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NYMEX crude oil prices rise above $73 on USD fall, Nigeria attacks

Low Ee Mien — Tue, 30 Jun 2009 04:30:35 -0700

NYMEX crude oil prices rose to the highest in 8 months, set for its biggest quarterly gain since 1990, as the US dollar declined and militant attacks in Nigeria raised concern that supplies may be disrupted. Shell shut a field after an attack by Nigerian rebels, disrupting supply from Africa's largest producer. The rebel group MEND said it attacked the oil field near Shell's Forcados oil export terminal and set it ablaze.

Oil prices jumped as much as 2.6% in New York as investors sought commodities as a hedge against inflation. Crude oil prices for Aug 2009 delivery rose to $73.38 per barrel. Oil has risen 64% since the beginning of 2009, rebounding from $32.40 on optimism that the global economic recession is easing. China raised domestic fuel prices today by as much as 11% to encourage refiners to produce more fuels amid higher crude costs. Meanwhile, live gold prices rose to $941.42 per ounce, gaining for a third quarter. Copper headed for its best 6 months in 22 years.

- Some people have been talking about the S&P 500's Golden Cross, but relatively fewer people have been talking about crude oil's own Golden Cross : the point on the chart where the 50-dma does a crossover above the 200-dma moving average line. I've mentioned it before back in Mar 2009. If crude oil prices continue on the present trajectory it looks like we are all set to go. For the short term, it would be bullish if oil prices could maintain $70 and continue to aim for $75. $100 oil remains a hurdle at this point, but do keep an eye out for that in the longer term.

Singapore electricity rate to go up 6.93% from July 2009

Low Ee Mien — Tue, 30 Jun 2009 00:40:23 -0700

This article belongs to the Singapore inflation watch story arc.

channelnewsasia.com :

After two quarters of downward adjustments, Singapore household electricity tariffs will go up by 6.93% or 1.25 cents per kWh from 1 Jul 2009 to 30 Sep 2009. Electricity supplier SP Services said the increase is due largely to higher average fuel oil prices from April to June, which hit S$76.24 per barrel, up 26% from the previous quarter. The tariff is calculated based on a new formula which kicks in next month, under which Singapore electricity rates for the next quarter will be based on the average fuel oil prices in the preceding three months instead of the prices in the first month of the previous quarter.

- You know, I haven't even heard of this slightly wacky first-month-of-previous-quarter formula to determine Singapore electricity rates until relatively recently. For years I had been assuming that they were using some form of 3-month moving average, or 90-dma, of fuel oil prices, which being the refined product would tend to be linked to and slightly higher than crude oil prices. After all that would just have been common sense. Guess it took quite a few years for the implementation to catch up with the common sense.

But let's see what might happen if we were to take common sense to its logical conclusion, given the following factors, that :

a. Singapore electricity prices are determined by natural gas prices, since :
b. natural gas is currently used for 80% of Singapore's electricity production
c. natural gas prices are related by formula to fuel oil prices
d. fuel oil prices are naturally related, as a refined product, to crude oil prices.

Hence, logic dictates that electricity prices should be linked in real-time to live oil prices and that is exactly the direction that we seem to be heading. Now, as a peakoiler, part-time crude oil trader and general observer, I am rather used to crude oil's stomach-churning volatility, ranging from the record-breaking highs of $147.27 back in July 2008 down to the lows of $32.40 in Dec 2008 and now more than doubling back up again to the $70 range barely 6 months later. It would be interesting to see how society reacts when the price signal of electrity rates moves from the current leisurely 3-monthly rate to the more rapid 30-minute pace that is being proposed. Those who are watching crude oil prices on a second-by-second basis (you know who you are) would probably shrug and think nothing of it, but to everyone else it could seem like some kind of roller-coaster ride.

Of course, the pro-market people would say that this is a very fair and market-driven price mechanism, and I would have to tend to agree with them. But I would like to see how the government explains to the good common folk, the non-crude-oil-trading citizens, exactly how speeding up their lives by 4320 times (do the math) would help us all in the long run. I'm all ears.

GM Chevrolet Volt test drive ahead of schedule

Low Ee Mien — Sat, 27 Jun 2009 05:36:58 -0700

bloomberg.com :

General Motors, racing to emerge from bankruptcy, said it has conducted the first pre-production Chevrolet Volt test drive on 23 Jun 2009, more than a week ahead of schedule. New vehicles reach the pre-production stage once the parts and design are largely complete. The Volt is due in showrooms in November 2010. Vice Chairman Bob Lutz said the Volt will cost about $40,000.

The Chevrolet Volt is GM's most visible effort to offer a more fuel-efficient lineup to meet new US regulations. GM is counting on the sedan to compete against the Toyota Prius hybrid. The Chevrolet Volt plug-in hybrid is designed to drive 40 miles (64.5 kilometers) solely on battery power. After 40 miles, an on-board gasoline engine keeps the battery charged, or the car can be plugged in overnight into a household outlet.

- With crude oil prices on the move (live oil prices are currently flirting with the $70 level), this is a pretty good time for GM to make this announcement. Also, it *is* rare to hear of a technological product, especially one as complex as the Chevrolet Volt must be, to be actually ahead of schedule. All the more so, in the ongoing race to determine the next generation of cleaner and greener vehicles on America's roads, with the other contenders being the new upcoming electric cars from Nissan and Renault, as well as the next generation of improved hybrid cars from Toyota and Honda.

Tesla Model S electric car gets $465 million federal funding from Obama Administration

Low Ee Mien — Wed, 24 Jun 2009 21:56:25 -0700

wired.com :

The Obama Administration will lend Tesla Motors $465 million to build an electric car and the batteries to propel it. It's one of three loans totaling almost $8 billion that the Department of Energy has awarded to spur the development of fuel-efficient vehicles. Ford gets $5.9 billion to retool 11 factories in 5 states. Nissan will receive $1.6 billion to refurbish a factory in Tennessee to produce electric cars. The Obama Administration has announced that it is raising average fuel-efficiency standards from 27.5 miles per gallon to 35 miles per gallon by 2016.

Tesla CEO Elon Musk said the Tesla Model S could share components with Mercedes sedans now that Daimler has taken a 10% stake in Tesla to develop the Smart EV. Musk said Daimler's investment in Tesla coupled with the federal loan and revenue from the Tesla Roadster leaves the company "in pretty good shape" financially, and the Tesla Model S could be on the road by end-2011. Ford said it will have an EV by 2011. Nissan plans to put an electric car in showrooms next year, with its Tennessee factory employing 1,300 people and building 50,000 to 100,000 cars at full production.

- And to think that some of us were concerned about Tesla's finances not that long ago. Good to see the Obama Administration do something better, for a change. Better to throw $400 million at an electric car maker who will bring forward the state of the art in automotive technology than to throw $400 billion at those financial black holes who call themselves banks. Looking forward to the next generation of plug-in hybrids and electric vehicles.

Synthetic trees aim to capture CO2 from the air

Low Ee Mien — Tue, 23 Jun 2009 22:21:44 -0700

edition.cnn.com :

Scientists in the US are developing synthetic trees capable of collecting carbon around 1,000 times faster than the real thing. As the wind blows though plastic "leaves," the carbon is trapped in a chamber, compressed and stored as liquid carbon dioxide. The technology is similar to the carbon capture methods at coal power plants, however the "synthetic tree" can catch carbon anywhere. Professor Klaus Lackner of Columbia University says it is highly efficient for its size compared to a wind turbine. Lackner and his colleagues have developed a sorbent that uses a relatively small amount of energy to release the CO2 and is not prohibitively expensive.

Lackner's colleague Professor Wally Broecker says most people still don't recognize the magnitude of the task the world faces in reducing global carbon emissions, and it was likely that one day urgent action would need to be taken. "Each unit would take out a ton of CO2 a day - which would be the amount of CO2 produced by 20 average automobiles in the U.S.A. And the cost of each unit would be about the cost of a Toyota."

- Amongst the various CO2 capture techniques that have been proposed, this looks like an interesting approach. Whether it scales or not (or if it gets Richard Branson's stamp of approval) will have to be seen, particularly regarding the issue of carbon storage. I'm a little leery about the CO2 storage part however, whether in liquid form or whatever it may be. It would make more sense if some economic use could be found for it, for example as CO2 injections to increase oil well pressure with the tertiary oil recovery method. With that, we're back to the old "find the nearest oil field" game once again.

Virgin CEO Richard Branson was talking about scrubbing a billion tons of carbon dioxide a year. A billion tons. Compared to that, the scale of nuclear waste, especially with reprocessing, looks positively miniscule, which is great, except for the political posturing part. Well, it's time to look past political posturing. The world needs all the solutions it can get, whether it's a transition to an electric car fleet, renewable energy, nuclear energy, carbon capture and storage. Anything and everything that can work, we've got to look into it.

Nissan snubs hybrids, to build over 100000 electric cars per year from 2012

Low Ee Mien — Tue, 23 Jun 2009 05:53:13 -0700

reuters.com :

Nissan has sought to knock down the hybrid hype. "We do not put electric cars and hybrids in the same category," Nissan CEO Ghosn told shareholders. "Hybrids are fuel-efficient technology. EV's are no fuel. Hybrids are an optimisation of combustion engines. EV's have none. Hybrids reduce emissions by 20-30%. EV's have none."

Ghosn stressed that Nissan and Renault were the only carmakers with a mass-volume EV strategy to date, saying he was optimistic that they would proliferate with crude oil prices at $67 a barrel even in a global recession. Nissan and Renault are due to launch 3 electric cars each by 2012. Nissan will build more than 100,000 electric vehicles a year when it starts US production of the zero-emission vehicles at its Smyrna, Tennessee plant in 2-3 years.

- One has to be careful about taking Nissan's statements at face value. The point being, Nissan has completely missed two, and now coming to three entire generations of hybrid car technology and is now trying to play catch-up to its larger rivals Toyota and Honda. Nissan is a little late to that particular game, some 10-15 years after the two pioneering car-makers initiated their hybrid programs, hence it is no wonder that Nissan is pooh-poohing hybrid vehicles.

On the other hand, it will be interesting to see how the battle for the next-generation of green vehicles shapes up. Of course, at the higher end of the market there are models such as the Tesla Roadster and the Tesla Model S, but if we are talking about family cars that ordinary people would actually buy, we would be talking about the mass production models. In this mass market segment, it is starting to look like a three-way race between the likes of Toyota and Honda with their solidly practical though evolutionary subsequent iterations of their hybrid car models, Nissan and Renault with their electric car designs, and GM-Chevrolet, if they still feel up to the task, with their Chevrolet Volt plug-in hybrid.

Flickr down with broken image links

Low Ee Mien — Mon, 22 Jun 2009 06:20:40 -0700

Apparently Flickr is down. At least for me.
I'm getting broken image links where all the photos used to be.

Not sure if it's an isolated case or if the issue is on my ISP side.

I'm using Google Picasaweb to host the screenshot.
I've been switching to Picasaweb nowadays, anyway.

Update : It's back up again.

NYMEX crude oil prices fall below $70 on gasoline market sentiment

Low Ee Mien — Mon, 22 Jun 2009 03:47:34 -0700

reuters.com :

Crude oil prices fell below $70 per barrel on Monday [22 Jun 2009], extending the previous session's drop of more than 2%, as bearish sentiment over gasoline markets in the US continued to dominate investors' concerns. NYMEX crude oil futures for July 2009 delivery fell 2.5% on Friday, dragged down by the gasoline market as dealers bet on ample supply to meet demand from summer vacationers.

Analysts said ongoing attacks of oil facilities in Nigeria by militant groups may help lift oil prices in the short term. Nigeria's main militant group said it had attacked 3 oil installations belonging to Shell. In China, data showed oil demand rose 6% in May over a year ago, its fastest growth since August 2008, as oil firms produced at record rates on a recovering economy and buyers stocked up ahead of an official fuel price hike.

- Today, oil prices might have dropped below $70, but to put things into perspective, let's not forget that they were $10 per barrel back in 1999. Hardly cheap oil, by any stretch of the imagination. That particular era of cheap oil is over, especially with the peaking of light sweet crude oil back in May 2005.

As far as technical analysis goes, the 50/200-dma crossover that I talked about earlier is on track, and in fact the 50-dma line has just crossed over the 200-dma. Cycle indicators including stochastics are in overbought territory however - it's a bit tough to keep up a continuous streak of almost 2 months in the red-hot zone above 80. I'd be watching for a pullback to the $60 level to see if it acts as a support, having served as a highly-anticipated resistance level the month before. In the meantime, watch the oil price live as the action unfolds.

2010 Mitsubishi i-MiEV electric car to be more affordable, plug-in hybrid planned

Low Ee Mien — Mon, 22 Jun 2009 03:20:50 -0700

Mitsubishi, the maker of the Mitsubishi i-MiEV electric car, plans to cut the vehicle's purchase price by more than half to less than 2 million yen ($21,000) as government incentives and tighter emission rules boost demand for fuel-efficient cars. Mitsubishi is unveiling its electric cars ahead of plans by larger rivals Toyota and Nissan to introduce similar vehicles by 2012. Mitsubishi also plans to sell a plug-in hybrid version of the Mitsubishi i-MiEV in 2013.

Nissan has said it plans to introduce electric cars in Japan and the US in 2010 and mass-produce them globally in 2012. Toyota, the world's largest maker of gasoline-electric hybrid cars, is also developing electric cars for sale in 2012. Prime Minister Taro Aso is giving fuel-efficient car buyers subsidies and tax breaks for new vehicles to spur sales as part of a 15.4 trillion yen economic stimulus program.

- So far, most of the major Japanese car manufacturers are on track with their electric car plans. We've got Toyota, Nissan, Mazda and now Mitsubishi about to launch electric vehicles pretty soon, with most of the models looking like they are conservative small-car variants. Honda seems to be taking an even more conservative approach with an electric motorcycle planned for 2010, which means that they are technically still in the EV game after all.

I'll be waiting for results from the upcoming Singapore electric car study to see what they are going to be recommending for implementation over here. A few years of plug-in hybrid vehicles with a gradual transition to an electric vehicle fleet, perhaps with V2G (Vehicle-to-Grid) and all that. And there's the diesel-powered commercial fleet which is more sensitive to costs compared to the typical Singaporean car owner who changes cars every 3 or 4 years. For myself, the 2010 Honda Civic Hybrid remains the natural successor to the current car.

Japan GDP contracted record 14.2% in Q1 2009 on exports fall

Low Ee Mien — Tue, 16 Jun 2009 08:26:02 -0700

bloomberg.com :

Japan's GDP shrank at a record 14.2% annual pace in Q1 2009, the worst contraction since the government began keeping records in 1955. Demand from China's $586 billion stimulus is helping to stabilize exports. Japanese Prime Minister Taro Aso's record stimulus spending has led to rising consumer confidence; sales of electronics are up 20% since the government introduced a program to buying of eco-friendly products. Tax breaks on energy-efficient vehicles have helped Honda post higher sales.

Still, manufacturers are only using about half their productive capacity because of the collapse in global demand. Exports have fallen by more than a third from last year and managers are under pressure to cut jobs and delay investments, which could cause the economy to start shrinking again as the effects of the stimulus wanes.

- Like Jim Puplava says on his show, "less bad is the new good". The GDP figures are every bit as horrible as the contrarian community said they would be. Countries are beginning to hit the 10% GDP contraction figure that demarcates Second Great Depression territory, but if you have been paying any bit of attention to the news these days, it sounds like that is in the past already, consigned to history as the "green shoots of recovery" burst forth.

Me, I'd give it a year or so. This time next year. Say around May to June 2010. From what I gather so far, chances are this time period might be a good time for the "Second L" to come down. The second downleg, the Double L theory, call it what you will. Then we'll see how the GDP figures are at that time. Only if these "green shoots" take root, then I'd be somewhat impressed. Keep posted.

Taiwan passes major green energy bill

Low Ee Mien — Mon, 15 Jun 2009 04:32:48 -0700

channelnewsasia.com :

Taiwan has passed a bill on renewable energy in a move which is expected to attract NT$30 billion (US$937 million) worth of investment. Parliament on Friday [12 Jun 2009] approved the bill, which is aimed at adding 6,500 to 10,000 megawatts of installed energy from renewable sources over the next 20 years. Currently, Taiwan has only 2,278 megawatts, or 5.8% of installed capacity, from renewable sources, according to the state-run Taiwan Power Co. The bill is estimated to create more than 10,000 jobs and is part of the government's plan to reduce carbon dioxide emissions to 2008 levels by 2016, and to 2000 levels by 2025.

- Good initiative, reminiscent of the efforts of Sweden and France which are also moving in this general direction, though perhaps not as wholly ambitious as them. We're seeing countries all around the world starting to make firmer commitments to clean energy, and we would also want to keep in mind that oil-producing countries such as Australia, Mexico, Norway and the UK which are coming to grips with their own Peak Oil issues ought to be quite keenly aware of the need to move away from fossil fuels as well.

If you are an investor, it might be a good time to look at clean energy companies, and one good way to buy into this sector is through PBW, the PowerShares WilderHill Clean Energy ETF. It's got a mix of companies in various sub-sectors including solar, materials, batteries, fuel cells and such. It's even got an ocean power company and a geothermal company. As a fund manager myself, I'd say that's a pretty okay mix. Perhaps I might add a bit more wind energy, and I wouldn't rule out nuclear energy either, though that might probably have an asset allocation of its own.

China car sales jump beyond imagination with 2-month wait

Low Ee Mien — Mon, 15 Jun 2009 04:31:54 -0700

bloomberg.com :

Zhao Hang, who helped devise China's auto-stimulus package, is facing demand from car buyers battling an unexpected consequence - two-month waiting lists. Zhao said : "Given the world economic situation, demand for cars is surprisingly strong in China." Beijing drivers, used to leaving showrooms with new cars the same day, now have to wait 3 weeks for a Hyundai Yuedong Elantra, China's bestselling car, or as long as 8 weeks for a Honda CR-V. In May 2009, passenger-vehicle sales surged 47% from a year earlier.

Auto sales have surged after the government offered subsidies and cut retail taxes as part of a 4 trillion yuan ($585 billion) economic stimulus plan. Combined with a 37% slump in US auto sales, the surge has made China the world's largest auto market. Beijing Hyundai ran plants at near-full capacity last month, while Honda's two China ventures have been running with three shifts because of demand for models including the Honda City and the Honda CR-V, the bestselling SUV in China.

- This is quite a contrast compared to the recent GM and Chrysler bankruptcy filings. Whilst the American car-makers seem unable to shut down fast enough, half a world away, the Chinese automotive industry seems unable to churn out new cars fast enough. Like that guy said, it's kind of surprising given how a pretty big chunk of China's economy is export-oriented and exports are supposed to be falling what with the global recession and all. It remains to be seen how much of this demand is for real and how much of it is just a temporary boost from their economic stimulus plan.

GM files for bankruptcy, gets delisted from Dow Jones and NYSE

Low Ee Mien — Mon, 1 Jun 2009 08:30:00 -0700

This article belongs to the GM, Ford and Chrysler bankruptcy watch story arc.

news.yahoo.com :

General Motors filed for bankruptcy on Monday [1 Jun 2009], the largest ever in US manufacturing, as the Obama administration took the first steps to try to revive a failed icon of American industry. GM had been kept alive by $50 billion in US government funding. GM plans to close or idle 14 US plants and warehouse operations. The closings will cut 18,000 to 20,000 GM workers in the US. GM would also cut almost 8,000 white-collar jobs.

Chrysler's bankruptcy was seen as a test run for the much bigger reorganization of GM. A bankruptcy judge has approved the sale of Chrysler's assets to a group led by Fiat. President Barack Obama said he was confident GM could emerge quickly from bankruptcy. GM will be divided into two : "New GM" and "Old GM", its shuttered plants, stranded equipment and other spurned assets left to liquidation. In the wake of its bankruptcy, GM stock was removed from the Dow Jones index and delisted by the New York Stock Exchange. GM's stock fell to a low of 48 cents on Monday, a level last seen during the Great Depression.

- The wait is over. And with a 60% stake by the US government, General Motors is now, as the pundits would say, Government Motors. Sure, it's still going to be GM, but it's going to be a very different GM. And as GM goes, so goes America. The mantle of leadership is being passed on by the Americans to the Asians and the rest of the world, and it's not only leadership in the auto industry. From the most basic of commodities production to the heights of space exploration, it is time to let the Chinese, Indians, Koreans, Russians, Brazilians and others, take over the reins and lead the way in new directions. For it is apparent, and it has been apparent for some time, that the American Way is not quite what it once used to be. It is time for change.

GM to file for bankruptcy on Mon 1 Jun 2009

Low Ee Mien — Mon, 1 Jun 2009 03:08:48 -0700

This article belongs to the GM, Ford and Chrysler bankruptcy watch story arc.

news.yahoo.com :

General Motors will file for bankruptcy on Monday [1 Jun 2009], as the government tries to revive the 100-year-old automaker once seen as the symbol of American economic might and dynamism. The planned filing would be the third-largest in US history and the largest manufacturing bankruptcy. The administration saw few other options at a time when the jobless rate is soaring, given that GM employs 92,000 in the United States and is indirectly responsible for 500,000 retirees. The filing is expected before US markets open and caps a three-decade-long decline for GM that ended in outright crisis after the weak global economy, high oil prices and tight credit slammed sales and left it unable to raise cash.

By preparing to take a 60% stake in a reorganized GM, the Obama administration is gambling that the automaker can compete with the likes of Toyota after its debt is cut by half and its labor costs are slashed under a new contract with the United Auto Workers union. While the "new GM" is expected to emerge quickly from court protection, the automaker's shuttered plants, stranded equipment and other spurned assets would be left to liquidation in bankruptcy. GM's stock fell to 75 cents on Friday, on what was expected to be its last trading day before bankruptcy.

- This had been the only viable solution all along and it sure took them long enough to carry it out. Now that the decision has been made all that is left is to await the fallout and to see how far it spreads. The pundits have been saying that the so-called "green shoots" recovery might ameliorate things a little, but many of them were the same ones who had been saying that GM did not necessarily need to go into bankruptcy in the first place. So would you believe them? I sure don't.

You know what they say : "So goes GM, so goes America". Read that last paragraph once again. Whatever is shut down is going to be liquidated. It's a fire sale. Sure, "nobody's talking about a fire sale here". Not yet, anyway. So if you're some private entity or individual with spare cash looking for a nice and cheap building, here's your chance to grab a former GM factory or two.

1. Report: GM mulling bankruptcy
2. GM warns of bankruptcy risk
3. GM said to speed bankruptcy plans
4. Chrysler files for bankruptcy, enters Fiat deal
5. GM bankruptcy still likely despite plans to cut 23000 jobs, drop Pontiac brand

Canada publishes first comprehensive atlas, maps geological riches of Arctic mineral resources

Low Ee Mien — Sat, 16 May 2009 20:08:27 -0700

This article belongs to the Polar melting, Arctic mining and mineral resources story arc.

ottawacitizen.com :

Canada has published the first comprehensive atlas of Arctic geology - everything from continental plates to rock types that signal where to hunt for gold, diamonds, gas and oil. The atlas contains $1-billion worth of data from polar countries, and carries enormous implications for contentious Arctic sovereignty claims - based partly on formations under the ocean - and for mining and earthquake forecasting. The map is available electronically and in a poster from Natural Resources Canada, showing the world north of the Arctic Circle.

Already, mining companies are eager for a look, said Marc St-Onge, a Geological Survey of Canada senior scientist. Canada, Russia, the United States, Denmark, Norway, Finland and Sweden all contributed data. The $1-billion figure represents years of field work by these countries combined : icebreakers, helicopter flights, seismic profiles, and geologists trekking on foot. It shows not only the surface, but also deeper layers in 3D "data cubes." He noted that with the economic slowdown, the mining industry has time to digest what the atlas shows, without pressure to rush out and drill right away.

- The irony of all this has already been noted a couple of years ago and it goes like this :

1. Humans burn fossil fuels to release the buried solar energy stored therein
2. Atmospheric carbon dioxide levels rise and the natural "greenhouse effect" is amplified
3. The oceans warm and ice melts
4. Melting ice opens up new prospective oil & gas provinces for exploration & production
5. Humans burn more fossil fuels ... and back to (2)

The above passage really does point out the absurdity of the situation. But there is nothing particularly funny about it if you also consider the potential global sea level rise, with 7 meters (23 feet) due to Greenland melting and, it has also been said, up to 60 meters (197 feet) if Antarctica were to also melt.

We need to break this cycle of burning fossil fuels. We need to implement solar energy, we need to implement wind energy, and at the same time we also should not rule out nuclear energy - whatever alternative energy sources that are workable and that are deployable. The alternative is for the countries of the world to start fighting resource wars - and there are those who argue that these resource wars have started already. There could be increasingly nasty conflicts over increasingly scarce resources. The Great Arctic Endgame is just one of them.

Singapore electric vehicles : Government agencies EMA and LTA to study EV introduction

Low Ee Mien — Wed, 6 May 2009 16:08:14 -0700

channelnewsasia.com :

A multi-agency taskforce chaired by the Energy Market Authority (EMA) and Land Transport Authority (LTA) has been set up to study the introduction of electric vehicles (EV's) in Singapore from 2010. Key industry players include auto manufacturers and technology companies. S$20 million will be set aside to support infrastructure development and tests for electric vehicles. The EV test-bed will allow testing of different EV prototypes and charging technologies as well as research into vehicle-to-grid (V2G) power, and is expected to run for three years (2010-2012). The taskforce will then evaluate the scope for larger scale adoption of EV's in the future.

EMA CEO Mr Lawrence Wong said Singapore is well-positioned for the deployment of EVs because of its compact urban environment, robust electrical grid and IT infrastructure. The EV test-bed offers potential economic benefits for manufacturing and R&D, such as in battery technology, power electronics and electric drive systems. Renault-Nissan and Keppel Energy have signed an MOU with the EV taskforce. Renault-Nissan will supply EVs and share knowledge to develop common standards. Keppel Energy will develop charging stations and other supporting infrastructure.

- The timeline of 2010 to 2012 for the EV test program looks great. In fact, it looks like pretty good timing to me, with the likes of Toyota, Honda and Nissan and Mazda already planning PHEV's and EV's, and lithium-ion hybrid car battery manufacturing tie-ups coming up between major players including Honda-Yuasa, Toyota-Panasonic and Nissan-NEC. And on the American side of things, if/when they emerge from the current situation, they have the Chevrolet Volt, while the higher-end folks may start considering the Tesla Model S or the Tesla Roadster.

As an aside, back in Sep-Oct 2006, the Singapore government issued a National Climate Change Strategy call for consultation. My response included this item : "Consider a strategy to implement infrastructure for recharging of electric and plug-in hybrid vehicles, eg Cashcard-based overnight recharging stations in carparks". Of course technology and standards have evolved since then, with the current thinking as far as I can gather being the adoption of compact, standardized 440V/480V charging stations that can be put nearly anywhere including along roadsides (and hence near shops, businesses and other areas where people will visit), or inside carparks, existing petrol stations and so on, with quick charging times of just 15-20 minutes.

People like myself, whether environmentalists, peakoilers, or just concerned citizens, have been trying to push for something like this since years back. It is good to see the Singapore government starting to look into the possibility of introducing EV's onto Singapore's roads. This is a progressive and forward-looking initiative.

California housing market : No buyers, new homes get demolished instead

Low Ee Mien — Mon, 4 May 2009 08:29:11 -0700

peakoil.com :

1. BREAKING NEWS on the Housing Front: SHOCKING! Part 1
2. BREAKING NEWS on the Housing Front: SHOCKING Part 2
3. SHOCKING: EXTREME HOME MAKEOVER-DEPRESSION EDITION PART 3
4. SHOCKING: EXTREME HOME MAKEOVER-DEPRESSION EDITION PART 4
5. VICTORVILLE MODEL HOMES DEMOLISHED - SHOCKING VIDEO: Part 5

- This posting just came in on the peakoil.com forums. Apparently the banks couldn't find any buyers in the depressed California housing market, and got fed up with having to continue paying taxes, maintenance and upkeep for these brand-new homes, so they resorted to destroying them instead.

Talk about literally destroying excess inventory. Truth be told, the peakoiler community is not too surprised, since we did discuss the possibility that this kind of thing might come to pass. But looking at the real-life videos of it actually taking place is really something else. Like a fellow forumer put it, "Anyone else here get the feeling that we're witnessing history - of the scariest kind?"

In the earlier forum threads years ago, we also discussed the possibility that, even destroying the supply of new houses might not be of much help to stabilize housing prices, if the demand is falling faster than the rate at which the houses are being destroyed, all things being relative to each other. After all, if all the new houses were destroyed and prices still kept falling, what could be done next, destroy homes where people are living in?

We also did discuss one more possibility. That, over time to come, everyone would get their money back. After an outright crash (at that time we were still arguing "fast crash" vs "slow crash" - guess which one it turned out to be?), we raised the possibility that everyone who lost money in the markets would get their money back, and then some - when hyperinflation starts to kick in. So while people would get their money back in nominal terms (eg $500K houses falling to $200K and then reverting to $500K, ditto for the stock markets and so on), what that money would buy in real terms would be something else altogether (eg $20 loaf of bread). In this kind of scenario, nobody wins, everybody loses. Let's hope that doesn't happen - but it wouldn't hurt to be prepared.

GM bankruptcy still likely despite plans to cut 23000 jobs, drop Pontiac brand

Low Ee Mien — Sun, 3 May 2009 00:05:58 -0700

This article belongs to the GM, Ford and Chrysler bankruptcy watch story arc.

money.cnn.com :

General Motors announced plans to cut 23,000 U.S. jobs by 2011, drop its Pontiac brand and slash 40% of its dealer network in its latest bid to stay out of bankruptcy. The new restructuring proposal will leave the Treasury Department, and thus US taxpayers, and trust funds controlled by the United Auto Workers union owning 89% of GM.

GM CEO Fritz Henderson warned that a bankruptcy is still very likely unless bondholders agree to the swap. The moves are GM's latest efforts to cut costs and stem losses that have dogged its North American auto operations since 2005. The Obama administration has given GM only until the end of May to reach deals with creditors and unions to cut costs or be forced into bankruptcy. The Treasury Department extended GM an additional $2 billion in loans last week, bringing its total federal assistance to $15.4 billion.

- The moves so far still point very much towards a GM bankruptcy. They can drop all the brands they want and it still probably won't be enough. So why just drop Pontiac anyway? What's the point? And what's with this bond-equity swap deal anyway, who'd want stock that has dropped over 95% in recent years? As long as the crushing debt overhang remains, as long as the healthcare and pension plans remain, as long as the company continues to lose money, it remains headed in the same direction.

Honda may develop plug-in hybrid cars as Obama alters US policy

Low Ee Mien — Thu, 30 Apr 2009 21:43:54 -0700

bloomberg.com :

Honda, which sells the FCX Clarity hydrogen car, may also develop plug-in electric models as US policy shifts to favor battery-powered autos. US President Barack Obama has announced no new federal effort to promote hydrogen. Honda still sees hydrogen as the best long-term alternative that can cut carbon exhaust tied to global warming, Honda President Takeo Fukui said. Still, the company will respond to a push by the Obama administration for carmakers to sell plug-in hybrids. "Oil prices are going to go up. When that time comes, fuel cells, solar panels, hydrogen, those will be the key words," Fukui said. "We will have packages that will be very competitive at that time."

General Motors, Toyota and Nissan, and startups Tesla and Fisker are rushing out plug-in hybrid cars as the US moves to tighten fuel-economy and greenhouse gas rules. Honda has yet to announce plans to sell one, citing high costs for the lithium-ion batteries needed to power them and poor range. Honda last week began building a lithium-ion battery factory with joint-venture partner GS Yuasa to make packs for gasoline-electric hybrid cars. Honda plans to produce the vehicles in late 2010.

- And I was wondering where was Honda's PHEV policy. Now with Honda officially in the plug-in hybrid game, being one of the last major car-makers to announce their PHEV plans, the race for market share is on. Now all we need to change the entire global vehicle fleet and transport infrastructure to run on electric power is around 30 years, $45 trillion, and a lot of luck.

Chrysler files for bankruptcy, enters Fiat deal

Low Ee Mien — Thu, 30 Apr 2009 17:41:53 -0700

This article belongs to the GM, Ford and Chrysler bankruptcy watch story arc.

news.yahoo.com :

Chrysler filed for bankruptcy, a first by a major US automaker, on Thursday [30 Apr 2009] and announced a deal with Fiat, after being pummeled by sliding auto sales and unable to reach agreement on restructuring its debt. Chrysler has struggled in recent years to compete, hurt by its near total reliance on the US market, poor quality and a truck and SUV-dominated vehicle line-up with the lowest combined fuel economy of any major automaker.

Chrysler entered an alliance with Fiat, which was given an initial stake of 20%. Over time, Fiat could eventually own 51% after Chrysler has repaid its US Treasury loans. Chrysler will also be 55% owned by the United Auto Workers' healthcare trust fund while the US and Canadian governments hold a combined stake of 10%.

- Here we go. The contrarians and peakoilers have been tracking this one for years, and a conclusion of sorts has been reached. But then it did not turn out quite like the community had earlier expected, however. When the news back then was of a "struggling Fiat", it would have taken quite a twist in the plot to turn Fiat into some kind of "white knight" to rescue the ailing Chrysler. And look how fast Daimler of Mercedes fame got rid of its remaining Chrysler stake on 27 Apr, with Chrysler going bankrupt 3 days later. This bankruptcy has been a long time coming, but things certainly move fast, once they really get started moving.

Up next, GM. And possibly Ford. So who are they going to reach deals with, Citroën and Volkswagen?

Swine flu map roundup

Low Ee Mien — Thu, 30 Apr 2009 08:57:31 -0700

Been looking around to see if people have put up swine flu maps.
Apparently there are quite a few. Here's a roundup of 3 of them :

1. H1N1 Swine Flu on Google Maps - this might be the first swine flu map put up
2. HealthMap Global Disease Alert Map - entire world at a glance
3. 2009 H1N1 Flu Outbreak Map - this indicates the number of people on the map markers

Mexico to shut down economy as WHO says swine flu pandemic imminent

Low Ee Mien — Thu, 30 Apr 2009 08:46:45 -0700

news.yahoo.com :

Mexican President Felipe Calderon told his people to stay home from Friday [1 May 2009] for a five-day partial shutdown of the economy, after the World Health Organization said a swine flu pandemic was imminent. Calderon ordered government offices and private businesses not crucial to the economy to stop work to avoid further infections from the new virus, which has killed up to 176 people in Mexico and is now spreading around the world. 12 countries have reported cases of the H1N1 strain, with the Netherlands the latest to join the list.

WHO raised its alert level to phase 5, the last step before a pandemic. Mexico's central bank warned the outbreak could deepen the nation's recession, hurting an economy that has already shrunk 8% from the previous year in Q1 2009. The United States, Canada and many other countries have advised against non-essential travel to Mexico. Many tourists were hurrying to leave, crowding airports.

- This thing is spreading a little *too* rapidly. From being practically unheard of to just about a full-blown epidemic all in one week. The alternative media is already out in full force :

The new Mexican Swine Flu has elements of DNA from the following: avian flu, human flu Type A, human flu Type B, Asian swine flu, and European swine flu. A strange combination never seen before and having less than 1/10% chance of being a natural event. Human and animal viruses from four or more continents suddenly recombine in a new flu during a non-flu season that spreads from human-to-human with a 10% fatality rating ...

- That last part above has been reported by the MSM (mainstream media) as well, and there's quite a bit of buzz about it. Some people are thinking the unthinkable, and who can blame them? Stories like these (vials of a swine flu variant exploding on a train) aren't very helpful either.

Chrysler to proceed with bankruptcy

Low Ee Mien — Thu, 30 Apr 2009 07:10:19 -0700

This article belongs to the GM, Ford and Chrysler bankruptcy watch story arc.

news.yahoo.com :

Chrysler will proceed with Chapter 11 bankruptcy protection now that talks with debtholders have broken down, an administration official said on Thursday [30 Apr 2009].

- This is breaking news, and the initial report above is all that there is for now. So it looks like Chrysler is going bankrupt first, and GM is probably going to be next. It has been quite a while, since the first postings back in 2006 ("Chrysler plans production cut") and 2007 ("Chrysler struggles to shift unsold inventory").

Update :

bloomberg.com :

Chrysler will proceed today with a Chapter 11 bankruptcy filing to reorganize into a more viable carmaker in a partnership with Italy's Fiat, an Obama administration official said. The president's staff plans to use the filing to pave the way for Fiat to take a 20% stake in Chrysler. If Chrysler has to go through bankruptcy, it won't take long, Obama said. The goal is to finish the bankruptcy in 30 to 60 days, people familiar with the plan said.

- They're making it look like Fiat is some kind of hero white knight. You know, I don't really think so. In fact, I find this purported deal a little odd.

How time flies : The lost week

Low Ee Mien — Tue, 28 Apr 2009 20:22:25 -0700

How time flies. A whole week has gone by since the Earth Day 2009 post, and not a new blog posting in sight.

Haven't had much of a break since the CSEP (Certified Systems Engineering Professional) exam held by IES which was like 1.5 weeks back, and after that I was roped in to help out in a, well, let's just call it a certain small-to-mid sized project tender for the Singapore government. Some people might look at a 7-digit project as small, while others might look at it as medium-sized. The place where I used to work at regularly deals with 8-digit stuff and higher, and *their* jet fighter department goes into 11- or 12- digits so it's probably just a matter of perspective.

So what am I doing spec'ing out hardware and software for a *government* project? My job scope does include project solutioning and helping out with the technical aspects for both military *and* commercial projects so there you are. Anyway. Now that the recent crazy rush is over, I'm taking what you might call a "super-long weekend" spanning today, tomorrow, Labour day, and the regular weekend. Now that ought to be something.

So. Apologies for the break in the posting flow. Regular blogging shall resume shortly.

Earth Day 2009 : So what have you done for the environment today?

Low Ee Mien — Tue, 21 Apr 2009 19:01:36 -0700

earthday.net :

Earth Day 2009, April 22, will mark the beginning of The Green Generation Campaign which will also be the focus of the 40th Anniversary of Earth Day in 2010. With negotiations for a new global climate agreement coming up in December, Earth Day 2009 must be a day of action and civic participation, to defend The Green Generation's core principles:

* A carbon-free future based on renewable energy that will end our common dependency on fossil fuels, including coal.
* An individual's commitment to responsible, sustainable consumption.
* Creation of a new green economy that lifts people out of poverty by creating millions of quality green jobs and transforms the global education system into a green one.

- It has been 4 years since I have last mentioned Earth Day on this blog. Looking back, here's what I have done for the environment in the meantime:

1. Compared to 3 years back, reduced home electricity usage by 37%.
2. Upgraded the car from a conventional Honda Civic to a Honda Civic Hybrid.
3. Continued to track the latest developments in hybrid and electric vehicle technology.
4. Continued to promote the ideas of solar, wind and geothermal power as renewable energy sources,
5. At the same time, recognizing that nuclear and future space-based solar for baseload power also need to be looked at.
6. Tracked, promoted and took part in recycling - excluding food waste, over 80% of our household waste is now recycled.

So. What have you done for the environment today?
I will continue to do what I can and have so far, and try to do more.
I hope more people can do the same, or even better.
After all, it's the only Earth we have.

Oracle to buy Sun Microsystems for $7.4 billion at $9.50 per share

Low Ee Mien — Mon, 20 Apr 2009 06:06:57 -0700

money.cnn.com, nytimes.com :

Oracle said Monday [20 Apr 2009] it has entered into a definitive agreement to buy Sun Microsystems in a deal worth $7.4 billion. Oracle said it will buy Sun Microsystems common stock for $9.50 per share in cash, a 42% premium from Friday's closing price of $6.69.

The deal with Oracle came about 2 weeks after IBM ended its talks with Sun. The Sun board balked after IBM lowered its offer to $9.40 a share from $10. A Oracle-Sun deal disrupts the traditional relationships formed between some of the technology industry's largest players. "The acquisition of Sun transforms the IT industry," said Oracle CEO Larry Ellison, in a statement. "Our customers benefit as their systems integration costs go down while system performance, reliability and security go up."

First thoughts :

1. How many jobs are going to be lost over at Sun? Just received this tweet earlier from Chris Yeo : "Wow, Sun Microsystems has laid off quite a number of people in its Singapore office. Sounds bad."

2. Oracle now owns Java. Now what for Java?

3. Oracle now has both Oracle Database and the MySQL database. Now what?

4. Ditto for Weblogic and Glassfish.

5. Ditto for their portal, SOA, ESB and other products.

6. So, what happens to Jonathan Schwartz?

7. Sun sold out for a difference of 10 cents per share. Well I don't know the background story yet, but perhaps it made a big difference to them.

8. Yup, the IT industry and landscape has just been transformed. Big time.

9. So as a customer, should I look forward to bundled deals with Sun servers pre-installed with Weblogic App Server and Oracle Database and ready to go? I'd like that.

Singapore GDP contracted 11.5% in Q1 2009, depression marker reached

Low Ee Mien — Sat, 18 Apr 2009 19:54:10 -0700

This article belongs to the Singapore recession watch story arc.

channelnewsasia.com :

Singapore's worst economic crisis since independence is even more severe than expected, with output now forecast to shrink by as much as 9% in 2009. The Ministry of Trade and Industry said GDP would fall by 6-9% this year, a stunning downgrade from the previous estimate of a 2-5% decline, and the fourth downgrade since Nov 2008. Lee Kuan Yew had warned that the economy may shrink by 10% if exports continue to fall sharply.

The revised outlook came as data showed GDP shrank 11.5% in Q1 2009 from a year ago, far worse than the 4.2% decline in the preceding quarter, in the worst ever showing since records began in 1976. On a seasonally adjusted annualised basis, GDP declined 19.7% Q1 2009, also a record, compared with 16.4% in the previous quarter. Manufacturing shrank 29% in the first quarter. The revised GDP forecast was made after non-oil domestic exports (NODX) fell by an estimated 17% in Mar 2009.

- With the latest official report confirming Singapore's GDP contracting by over 10% year-on-year, it is apparent that the economy has reached one of the two markers that would indicate an economic depression. Unlike economic recessions, which are widely defined as two or more consecutive quarters of year-on-year GDP contractions, there are no widely accepted standard markers of economic depressions, probably because they are so rare in occurrence.

Well it looks like the rare has occurred. Some economists and many members of the contrarian community use these two markers to define economic depression : 1. a fall in year-on-year GDP of 10% or more, or 2. an increase in unemployment rate to 10% or higher. Hence according to the first indicator and pending the occurrence of the second, Singapore's economy is probably in depression, though whether the widely anticipated "second-half recovery" will make it a short fleeting one or if we'll get a "double-L" impact later on is something we have yet to see.

If there is currently any good news out of all this, it is the fact that, according to the Singapore Department of Statistics, the unemployment rate is (or rather was) still at a rather manageable rate of 2.5% at least as of Dec 2008. Of course with the collapse of exports figures and the 6-month lag effect, the unemployment rate is expected to rise.

The current theme on the mainstream media is that of recovery. The contrarian community has discounted this as an artifact of the next round, now still at an early stage, of inflation. With central banks pumping vast quantities of money into the system, we can only hope that they try not to overshoot too much, as they usually tend to.

Over 1 million unique visitors to this blog

Low Ee Mien — Wed, 15 Apr 2009 09:31:29 -0700

Just a little sidetrack from the ongoing issues of the moment as the present continues to transform into history, seemingly at an increasingly faster pace. Amidst all the action, this blog of mine has also transformed, from a small, tiny and totally unknown site to a slightly larger, medium-sized, slightly more known site.

From just around 1,000 visits per month in the beginning (if I was lucky), to 10,000 visits, and then in the past few months going over 100,000 visits per month. From an Alexa ranking that did not register at all amongst the hundreds of millions of websites in the world, to a ranking that currently stands around 550,000. Through it all, various web traffic counters and web analytics and statistics code have continued to track the hits, views and visits, and a milestone has just been reached with Sitemeter recording over 1 million cumulative unique visits to this blog.

It's a nice number and it's good to pause a bit and reflect on the journey so far. Given the niche nature of this blog and website, and the rather specific focus on energy, peak oil, inflation and commodities investing, it's great to see that there is an increasing audience of people interested in these areas. I will continue to try to chronicle things as they happen with the usual helpings of opinion and commentary, and endeavour to improve on whatever aspects of the site that I can. I hope that you have and will continue to find the postings here informative and useful, and I would like to thank you, the reader, for your visits and support.

Mazda to offer hybrid and electric cars by 2015

Low Ee Mien — Wed, 15 Apr 2009 04:10:11 -0700

peakoil.com -> themotorreport.com.au :

Mazda has back-flipped on its previous announcement that it would not offer alternative fuel engines as part of its goal to greatly improve the fuel economy of its vehicles. Mazda CEO Takashi Yamanouchi recently spoke of the company's plans to have both hybrids and electric vehicles on offer by 2015. Mazda aims to offer affordable eco-friendly transport to 90% of the car-buying public. At this stage, Mazda has no plans for sharing the technology with stakeholder Ford, but is open to the idea of selling the fruits of its labour.

- Compared to the efforts and advances being made by the likes of Toyota, Honda, Nissan and even GM/Chevrolet in the area of hybrids and electric cars, Mazda's announcement is a bit late to the party, but you know what they say, better late than never.

Sure I'm a Honda fan, having the highest regard for their key technological cornerstones, the i-VTEC and IMA as found in the Honda Civic Hybrid. I also have the utmost respect for the Toyota Prius and their HSD system. Nissan has started work on their own PHEV, and the Americans have their Tesla and soon the Volt. But I do wonder what level of technology Mazda will bring to the table. We'll see.

Honda, GS Yuasa JV to make lithium-ion batteries for 2010/2011 Honda Civic Hybrid

Low Ee Mien — Thu, 9 Apr 2009 18:31:31 -0700

greencarcongress.com :

The Nikkei reports that Blue Energy Co, the newly-formed joint venture between Honda and GS Yuasa will begin mass-producing high-performance lithium ion batteries for hybrid vehicles in the spring of 2011. This 51-49 joint venture of Yuasa and Honda is expected to start building a lithium ion battery plant this month at Yuasa's Osadano plant, in Kyoto Prefecture, at an estimated initial cost of 10 billion yen [US$100 million] or so. The production is expected to begin at a level sufficient for 100,000 vehicles a year. Honda plans to start using lithium ion batteries with the 2010/2011 Honda Civic Hybrid.

- Thanks to greencarcongress.com for the heads-up, though some details are scarce at this point in time, and I'm not quite sure on the date or year (2010? 2011?) of the next version of the Honda Civic Hybrid as well. But it is starting to look like Honda is getting serious about adopting lithium-ion battery technology for its next generation of hybrid vehicles.

I hope to see the questions that need to be raised being answerered in time. Questions on factors such as safety, reliabity, longevity, price, temperature response and so on. Another point to note is that apparently the Japanese players (Nissan, Toyota and now Honda) are going their own way, perhaps on a divergent path from the Americans (A123Systems, Chevrolet) in this nascent field of lithium-ion hybrid batteries. We'll see how things turn out.

Update #1 : Okay so I missed the earlier announcement with some of the details :

GS Yuasa 6Ah-class prismatic Li-ion EH6 cell ... the new venture will explore modifying the cathode materials and cell structure to optimize performance for next-generation hybrid vehicles. The EH6 ... is a 3.7V, 6Ah cell with a LiNiCoMnO2 cathode and carbon anode. Specific energy for the cell is 67.1 Wh kg-1 ... the cell can provide 10 seconds of boost power at 50% SOC of 1.2 kW (3,600 W kg at 25° C).

Update #2 : Some info about low-temperature response :

It has excellent low-temperature characteristics, maintaining 90% capacity even at -30*C.

Update #3 : And some more info on safety and longevity, and probably a little bit more than you or I have ever wanted to know about SOC measurement, calibration, and data acquisition chips :

The safety of Li-ion was a concern, but new battery technologies like the A123 nanophosphate cell, the EnerDel Spinel-Titanate chemistry, the GS Yuasa EH6 design and others are as safe as NiMh, offer extremely high power (200A peak discharge rates), and last 10 to 15 years with proper charge management. By model year 2012, the majority of hybrid cars and trucks will use lithium battery technology.

It's assuring to see that this Yuasa EH6 battery is being mentioned in the same sentence as A123Systems' nanotech cell. I would like to see more data to be sure, but if this means that the next generation of lithium-ion hybrid batteries from the Japanese could be as competitive as those from the Americans, then I probably wouldn't need to worry about having to switch away from my preferred brand :)

Defense spending cuts could kill Lockheed F-22, Boeing FCS and other weapons programs

Low Ee Mien — Wed, 8 Apr 2009 09:40:44 -0700

news.yahoo.com :

The United States would trim US missile-defense spending, cancel some big-ticket weapons programs and buy more arms for fighting insurgents, under a 2010 budget plan. Defense Secretary Robert Gates proposed to stop buying further F-22 fighters and kill a planned $13 billion new presidential helicopter. He also would scale down the Boeing-led potential $159 billion Army Future Combat Systems. Also canceled would be a projected $26 billion "Transformational Satellite" program under bidding by Lockheed Martin and Boeing.

Gates' proposal would cut missile defense spending by $1.4 billion; end production of Lockheed Martin's F-22 fighter at 187 aircraft; scrap a $15 billion competition for new rescue helicopters, buy 31 more of Boeing's F/A-18 fighter jets in 2010, and boost funding for the Lockheed F-35 Joint Strike Fighter. It would revamp the way the Navy builds destroyers and scrap a new cruiser program. The proposal would add funding for unmanned aerial vehicles (UAV's) and other programs designed to thwart insurgents.

- That is a big bunch of very deep cuts. Over a year back, I observed the Democrat momentum building over in the US and concluded that it might not be as good as it was before for US military/defence spending. My thinking at the time was that, yes, the Republicans have always been well known to support these big weapons platform projects but the Democrats were at least known to keep most existing projects running while they might perhaps slow down somewhat on new acquisitions.

In retrospect, the extent of these spending cuts should not have been too much of a surprise, perhaps in the same way the stock market crash in Q4 2008 should not have been too much of a surprise. The only surprise would be the breadth and depth of the thing. It's one of those intractable problems with forward projections, even if we were to apply systems thinking concepts. You can put together a collection of relevant trends and see some things coming your way but you cannot predict exactly how much, exactly when or exactly where. Unless you have a bona fide crystal ball, the detailed specifics (how bad the crash, how fast, how widespread) can be quite impossible to predict.

It's quite a waste actually. The Lockheed F-22 is a great fighter jet, and it gave me some measure of pride to have once been an employee of a small subsidiary of that very company that makes them. But then, the F-22 may have been the right tool for the wrong war. Short of somebody starting a real hot shooting war all over again, what we might be witnessing could well be economic, financial and trade wars going forward. On the other hand, you never really know. Once we really get into the swing of things and if/when they really crank up the resource wars, then these weapons systems might finally get a chance to perform as they were designed to. Until then.

GM said to speed bankruptcy plans

Low Ee Mien — Tue, 7 Apr 2009 09:06:41 -0700

This article belongs to the GM, Ford and Chrysler bankruptcy watch story arc.

bloomberg.com :

General Motors is speeding up preparations for a possible bankruptcy filing even as directors seek deeper savings this week to avoid that outcome, people familiar with the plans said. The bankruptcy readiness focuses on forming a new company from GM's best assets if necessary. The discussions center on how to go beyond GM's proposal to slash debt by 46% and shed 47,000 jobs in 2009. With bondholders and the United Auto Workers balking at concessions, a push for more savings makes bankruptcy more "probable," CEO Fritz Henderson has said. President Obama gave GM 60 days to restructure, without specifying what steps were needed to stem $82 billion in losses since 2004.

- As GM accelerates towards the brick wall of bankruptcy ahead, one has to wonder what lies beyond that point. From a distance, and indeed way ahead of time, it was actually not too hard for the peakoiler community, and some others, to predict the crash. What could be harder is trying to predict what happens afterward. It would be unfortunate if the community has to start quoting Dmitry Orlov as a reference. At best, GM emerges diminished but much more stable. At worst, we start talking Stage 3. This kind of thing, it usually turns out somewhere in between, but you never know.

Low Ee Mien - On board the Twitter bandwagon

Low Ee Mien — Tue, 7 Apr 2009 03:21:14 -0700

In the spirit of Hello World, "Hello Twitter" was my first tweet. Yup, with all the hype surrounding Google and Twitter and whether Google is buying them or partnering or whatever, I've climbed on board the Twitter bandwagon.

Shooperman was the one who played with it earlier on, but it was Stuart Tan from AKLTG who showed it off in front of an entire leadership/management class and convinced me that it was really going ballistic this time.

Follow me on Twitter at http://twitter.com/sklowem.

NYMEX crude oil prices rise above $53 on global stimulus, OPEC production cut

Low Ee Mien — Mon, 6 Apr 2009 04:19:28 -0700

bloomberg.com :

Crude oil prices rose on NYMEX on speculation global economic stimulus efforts and OPEC production cuts may slow growth in world stockpiles of the fuel. NYMEX oil prices climbed above $53 a barrel as the G20 stimulus plan to spend $1 trillion prompted the dollar to drop for a third day. OPEC production cuts imposed in Dec 2008 are being complied with and have helped stabilize prices, Algerian Oil Minister Chakib Khelil said. Crude oil for May 2009 delivery rose to $53.54 on NYMEX.

The US dollar index fell to a one-week low, to $1.3562 vs the euro. Prices rose last week as the dollar weakened and as world equity markets rallied on speculation the worst of the global recession may be over soon. While OPEC has contained output, the recession will limit price gains and oil is likely to trade between $50 and $55 a barrel, Khelil said.

- That's a good one, simply pointing out that current crude oil prices are currently in the $50-$55 trading range. The question now is whether the oil prices are responding to the purported second-half recovery that the MSM (aka "mainstream media") has been trumpeting or whether they are responding to the fall in USDX, the US dollar index, where it is apparently attempting to consolidate between 84 and 86.

I've got a hunch it's a bit more of the latter so a good bet would be to watch USDX carefully to see where it's going, and hence where crude oil may also be going. If the USDX is too abstract for you, you can try watching USD/EUR (also found here), where USD/EUR=1.35 looks like a great place for a game of "tug-of-war".

Singapore property market : Home prices fall 13.8% in Q1 2009

Low Ee Mien — Sat, 4 Apr 2009 19:59:31 -0700

This article belongs to the Singapore property market story arc.

channelnewsasia.com :

Prices for Singapore private property and public housing fell steeply in Q1 2009. In the HDB resale market, the first drop since 2006 was seen. HDB's flash estimate, based on its Resale Price Index, showed a decline of 0.6% in the first quarter compared to the previous quarter which had registered a 1.4% increase. The biggest drop on record though is 4.8% in Q2 2005, after HDB imposed curbs on cash-back practices, a scam where buyers inflated home loans to get extra cash.

As for private residential property, flash estimates from URA showed prices were down 13.8% in the three months to March, more than twice as steep as the 6.1% decline in Q4 2008. Prices in the "rest of central region" fell the steepest, at more than 17%. Going forward, analysts expect developers to use competitive pricing, or marketing strategies such as rental or price guarantees to move sales.

- This is kind of anecdotal, but a friend of mine had recently told me that when he sold off his property and was doing the paperwork, it was casually mentioned to him that landed property units of similar size had fallen by about 25% by now. I've got to say that was one hell of a call to make.

Looking forward, the hope is that the Singapore property market will recover gradually, stabilize, or at least not drop as much as before, depending on whom you talk to. A lot depends on the economy, or let's say everything depends on the economy, and if you were to talk to me, I would tell you that you haven't seen anything yet.

GM warns of bankruptcy risk

Low Ee Mien — Fri, 3 Apr 2009 23:20:37 -0700

This article belongs to the GM, Ford and Chrysler bankruptcy watch story arc.

news.yahoo.com :

General Motors warned on Tuesday [31 Mar 2009] there was a rising chance it could file for bankruptcy by June 2009. GM shares tumbled and its bonds fell as the markets began to price in a bankruptcy that could wipe out stock holders and force deep losses on creditors. US auto sales for March are expected to have fallen 40% from a year ago. Advisers to GM and Chrysler have been working to prepare for potential bankruptcy filings that would aim to preserve the best elements of the struggling companies while slashing debt and cutting pension and health care costs.

GM stock has lost almost half its value since Monday when Obama outlined policies sharply limiting taxpayer funds for automakers. CEO Fritz Henderson - installed in the job on Monday - said GM would have to close more plants and shed more factory jobs. His predecessor, Rick Wagoner, was forced out by the Obama administration, which gave GM 60 days to reach concessions with bondholders and the union. "By no later than June 1, if we're not able to accomplish this outside bankruptcy, we'll be in bankruptcy," Henderson said. Bondholders said they were braced for a reduced offer of "pennies on the dollar" for about $28 billion in GM debt.

- It has been the proverbial train wreck in slow motion but we are seeing the light in the tunnel which is that of an incoming train, and be careful what you wish for because you just might get it. Um wait. Talk about mixed metaphors. When some of the peakoilers started yelling "Die SUV's Die!!" (Jun 2005) it was arguably more of a tongue-in-cheek thing rather than looking for global economic collapse and a membership in the doomer faction.

But now we are approaching a state where a GM bankruptcy is not only looking possible but is getting increasingly probable, what with them hiring bankruptcy lawyers and the Obama administration's increasingly hardline stance towards the beleaguered automakers. If GM is to survive as a company, it has to cut the chains of ballooning debt and pension/healthcare expenses. We are getting closer and closer to a resolution of the question asked earlier in these pages - Could GM go bankrupt? (Oct 2005). The answer is looking more and more like a "yes". If and when GM emerges from this mess it would probably be a rather different company but that would be preferable to outright collapse and liquidation.

Tesla Model S electric car unveiled, specifications include 300-mile range, 5.6 sec 0-60 mph timing

Low Ee Mien — Tue, 31 Mar 2009 16:05:15 -0700

channelnewsasia.com :

Tesla unveiled Thursday [26 Mar 2009] the Tesla Model S, billed as the world's first mass-produced, highway-capable electric car. Tesla CEO Elon Musk said the company, which released its breakthrough two-seat Tesla Roadster, aims to have its sleek Tesla Model S sedan roll off assembly lines by 2011. It will be powered by lithium-ion battery packs capable of travelling between 160 and 300 miles (257-482 km) per charge, and can be charged at home in just four hours. The car has an anticipated base price of $57,400 but will cost less than $50,000 after a federal tax credit. Tesla's other zero-emission car, the two-seat Roadster, is on sale in Europe and the United States. GM is developing its own electric car, the Chevrolet Volt PHEV, which it expects to go on sale in 2011 for about $40,000.

wheels.blogs.nytimes.com

Three different power configurations will be available, Tesla Motors Mr. Musk said, "160-mile, 230-mile and 300-mile battery packs." The 160-mile pack comes standard on the $57,400 base model (a federal tax credit can shave $7,500 from the price). The Model S, which looks a bit like the Maserati Quattroporte sedan, was the subject of a recent styling re-do by Franz von Holzhausen, formerly of Mazda, who joined Tesla last year. The Model S will seat up to seven people. Folding the rear seats down increases cargo space.

- The Tesla Model S certainly looks good. And Tesla certainly knows its stuff - how to make high-end, good-looking electric cars. The question floating around the peakoiler community is whether it will be able to attract the same kind of clientele that it managed to do earlier with the Tesla Roadster - well-heeld, environmentally-minded, gadget-happy folks who do not mind being right out there on the cutting edge of technology and can still afford to shell out the big bucks for this kind of car in spite of the kind of economic times we are in. Let's see how the waiting list (if any) turns out to be like.

Japan exports fell 49.4% in Feb 2009 to record low on global economic collapse

Low Ee Mien — Sat, 28 Mar 2009 10:14:11 -0700

edition.cnn.com :

Japanese exports tumbled to record lows in Feb 2009. Exports fell 49.4% last month, compared with February 2008. Japan relies heavily on exports such as cars and electronics. But the global recession has slowed consumer demand in the United States, a major market, forcing Japanese companies such as Honda, Toyota, NEC and Hitachi to lay off thousands of employees in recent months. Shipments to the United States plummeted 58% while those to Europe tumbled 54%.

- While the rest of the world is talking about a second half recovery in 2009, perhaps Q3 or maybe towards the end of Q4, the peakoiler community is already looking ahead and the picture that the community is seeing does not look like very much of a recovery and that is putting it mildly. The community is talking about collapse not recovery.

The doomers are already talking about a Stage 2 collapse (out of Orlov's 5 stages). I wouldn't argue too much with that except that I really, really hope we do not have to experience Stage 3 onwards on any scale, global or local, because things tend to get rather messy from that point. It might take 4, 5 years, maybe 10 or even more for any sort of a real recovery, but the alternative is what you might call unthinkable.

Canadian tar sands company Suncor to buy rival Petro-Canada for $15 billion

Low Ee Mien — Thu, 26 Mar 2009 08:37:27 -0700

news.yahoo.com :

Suncor Energy, Canada's No.2 oil company, agreed to buy rival Petro-Canada for about C$18.43 billion ($14.86 billion) to expand its oil sands reserves and create the country's biggest energy group. Petro-Canada has faced pressure to boost the value of its shares due to the company's management failure to boost production and the firm's repeated failures to meet earnings targets. The companies expect to achieve annual operating expenditure reductions of $300 million and to achieve annual capital efficiencies of about $1 billion through elimination of redundant spending and targeting capital budgets to high-return, near term projects. The deal would combine Petro-Canada's extensive retail gasoline and refining business and its international operations with Suncor's extensive operations in the oil sands, where it is the No. 2 producer behind Syncrude Canada.

- I still continue to refrain from buying shares of Canadian oil sands (aka tar sands) companies based on principles of ethics, environment, and EROEI (yeah, they just so happen to be the "Three E's").

But if buying tar sands companies is your thing, and you wish to avoid hassles just like the above, where one company acquires another and you have to start to worry about share additions or subtractions or substitutions, and depending on your country perhaps taxation as well, may I suggest getting an ETF instead, such as the Claymore Oil Sands Sector ETF, symbol CLO on the TSX (Toronto Stock Exchange).

Instead of getting just 1, 2, 3 or more companies, and worrying about them, if you want the entire sector, you can buy the entire sector. It's a nice and neat package, and it's great for investors who are into it on a small-to-medium scale. Of course if you have Big Capital, that's a different story.

Personally, for both myself and the small private investment fund I run as a fund manager, I am advocating the sector or even sub-sector ETF approach. So we are long such ETF's as NLR for nuclear-energy related companies, we are long GDX for gold miners, and we are long PBW for clean energy-related companies. Among other things. On the relatively smaller scale that we are currently running things, it makes for a lot of sense from an asset allocation perspective. Instead of managing dozens of companies, I only need to manage a handful of ETF's. I then worry about the timing and execution of trades of these particular sections of the portfolio, which is exactly what I should do.

India inflation rate slows to 0.44% in Mar 2009, lowest on record

Low Ee Mien — Sat, 21 Mar 2009 19:52:37 -0700

This article belongs to the India inflation watch story arc.

bloomberg.com :

India's inflation rate slowed to a two-decade low, which is also the lowest inflation rate on record. Wholesale prices rose 0.44% in the week to 7 March 2009 from a year earlier after gaining 2.43% the previous week. The global recession has caused a decline in the cost of energy and commodities, slowing inflation across the Asia-Pacific region.

India has four separate measures to gauge consumer prices and they haven't moved in tandem with the wholesale price trend. Food prices have about 70% weight in India'a consumer price indices. Inflation as measured by the consumer prices paid by industrial workers quickened to 10.45% in Jan 2009, the highest since Dec 1998. The consumer-price index for farm workers increased 11.62% in January from a year earlier.

- Sure, we all know that the ongoing global economic crash has led to a fall in demand worldwide, hence leading to a fall in the rate of inflation in many countries, starting with crude oil prices which have fallen off the record high reached in Jul 2008. However, there is one sector where prices have not fallen much, if at all. And that is food. Check out the part above where they mention that for the consumer price indices that India is compiling, food prices make up 70% of them and those indices have been going *up*, not down. And they are going up at a pretty good clip of 10-11% too.

Everywhere, petrol/gasoline prices have fallen, housing prices have fallen, car prices have fallen. Food prices have not. In a thread titled "Global Food 2009" over at the peakoil.com forums, the peakoiler community has taken note of this trend. Global food inventory levels have not improved at all, and with all the bizzare droughts, floods and other effects of climate change, the situation does not look very good. But if it is investment recommendations that you are looking for, I have talked about it before. You could go load up on the agricultural ETF's MOO and DBA. I am.

Gold jumps over $950, crude oil rises above $50 as inflation concern spurs commodities

Low Ee Mien — Fri, 20 Mar 2009 05:56:16 -0700

bloomberg.com :

Gold prices jumped the most since Sep 2008 and crude oil exceeded $50 on speculation the Federal Reserve's steps to spur growth will revive demand for commodities as a hedge against inflation. Gold futures in New York rose above $950 an ounce on COMEX after the Fed said it would buy as much as $300 billion of U.S. government bonds, adding to the supply of dollars. The Fed is keeping its main lending rate at almost zero. Silver, platinum and palladium also gained.

Crude oil prices for Apr 2009 delivery rose as much as $3.51 to $51.65 on NYMEX. Prices remain 65% below Jul 2008's record high of $147.27. The US Dollar Index dropped for an eighth day, potentially boosting demand for commodities as an alternative asset.

- The crude oil 50/200-dma crossover that I had been talking about earlier seems to be coming along nicely. It would be great if it could hold for a while above the $50 level to confirm that it has transformed from a resistance level to being a support level. As for gold, I had been looking for a potential head & shoulders pattern which might not materialize after all, what with the Fed's printing press bombshell that they unleashed on an unsuspecting market the day before. I would be looking at $950 now as a potential intermediate support level, with strong support at $900.

We have to bear in mind of course that the inflationary impact wouldn't make its way into the real economy just yet - there is always a lag time involved. Some contrarians say that would be 6 months while others say it could be up to a year before we'll see any effect on actual street prices of things. So, whether this is a short-term knee-jerk reaction or whether crude oil and gold are really on a rocket ride to the stars, we'll have to wait and see.

US dollar index falls below 84 as Fed ramps up printing press

Low Ee Mien — Thu, 19 Mar 2009 22:38:56 -0700

bloomberg.com :

The rally that pushed the dollar to the highest levels since 2006 is in danger of crumbling as the Federal Reserve starts buying Treasuries and ramps up its purchases of mortgage debt, adding to a flood of greenbacks. Fed policy makers said they plan to buy up to $300 billion of U.S. government bonds and step up purchases of mortgage bonds, expanding the central bank's balance sheet by as much as $1.15 trillion. The extra supply of dollars threatens to overwhelm investors just as the budget deficit swells.

The US Dollar Index tumbled 2.7% to 84.595, its biggest one-day drop since 1971. Fed policy makers have committed to buy or lend against everything from corporate debt, mortgages and consumer loans to government bonds as they try to end the seizure in credit markets.

- Well, this is it. This is what the contrarian community has been waiting for - the first move by the Federal Reserve to begin direct monetization of US Treasury debt via the printing press once it became clear that the usual players are not going to buy it up any more. So much for Hillary Clinton begging China to buy their debt. Of all possible times, Ben "Printing Press" Bernanke has to choose right now to begin to live up to his nickname.

The markets reacted immediately and violently to the pronouncement. The forex market went absolutely bonkers as the EUR/USD rate jumped from 1.30 where it had been hovering to 1.34, 1.35 and now 1.36 at the point of writing. Crude oil prices jumped from the $47-48 consolidation level and quickly breached the $50 resistance level almost like it wasn't there. Gold prices jumped from below $900 to over $950, skipping two resistance levels in one bound. Gold took out the $950 level like oil took out $50, resistance levels providing not much of a resistance at all.

The unspoken fear has now been brought out into the open, that the US will threaten to drag the rest of the world into a state of Zimbabwe-like hyperinflation. The only question now is whether the Federal Reserve is willing to carry out this threat to its logical conclusion as the bond markets rebel and "hit the bids". It will be a terrifying race between collapsing bond and derivatives markets and the Fed's electronic printing press. Either way, it is almost a foregone conclusion that the world's financial system will never be quite the same again after the smoke clears.

Singapore : jobs in steep decline, net employment outlook drops 99%

Low Ee Mien — Wed, 18 Mar 2009 04:15:02 -0700

This article belongs to the Singapore recession watch story arc.

channelnewsasia.com :

According to a survey of 636 employers by Manpower Staffing Services on hiring expectations, just 7% expect to up headcount but 50% anticipate a decrease. Year-on-year, employers reported a "very steep decline" of 99 percentage points in net employment outlook - derived by taking the percentage of those anticipating more hiring and subtracting from this the percentage expecting a decrease in employment. The bleakest prospects for jobseekers appears to be in the transportation and utilities sector, with the private education industry close behind. Interestingly, the finance, insurance and real estate sector posted the least pessimistic employment outlook, perhaps because hiring expectations have hit rock bottom and plateaued. At the other end of the spectrum is the transport and utilities sector, which includes logistics and warehousing companies that have been hard hit by the collapse in world trade.

- Net employment outlook dropping 99%. Even amidst the sea of bad news out there, that really grabs some attention, doesn't it? As for the private education sector, it seems that the smaller, "less branded" ones are under quite a bit of pressure at the moment, with the larger ones still getting a more than healthy influx of students. Especially with the Singapore government's SPUR grants and so on, pumping over S$600 million into retraining workers to try to help the retrenched ones acquire new skills to try to get another job.

This is not just another recession. Even the traditionally defensive sectors I have mentioned earlier, such as education, healthcare and utilities, are under some pressure here. These are extraordinary times, and we will see more and more extraordinary measures.

See also :

MM Lee Kuan Yew : Singapore GDP may contract 10% in 2009; retail sales fall most in decade

Low Ee Mien — Sat, 14 Mar 2009 19:54:06 -0700

This article belongs to the Singapore recession watch story arc.

bloomberg.com :

Singapore's retail sales fell the most in a decade in Jan 2009 as consumers purchased fewer cars, household and luxury goods amid a deepening recession. The retail sales index dropped 12.2% from a year earlier. Retail-sale volumes in January decreased 14.8% from a year earlier after removing the effect of higher prices.

Singapore's Minister Mentor Lee Kwan Yew predicts the economy may contract as much as 10% this year if exports continue to plunge. Job losses may rise in 2009 and reach numbers not seen since the 1997 Asian Crisis as Singapore goes through its worst recession, the government said.

- You wouldn't know it from looking at the crowds of people still thronging the shopping malls nowadays, epsecially during weekends. So we can suppose that these crowds of people are not quite translating into sales for the retailers. Perhaps they are there just to take a leisurely stroll and to enjoy the aircon.

But the really notable point in the article is MM Lee Kuan Yew's prediction of the Singapore GDP falling by as much as 10% in 2009. If they did not quote him wrongly, then that would be a departure from the earlier government forecast of a 2-5% contraction, or even his own earlier forecast of an 8% fall. If MM Lee's forecast turns out to be true, we could be talking depression territory according to one of the two benchmarks I'm following (the other one is a 10% unemployment rate).

NYMEX crude oil near $47 after surge as OPEC weighs production cut

Low Ee Mien — Fri, 13 Mar 2009 01:31:51 -0700

bloomberg.com :

Crude oil prices traded near $47 a barrel, set for a fourth week of gains, as OPEC prepares to meet to consider a cut in output. Crude oil for Apr 2009 delivery was at $46.59 per barrel at 2:36 p.m. Singapore time on NYMEX. Yesterday, futures rose 11% to $47.03, the most since 19 Feb 2009. Prices have advanced 4.6% this year and gained 2.5% this week. OPEC has reduced daily output targets by 4.2 million barrels since Sep 2008. Ministers will meet in Vienna on March 15 to discuss whether to make further cuts.

- Using basic TA, while keeping in mind that technical analysis isn't much of an exact science, we could be looking at an impending 50/200-dma crossover event as crude oil prices start to rise from a 3-month period of consolidation. After 3 long months of attempted and failed rallies, and a bruising $100 fall from the $147.27 record, oil bulls could probably be excused if they are feeling rather skeptical about the latest price movements. If it goes back below $45 or $40, oil bulls will head back to the bunker. But as long as oil remains over $45, there is some reason for hope. If it gets past $47, the $100 argument no longer applies. And if it goes over $50, we're off to the races.

2010 Honda Insight hybrid Japan sales overtake Toyota Prius in Feb 2009

Low Ee Mien — Wed, 11 Mar 2009 22:37:31 -0700

greencarcongress.com :

The 2010 Honda Insight hybrid was Japan's 10th-best-selling new car in Feb 2009, excluding minicars, according to figures from the Japan Automobile Dealers Association. The Honda Insight made No. 10 in the category of vehicles with engines of 660cc or larger, beating the Toyota Prius hybrid. The Toyota Prius came in 12th, with its sales falling 20% from a year earlier. But sales of the Prius will likely pick up once Toyota releases the 2010 Toyota Prius in May 2009. Toyota also plans to continue selling the current Prius at a lower price even after the new one is launched.

- Fancy new hybrid cars have got to be a pretty tough sell in this economic climate and with oil prices hovering around the $40 level at this moment. That hasn't stopped Toyota and Honda from trying and we've got to give them some credit for that. Especially Honda for having the foresight to work towards this more cost-competitive Insight hybrid model way before the credit crisis hit.

Malaysia exports fall 27.8% in Jan 2009, biggest drop in 15 years

Low Ee Mien — Wed, 11 Mar 2009 06:11:39 -0700

channelnewsasia.com :

Malaysia's Jan 2009 exports plunged 27.8% year-on-year, mostly due to lower demand for electrical and electronic products, which account for one-third of Malaysia's total exports to key markets in China, Japan, Europe and the United States. In Dec 2008, Malaysian exports slumped 14.9%. An influential think tank said Malaysia was on the brink of a recession as falling demand hits exports and manufacturing. Official data showed Malaysia's economic growth slowed to just 0.1% in 2008 Q4, hit by falling exports and manufacturing as demand continues to evaporate.

bloomberg.com :

Malaysia's exports fell the most in 15 years in Jan 2009 as the Asian economic slowdown worsened amid slumping global demand for electronics and commodities. The central bank has said the collapse in global demand could tilt the nation into an economic contraction this year. Asia's export-dependent nations are reeling from the global slowdown, as Japan's exports plunged 45.7% in January and Singapore's exports fell 34.8%, the most in at least 22 years. Malaysia's exports to the U.S. dropped 31.8%. Shipments of electrical and electronics goods slid 33% from a year earlier. Palm oil sales abroad fell 22% as prices eased from record highs reached earlier last year. Malaysia is Southeast Asia's second-largest oil and gas producer and the world's No. 2 palm oil seller.

- Malaysia, while not as exports-dependent as Singapore or Japan, is hardly immune to the ongoing global economic collapse either. On the plus side, it does have commodities such as crude oil, palm oil and there is plenty of agriculture going on, but on the downside, the very sectors such as electronics and finance that they had been working on to try to bring the country towards a more developed status aren't going to be doing too well and that's putting it mildly.

Japan exports fell 45.7% in Jan 2009, economic collapse and depression next

Low Ee Mien — Wed, 11 Mar 2009 04:26:37 -0700

bloomberg.com :

Japan's exports plunged 45.7% in Jan 2009 from a year earlier, resulting in a record trade deficit, as recessions in the U.S. and Europe smothered demand for the country's cars and electronics. The drop in shipments abroad eclipsed a record 35% decline set the previous month.

Exports to the U.S. tumbled an unprecedented 52.9% from a year earlier as the global recession deepened. Shipments to Europe slid 47.4%, exports to China fell 45.1% and those to Asia dropped 46.7%. The collapse is likely to force Japanese companies to keep firing workers and closing factories. Japan's GDP shrank at an annual 12.7% last quarter, the most since the 1974 oil shock. Nissan said it will fire 20,000 workers. Toyota, which is forecasting its first operating loss in seven decades, will halve production in 2009 Q1.

- As far back as Feb 2006, Japan's then-PM Koizumi had been talking about the shrinking middle class. Of course the Internet community saw this coming way before that but let's give some credit to a former PM.

And now the middle class, not just in Japan but also elsewhere, is set to shrink further or, what was once unthinkable, perhaps even disappear altogether. Let's not kid ourselves here - falls in exports of 30%, 35% or more is not just another recession. These figures are more indicative of an economic depression. If the middle class were to disappear, there will only be the poor, and the rich. Guess what happens what extremes collide. So for our own sake, let's hope for some kind of recovery before the final stages kick in.

U.S. jobless rate hits 8.1%, a 25-year high, U-6 unemployment rate hits 16%

Low Ee Mien — Sat, 7 Mar 2009 03:53:07 -0800

news.yahoo.com :

The U.S. unemployment rate rose to a 25-year high of 8.1% in Feb 2009 as employers, buckling under the strain of a severe recession, axed 651,000 jobs. Since the recession started in December 2007, the economy has shed 4.4 million jobs. A total of 12.5 million people were unemployed in February. The Feb 2009 jobless rate was the highest since December 1983 and was a half percentage point above Jan 2009's 7.6%. Losses in February were broad based, with only government, education and health services hiring. Companies struggling with falling revenues and tight profit margins are axing jobs in huge numbers, forcing households to further scale back spending, creating a vicious cycle.

- Note that the job market typically has a 6-month lag effect after the stock markets give their take on the state of the economy, whether on the upside or downside. What we are seeing right now is the lag effect of say 6 months ago when the S&P 500 came down from 1400 to 1200. And now with the S&P 500 hitting fresh new lows below 700 and with the Dow below 7000, you can well imagine what the job market would look like 6 months down the road, let's say, in Sep-Oct 2009.

The dreaded double-digit unemployment rate of 10% or higher looks more and more like a foregone conclusion at this point. This is yet another race to the bottom - a race to determine whether the unemployment rate hits 10% first or whether GDP contracts by 10%. Either way, once either or both hit, we can pretty much wrap it up and call it the Second Great Depression. If you look at the U-6 unemployment rate of 16% on the BLS page which is the most comprehensive non-seasonally-adjusted figure, one could argue that we are already there. Now all we have to do is to wait for the headline U-3 figure to hit the big 10 as well.

Couple of website reviews

Low Ee Mien — Sat, 7 Mar 2009 02:39:13 -0800

I've put up a couple of website reviews on behalf of my cousin and his wife (or cousin-in-law, if there is such a term). My cousin's site is an fresh and marine aquarium online store and his wife's site is her personal blog on family and parenting.