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Short statistik ute

Under andra halvan av maj månad så köptes det tillbaka större delen av de 1.5 miljoner aktier i Dacha som shortades på 40 cent nivån.


Jag tror det var ett smart drag av shortarna för det vi läser om vad som händer med REE priserna i Kina är så nära panik man kan komma. Ett citat från hur förra veckan såg ut i Europium (Dacha har inte den metallen, men man har systermetallen Terbium):

“Suppliers quoted RMB11,000/kg for the rare earth oxide at the start of the week, but on Wednesday offer prices moved up to about RMB13,000/kg. By Thursday and Friday, much higher offers prices of RMB18,000-20,000/kg were seen in the market.”

Terbium och Dysprosium har på lite sikt betydligt bättre fundamenta än Europium där Lynas och Molycorp trots allt tillför en del metall när dom kommer igång.

Vi väntar nu på att de internationella priserna ska anpassa sig till de inhemska kinesiska priserna som ju rusade förra veckan.

US Jobs Figures Cast Fresh Fears About Global Recovery

By Emma Rowley and Philip Aldrick, June 3, 2011

Fears rose for the strength of the global recovery, after jobs figures from the US capped off a week of alarming data.

The unemployment rate in the world’s biggest economy climbed 0.1pc to 9.1 pc in May, while the number of jobs showed its smallest rise in eight months. Just 54,000 were added to payrolls for non-agricultural work – some 100,000 fewer than forecast.

The Dow Jones, the US benchmark share index, fell more than 140 points to just over 12,100 at one point as Wall Street digested the latest disappointment, while the dollar hit a record low against the Swiss franc, seen as a “safe haven” currency. However, the Dow recovered in late trading to 12,205.19 , down 43.36.

Investors had already seen a leading US manufacturing survey this week fall to its lowest level since September 2009 and a second credit rating agency threaten to put the country on review for a possible downgrade of its rating, unless politicians agree to raise its legal debt limit.

“The greater surprise is not the US slowdown was unexpected, but rather that it was so pervasive – reflected in housing, labour, manufacturing and consumer spending data,” said Michael Woolfolk, managing director at BNY Mellon Global Markets.

Analysts have blamed the softness in the US economy on high energy prices, supply chain disruptions following the Japanese earthquake and tornadoes and flooding in some states.

Austan Goolsbee, US president Barack Obama’s chief economist, told Bloomberg the jobs report marked a “little bump” in the road to recovery and warned against reading too much into one month’s figures.

“Markets have been jittery for some weeks now amidst concerns about global growth, and the shortfalls seen in today’s release are likely to exacerbate this – especially when looked at in conjunction with weak indicators elsewhere in the developed world,” said Scott Corfe at the Centre for Economic and Business Research (CEBR). “The West looks set for a difficult year.”

In line with this warning, analysts said data also out on Friday for the massive British services sector suggested that the UK’s growth may have slowed in the second quarter of this year.

Activity in the sector grew at its slowest pace in three months in May, according to the closely-watched Markit/CIPS purchasing managers’ index (PMI) which eased from 54.3 in April to 53.8 last month – the lowest reading since February and below forecasts of 54.1.

The slowdown was blamed on the sector’s exposure to hard-pressed British consumers, who are seeing their incomes squeezed by higher transport and energy bills and are unwilling to finance their spending by increasing their debt.

With the full set of PMIs – for services, manufacturing and construction – now out for the first two months of the current quarter, the CEBR predicted the UK economy’s growth rate from April to June will be lower than the 0.5pc seen in the previous quarter.

Economists again pushed back expectations of when interest rates will rise, judging that the recovery’s fragility rules out a move any time soon.


Gold as Collateral – a Major Step for the Gold Market

By Julian Phillips, June 3, 2011

The implications of the acceptance of gold as collateral are seen as extremely significant – particularly in the context of the Eurozone debt crises.

If gold were generally accepted as collateral in global monetary dealings, would we see it used as such? Strangely enough -No!  In certain transactions, however, where no other collateral -whether currencies, government bonds and the like-is used, gold may be used, as a last resort.  

There has been a very long history of gold being sought as collateral, but only the most desperate of debtors has allowed their gold to be used as such. Government bonds are easier to produce and are limited only by market confidence. Moreover they remain in the jurisdiction of the issuer, leaving the issuer in control of them. Gold is different and can only be used once, held outside of the owner’s jurisdiction. Control is therefore lost. It cannot be printed and becomes a complete commitment by the owner to honor his obligations.

So why is gold as collateral such an important step for gold in the global monetary system?


Last week, the European Parliament’s Committee on Economic and Monetary Affairs agreed to allow central counterparties to accept gold as collateral. Once ratified, we would see gold redefined as a highly liquid asset under the Capital Requirements IV Directive, due in June from the European Commission.

This is not the first time gold has been accepted as collateral. Late in 2010 ICE Clear Europe, a leading European derivatives clearing house became the first clearing house in Europe to accept gold as collateral. In February of this year JP Morgan became the first bank to accept gold bullion as collateral. The Chicago Mercantile Exchange is now accepting gold as collateral for certain trades and the London-based clearing house LCH Clearnet has said it also plans to start accepting gold as collateral later this year subject to regulatory approval.


Despite comforting words from the U.S. the Eurozone, government debt is being regarded with somewhat less enthusiasm than in the past. Both monetary zones are experiencing awful problems regarding their debt, particularly on the international front. A look at the Mediterranean members of the E.U. shows nations either unable to repay their debts or on the brink. This makes their debt dubious collateral. The sight of the E.U. wanting to control taxation -sell state owned assets on condition that more funds are poured into the country-is really what happens when an individual is liquidated (sequestrated). It’s nothing short of that. Will Greece accept this without some dramatic moves? If Greece had lost a war, then this is what the spoils would be. That is certainly how the Greek people will see it.


The answer to this big question is not as apparent as it seems….

If they are at the very least social unrest is likely, which in turn will further damage one of their main sources of revenues, tourism. But Greek voters are aware (as much as their government is aware) that Greece retains jurisdiction over Greek assets in Greece. It is their decision, not the E.U.’s.

Other potential reactions may include…

  • A refusal to accept anything but a 50% write-off of debt and leave the banks to sort themselves out.  
  • Leave the E.U. with the obligations unmet or a massive extension to the maturity dates made by the Greek government.
  • The reinstatement of the Drachma and make holidays in Greece very cheap, as inflation takes off, euro prices drop and Greece experiences a boom in Tourism.

No doubt the Greeks are weighing up all these options and will do what serves Greek interest best in the end.   Let’s glance at the dominant principles that will guide the process in the days and weeks ahead.

On the banking side, the concept of debt re-scheduling is unacceptable because it would reduce the asset base of the banks and undermine their solvency. The extension of debt and lowering of interest rates would overcome that problem, but it is paramount that the debt be repaid eventually, in a manner that an impoverished Greece can bear. The sell-off of state-owned assets will reduce state revenues and likely cause a tremendous amount of employment cutting (as the operations are made profitable) which will exacerbate the situation. The severity of a new debt package will hurt Greece and ensure that its economic woes last for up to a generation.

On the Greek side the principles of democracy demand that Greek government act in the interest of the voting public. This means that they must assess whether the solutions are acceptable to the Greek public. If they lead to the nation’s impoverishment for a generation then the Greek public will not accept them. A pragmatic assessment of the worst of the two situations must be made, an onerous set of repayments, or

The loss of financial credibility in the E.U. and the ejection of Greece from the E.U. (might be the lesser evil)

Such an isolation of the country may raise employment and improve tourism just as sanctions in relatively developed nations often produce a boom. Whatever the outcome you can be sure that politicians will follow voter’s first, ahead of banking requirements.

Whatever happens, it will prove very bad for the E.U. and the euro. Would you accept their debt as collateral? Unlikely! What’s worse is that any attempt to seize Greek assets without their approval may see Greece take itself out of the Eurozone. Would the E.U. actually invade to take Greek assets in payment of unpaid debts? A write-off of a good portion of what’s owed may be a disaster, but it may well be the only option left.  

This may well prove to be a battle of ‘bankers’ against democracy!


Of critical interest to the gold markets is the sight of Greek gold. Greece currently owns 111.5 tonnes of gold in its reserves [79.3% of its reserves] which can be taken out of its reach and into the hands of creditors. The sale of its government-owned assets to private hands under the pressure of distressed finances may well not achieve anywhere near their value. Would the Greek government pay the proceeds across to creditors immediately? Their gold has far more value than its current market price.  


But has it already been used as collateral in a Bank of International Settlement deal where it was swapped for foreign currencies? Last year the B.I.S. undertook many gold/currency swaps in mysterious, undisclosed situations. Were they tied to the bailouts? There will be no more devastating a blow to Greece’s financial credibility than a disclosure that the gold has already gone. It’s equivalent to the family jewels being sold off. And that is gold’s value, not its market price!

The current gold price is irrelevant to the repayment of debt. 111.5 tonnes is worth only $5.5 billion, which barely scratches the surface of Greece’s $350 billion debt. In a situation where monetary values are collapsing (the U.N. has just issued a report in which they state their fears of a U.S. dollar collapse) the gold price will leap to levels where national debt becomes relatively easy to repay and certainly worth all the promises a government can make at that time. Gold in extreme situations adds considerable credibility and value to any debt situations, way beyond its market price.

If the gold is there, then Greece would feel that it is the one asset which they can use when all credibility is lost. That’s why central banks hold so much gold in the first place! If Greece were to leave the Eurozone then Greece might have a chance, with their gold, to transition into a more prosperous country.


A look at the other debt-distressed nations that have received a bailout or may want a bailout…

  • Ireland has only 6 tonnes of gold in its reserves, which (in current prices) is worth only $296 million.   Ireland needs far more to solve its debt problems. The gold would be symbolic of the nation’s family jewels. The cleverest move Ireland has made was to insist on its low Corporation Taxes being maintained because this will allow much higher revenues to be achieved.
  • Portugal is in a different category. It has 382.5 tonnes of gold in its reserves which has a current market value of $18.9 billion, which would make a significant contribution to their debt situation.
  • Spain has 281.6 tonnes, whose value at current prices is worth $13.9 billion which again would make a significant contribution to its debt repayment.
  • Belgium has 227.5 tonnes with a current market value of $11.2 billion.  
  • The U.K. has 310.3 tonnes of gold remaining in its vaults. This is worth $15.3 billion.
  • Italy which has just come under the ratings agency’s spotlight holds 2,541.8 tonnes of gold in its reserves.   This is worth $121 billion at current values.
  • With the U.N. placing the U.S. dollar in the potential collapse category a glance at the published level of gold reserves shows that it holds 8,133.5 tonnes of gold, worth $4.01 trillion at current prices.
  • What if the crisis spread and the E.U. gold reserves at the E.C.B. came under threat? Its gold is 502.1 tonnes valued at today’s prices at $24.78 billion.  

Having showed these figures to you, we must stress that such gold reserves will only be used if there are no alternatives. It is a last resort asset, which when gone leaves the nation (almost) out of the international arena and in an (almost) isolated position. In some cases this may prove a good thing. An extreme example of this was seen when Rhodesia had international sanctions placed against it. It thrived, as all the imports had to be substituted for the local equivalents. South Africa, in the face of sanctions, also thrived. So you can be sure that some nations will be tempted to default rather than sacrifice their gold reserves.

As we said above, they may well have been pledged already via the gold/currency swaps last year and the current acceptance of gold as collateral is simply preparing the way for the publication of deals after the event.


The Eurozone Needs a Plan B, as ‘Quarantining’ the Weak is too Costly

By Andrew Balls, June 3, 2011

Will politics continue to dominate the economics in the eurozone’s response to the peripheral debt crisis? Or will the economics come to dominate the politics?

Greece is promising yet more fiscal tightening despite evidence this is self-defeating as growth is undermined.

Since the crisis started, the policy response has been to address liquidity concerns and kick the can down the road, hoping for a happy outcome or at least to delay the day of reckoning.

Greece and Ireland are on programmes that are neither working in terms of restoring stable debt dynamics, nor in keeping current investors engaged or attracting new ones. Portugal is now following the same approach.

The latest strains on Greece have centred on the fact that it was increasingly clear that hopes it would be able to return to the private capital markets in 2012 could no longer be maintained. Hence Germany and its eurozone partners are pledging to put in more money.

In return, Greece is promising yet more fiscal tightening despite evidence this is self-defeating as growth is undermined.

Greece is essentially insolvent. Given the size of its debt, the eurozone straitjacket and the lack of truly concessional financing, it is hard to imagine how it can restore stable debt dynamics without restructuring its debt.

The bigger question is whether it can keep going until mid-2013.

Other eurozone nations and the European Central Bank (ECB) may have faith that adding new austerity measures and debt will somehow sort out the problems – an immaculate recovery of some sort – but the real plan appears to be about buying time for other countries to make their own adjustments and for European banks with exposure to the weakest peripherals to recapitalise.

Judged by the performance of Spain and Italy, this strategy of “quarantining” the weakest three countries on European Central Bank or International Monetary Fund programmes can be said to be working. But it comes at a significant cost.

In the case of Greece, Ireland and Portugal, private-sector liabilities are being transferred to the taxpayer. Core creditor countries are increasing their exposure to the bail-outs.

Significant damage is being done to the ECB and the euro system, via their funding of distressed banking systems in addition to the past purchases of government bonds. The strains are showing.

This can be seen in the co-ordination problems among European governments, the electoral backlash and the rise of nationalist anti-EU parties.

It can also be seen in co-ordination problems among the fiscal and monetary authorities, notably the public spat between Berlin and the ECB on whether to encourage a “soft restructuring” of Greek government debt by encouraging banks, insurance companies and others to extend the maturity of their Greek holdings.

The ECB is no doubt trying to defend the integrity of its balance sheet, given its holdings. This is shown by the vitriol of its opposition to any restructuring in Greece. Germany, for now, appears to have blinked. But the ECB has upped the stakes considerably.

Yet another sign of the difficulties that politics faces in dominating deteriorating economics is the growing level of public protest at austerity measures.

The experience of emerging market countries suggests it is very difficult to sustain austerity programmes amid recessions. Economies can implode under the burden of punitive interest rates. Political support crumbles.

In Greece’s case, the creditor countries want more hands-on supervision of the implementation of fiscal tightening. There is a fat, political tail-risk that the Greek political system will not be able to deliver on the demands to “do more”, ending in disorderly default.

The better and more realistic approach for the eurozone as a whole might be to acknowledge the Greek plan is not working and move to Plan B – address the need for a restructuring of Greece’s public debt and perhaps that of other countries, too.

This is not without risks but it could be combined with a stronger firebreak as a step towards greater fiscal integration for the countries that qualify in the event that contagion spreads beyond the three, small, distressed countries. Spain, for example, faces potential liquidity challenges but not a solvency problem, unless its government allows itself to be dragged down by the banking system.

For investors, it seems sensible to take a very cautious approach to debt in the weakest eurozone countries and to look for better alternatives elsewhere, including in emerging markets with far superior debt dynamics and growth fundamentals.

Andrew Balls is head of European portfolio management at Pimco.


US Faces Credit-Rating Review from Moody’s

By Philip Aldrick, June 2, 2011

A second credit rating agency has threatened to put the US under review for a possible downgrade unless politicians put their squabbles aside and agree to raise the statutory debt limit.

The US treasury department has warned that the government risks default if Congress does not authorise more borrowing by August.

Moody’s said the world’s biggest economy’s AAA-rating is under threat because the country will run out of money unless policymakers agree to increase the limit on the national debt above the current $14.3 trillion.

The US treasury department has warned that the government risks default if Congress does not authorise more borrowing by August.

President Barack Obama attempted to pass a bill that would have allowed the US to increase its debt limit by $2.4 trillion, but it was rejected on May 31 after Republicans lined up against it.

Republicans are demanding spending cuts be brought into line with tax revenues as a condition of raising the limit, in the face of President Obama’s pledge to protect costly social programmes.

“The heightened polarization over the debt limit has increased the odds of a short-lived default,” Moody’s said in a statement. “If this situation remains unchanged in coming weeks, Moody’s will place the rating under review.”

The AAA rating will be kept if the debt limit is raised, Moody’s said, and a “credible agreement” on substantial deficit cuts would support a continued stable outlook.

In April, Standard & Poor’s put the US government on notice that it risks losing its AAA-rating unless policymakers agree on a plan by 2013 to reduce budget deficits and the national debt. The deficit is currently roughly $1.5 trillion.

Treasury Secretary Timothy Geithner has warned that a failure to raise the debt ceiling by August 2, the date he now projects borrowing authority would be exhausted, may have catastrophic effects on the economy by sharply raising borrowing costs.

Moody’s warning came on the back of a day of weak US data that sent stock markets across the world down for a second day running on fears that the recovery in the US is stalling. Figures showed new orders received by US factories declined in April and retail sales in May were lacklustre.

In addition, claims for US unemployment benefits slipped by 6,000 to 422,000 – less than economists’ expectations for a fall to 415,000.

Britain’s blue chip index, the FTSE 100, dipped 1.36pc to 5,847 as concerns spread across Europe. In France, the CAC 40 slipped 1.9pc and the Dow Jones Industrial Average was 0.3pc lower in afternoon trading. The dollar also slipped to a one-month low against the euro.

“Every indication we have had so far points to a slightly softer labour market in the US,” said Camilla Sutton, chief currency strategist a Scotia Capital in Toronto.