b, Canada $64b, Australia $41b and Turkey $97b.

3.S&P upgrades Israel to A+

Standard & Poor's has upgraded Israel's long-term foreign-currency sovereign rating from A to A+ with a "Stable" outlook, four steps below AAA. S&P also reaffirmed Israel's local currency rating at AA-. S&P said, "The rating action reflects our view of Israel's improved economic policy flexibility as a result of strong growth and careful macroeconomic management… Israel is on a credible path toward continued government debt burden reduction and stronger external indicators." Read more http://www.globes.co.il/serveen/globes/docview.asp?did=1000681132&fid=1725

4.Israel, Germany to save Lake Victoria

Israel and Germany on Monday signed a joint letter of intent for a first of its kind joint cooperation effort, with the goal of saving Lake Victoria in Kenya. Lake Victoria is the largest lake in Africa and the second largest in the world and is being threatened by a severe ecological disaster. Half of the fish species in the huge lake have already become extinct. About 30 million people make their living from the seaweed filled lake that has low oxygen levels. Lake Victoria is one of the sources of the Nile, which is also suffering from the lake's ecological disaster.

5.Forty Turkish companies eye Israeli

technologies

At least 40 Turkish companies have expressed interest in the new media technologies developed by Israeli companies currently being presented at the IBC Conference in Amsterdam. Israel Export Institute CEO Avi Hefetz said, "Watching the business conduct between Israeli companies and Turkish companies interested in their products, you would never believe that there is a diplomatic crisis between the two countries. People know how to make a distinction between the diplomatic crisis and business matters."

6.IEC to build $1.3b Chinese solar energy

project

Israel Electric Corporation (IEC) (TASE: ELEC.B22) will build a $1.3 billion project of three photovoltaic solar energy arrays in northern China. IEC's board of directors approved the project, the utility's first investment in China, at its last meeting. As the project's chief contractor, IEC will not invest equity in the project. The project is also IEC's first investment in a solar energy project, and it is the utility's largest foreign project to date.

A single idea can transform a life, a business, a nation, a world - Breakthroughs

The Peanut Gallery

Statements, comments and forecasts that have no substance, but just might turn out to be relevant.

1.Its Europe, Greece and Europe. Thats all we hear in the marketplace these days. How about this for a REAL reason for a crisis? CNBC: China Warns of Trade War if U.S. Bill on Yuan Passes. An angry China warned Washington on Tuesday that passage of a bill aimed at forcing Beijing to let its currency rise could lead to a trade war between the world's top two economies. PG: Really not the time or place. The height of stupidity. Probably worse than the timing of Obama's Health Plan and a good reason to run for the stock market bomb shelters.... www.cnbc.com/id/44766724

2.A trade war might be the height of stupidity, but US pressure to revalue the Chinese currency is the height of hypocrisy. For at least four decades The US has systematically been borrowing from China and other countries and repaying that debt with devalued dollars. Now that the borrowing has ballooned out of control, they want to repay the debt with even cheaper dollars.....What a scam!

3.Honest Reporting Canada: In comments eerily reminiscent of Libby Davies of the NDP and Helen Thomas, formerly of Hearst News Service, Linda Sobeh Ali, the Charge D'Affaires for the Palestinian General Delegation to Canada, claimed in an interview on CBC Radio's "The Current" news program yesterday that Israel has been occupying territories since 1948, the year Israel declared its independence. In doing so, Ms. Sobeh Ali has essentially claimed that Israel has no right to exist. PG: This is continued confirmation that there never was a two-state option on the table.

4.The distance between arrogance and comeuppance sometimes can be rather short. Turkey's so-called economic boom was financed by massive short term loans, to the point where bank credit has ballooned out of control and the budget deficit is more than 10% of GDP. This credit bubble was used to finance the consumption party leading to Erdogan's recent election victory. PG: Even Advil will not fix this hangover. We are unashamed to admit that we will enjoy watching this one.

5.There is an old saying that it is easy to start a war, not so easy to finish it and it never goes as planned. The Cypriot government has to decided to search for gas in the Mediterranean, joint venturing with companies operating out of Israel. This prompted a threat from Turkey to use military force to prevent this. PG: This drop in the ocean could easily turn into a tsunami. Already Moscow has sent submarines in solidarity with Cyprus.

6.Iranian Pastor Yousef Nadarkhani is currently on trial in Rasht, Iran. He has appeared in court three times this week and each time has refused to renounce his faith when asked to do so by the court. If he does not recant his Christian faith, he could be executed at any time (on or after Thursday, September 29). The 11th branch of Iran's Gilan Provincial Court has determined that Nadarkhani has Islamic ancestry and therefore must recant his faith in Jesus Christ. PG: The far left, for all their intelligence, still haven't worked it out. Whatever their beliefs, they are still infidels as far as Islam is concerned.

7.NY Mayor Bloomberg on Immigration and a border fence: "Bottom line, Perry is right and Romney is wrong." Perry is in favour of integrating illegals into the system, and states categorically that a fence is is not a viable solution to prevent illegal immigration. PG: Totally agree with Perry. Ask the Israeli's about fences in the Sinai and Rafiah (never mind Arizona and Texas). Obviously many Americans prefer to delude themselves judging by some of the reactions.

8. In a blunt assessment made as he was traveling to Israel, Defense Secretary Leon Panetta warned Sunday that Israel is becoming increasingly isolated in the Middle East, and said Israeli leaders must restart negotiations with the Palestinians and work to restore relations with Egypt and Turkey. PG: Try this for "blunt", Mr. Panetta. When you were head of the CIA, your organization advised Obama NOT to throw Mubarak under the bus. Further, you are well aware that the palestinians have no intentention of honouring a 2 state solution with Israel. That this is just another political tactic to weaken the Jewish state. Even the lowly echelons at the CIA are aware of this. Welcome to politics....

You cannot help men permanently by doing for them what they could and should do for themselves - Abraham Lincoln