Courtesy of Russ Winter of Winter Watch at Wall Street Examiner
I am going to open this up for general discussion over the Memorial Day Weekend. I’d like the draw the attention away from Europe for this. We already knew that demand for iron ore, metallurgical coal, and other industrial related materials, was weak in China. Recently there have been buyer deferments and defaults. Interestingly there have also been defaults in the cotton and soy bean markets [China Defers Raw Material Cargos]. The later is interesting in that it points more to financial distress beyond a generalized economic slowdown. Loan growth has slowed significantly. How are local governments able to operate without land sales (down 19% YoY). Please comment about opinions of what transpiring here. Some claim the Chinese are merely gaming suppliers ahead of key negotiations as opposed to actual financial distress. How does decelerating electric demand square with this one? Are the markets only paying lip service to this?
The second topic is the fact that Japan has shut down it’s entire nuclear output going into the summer peak demand. Prior to the 2011 quake, nuke produced 30% of Japan’s electricity. Power generation has switched to natural gas, and prices for imported liquefied natural gas (LNG), Japan’s only source, have jumped—causing nine out of Japan’s ten mega-utilities to spill red ink. This is going to be one heck of an expensive summer! Discussion should be around prospect for a major slowdown because of this. Is the market paying any attention?
Topic three is the US fiscal cliff, debt ceiling, and political economy in general. Is this issue merely just another ungovernable kick the can down the road situation without consequence, or something far more ominous? As a template here is David Stockman’s recent interview on this topic. Is the market paying any attention?
Facts about the Fiscal Cliff (31 charts)
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