Opec output


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Not much demand destruction showing up here. Saudis set price and let quantity adjust to world demand. Can take a few months to show up due to the ‘supply chain’ that can expand and contract.

OPEC’s Oil Output fell 0.2% in October, Survey Shows

New York, Nov. 3 (Bloomberg) — Crude-oil production from the 13 OPEC
members in October declined 70,000 barrels a day from September, the latest
Bloomberg survey of producers, oil companies and industry analysts shows.
Figures are in the thousands of barrels a day.

Opec Production
October 2008

Opec Country October Est. Sept. Monthly Output Nov. 1 Change Est. vs. Target Est. Target Est. Cap. (@)
Algeria 1,400 1,400 0 1,286 114 1,450
Angola 1,875 1,800 75 1,801 74 2,000r
Ecuador 500 500 0 493 7 500
Indonesia* 850 865 -15 a’ a’ 900
Iran 3,900 3,950 -50 3,618 282 4,100
Iraq* 2,235 2,165r 70 2,500
Kuwait# 2,600 2,580r 20 2,399 201 2,650
Libya 1,750 1,720 30 1,623 127 1,800r
Nigeria 1,920 1,940r -20 2,050 -130 2,500r
Qatar 870 870r 0 785 85 900
Saudi Arabia# 9,350 9,450 -100 8,477 873 10,800
U.A.E 2,580 2,650 -70 2,433 147 2,800
Venezuela 2,350 2,360 -10 2,341 9 2,500
Total OPEC-13 32,180 32,250r -70 35,400r
Total OPEC-11* 29,095 29,220r -125 27,308 1,787 32,000r

*Quotas effective Nov. 1, 2008. OPEC agreed at its Oct. 24 meeting to cut
its quota target by 1.5 million barrels a day, to 27.308 million barrels
daily from Nov. 1. The new target excludes Iraq, which has no formal quota,
and Indonesia who leaves OPEC at year-end.


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Hong Kong and deflation


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The Hong Kong currency board arrangement means net Hong Kong financial assets (AKA money supply) can grow only via net exports (and/or external debt).

This means market forces work to sustain net exports ‘at any cost’.

The usual result is a deflationary mess, until ‘competitiveness’ is achieved to the extent net exports are sufficient for funding the domestic desire for net financial assets.

See ‘Exchange rate policy and full employment’ at www.mosler.org for more details of this process.

Yes, the monetary authority can intervene and give up its reserves to a ‘savings hungry’ domestic market, but at the risk of quickly running out of reserves needed to facilitate convertibility of Hong Kong dollars on demand.

Best I can tell, currency boards were originally instruments of colonial exploitation, designed to force net exports to the mother country.

Today, that’s an enormous price to pay for ‘currency stability’.

Hong Kong Home Sales Post Biggest Drop Since 1999

By Kelvin Wong and Nipa Piboontanasawat

Nov. 4 (Bloomberg) — Hong Kong’s home sales posted the biggest drop by volume in almost nine years, as local lenders tightened mortgage lending amid a slowdown in the economy.

The number of residential units that changed hands in the city last month slumped 58.1 percent to 4,719, according to a Land Registry statement today. That’s the largest drop since November 1999 and the fourth straight month of declines.

By value, sales of residential units dropped 63 percent from a year earlier to HK$16.3 billion ($2.1 billion).

The economic outlook, coupled with declines in the Hong Kong stock market, have curbed demand for real estate and led potential buyers to expect cheaper prices. The Hang Seng Index has dropped 48 percent this year.

Home prices on Hong Kong island, which houses some of the world’s most expensive apartments, had their biggest weekly drop in the week ended Oct. 19, according to figures compiled by Centaline Property Agency Ltd.


“We’ll probably see even worse figures for the following month,” said Wong Leung-sing, an associate director of research at Centaline. “Then things should improve slightly as many
people may try to buy at low prices.”

Hong Kong’s bank lending rose 13 percent in September, the slowest pace in 13 months, and almost half the 24 percent increase in August.


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Rush to join the euro


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As the Belgian bank giant Fortis collapses, citizens of that country appreciate the bonheur of belonging to the eurozone. Had it not been for the euro, Belgium would have devalued and sharply increased interest rates — just as Iceland was forced to do. The banking and financial crisis is quickly changing perceptions. Across Europe, there is a bit of a scramble to join the euro. Politicians from Scandinavia to Eastern Europe, fearful of the abyss, are re-evaluating the wisdom of going it alone (Denmark, Sweden, Norway) or postponing structural reform (Hungary, Poland). Brazil and Mexico have secured a swap line from the Federal Reserve Bank. When it comes to liquidity conditions, size seems to matter after all.

‘Had it not been for the euro, Belgium would have devalued and sharply increased interest rates — just as Iceland was forced to do.’

Yes, but only because they don’t understand what other options are, like sustaining output and growth via fiscal measures, setting interest rates where they want them for further public purpose (including the option of a zero rate policy), and letting private corps with external currency debt problems default on them and convert them to equity in bankruptcy while sustaining the ongoing business as desired for further public purpose (keeping the banks open while they are legally getting reorganized) etc etc.

It’s the blind leading the blind.


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Re: Eurozone to stick to their budget rules


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This will keep a lid on euro aggregate demand in the eurozone for a while as budget deficits grow due to falling revenues and increasing transfer payments.

Larger national deficits are needed to sustain output and employment, but also add systemic risk due to their peculiar institutional structure.

Eurozone to honour budget rules as econ faces stall

By Dave Graham and Anna Willard

BRUSSELS, Nov 3 (Reuters) – Euro zone finance ministers pledged on Monday to stick to European Union budget rules even though economic growth is seen halting next year, in a deal the European Commission hailed as needed policy cooperation.

“This is not the time to let the deficits rip,” said Jean-Claude Juncker, chairman of monthly talks among the finance ministers of the 15-country currency area.

“We don’t want to indulge in an orgy of spending and indebtedness — in essence, mortgaging future generations,” he told a news conference after their Monday talks.

The ministers backed European Commission forecasts that the aggregate budget gap of the euro countries would rise to 1.8 percent of gross domestic product in 2009 from 1.3 percent seen this year and to 2.0 percent in 2010, unless policies change.

They also supported the Commission’s estimate that euro zone economic growth would slow to a mere 0.1 percent next year from 1.2 percent expected in 2008 in the wake of the financial crisis.

EU Economic and Monetary Affairs Commissioner Joaquin Almunia said the widening of the deficit, mainly as a result of a natural fall in revenues and a rise in expenditure, already constituted a significant fiscal stimulus for the euro zone.

>   
>   On Mon, Nov 3, 2008 at 11:18 PM, James K. wrote:
>   
>   sad, sad.
>   
>   ”This is not the time to let the deficits rip,” said Jean-Claude Juncker,
>   chairman of monthly talks among the finance ministers of the
>   15-country currency area.
>   

Their loss, our gain, if we play our cards right and accommodate their desire for export driven growth- preferably with their exports going to us.

Might happen if we have the right fiscal package and trade policy to support imports.


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2008-11-04 USER


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Factory Orders YoY (Sep)

Survey n/a
Actual 1.5%
Prior 3.9%
Revised n/a

 
Dip down, but not terrible yet.

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Factory Orders MoM (Sep)

Survey n/a
Actual -2.5%
Prior -4.3%
Revised n/a

 
Down, but down less than last month.

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Factory Orders TABLE 1 (Sep)

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Factory Orders TABLE 2 (Sep)

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Factory Orders TABLE 3 (Sep)

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ICSC UBS Store Sales YoY (Nov 4)

Survey n/a
Actual .90%
Prior 1.30%
Revised n/a

 
Looks to still be weakening but off the bottom and still positive.

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ICSC UBS Store Sales WoW (Nov 4)

Survey n/a
Actual 0.60%
Prior 0.50%
Revised n/a

 
Same, still on the plus side.

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Redbook Store Sales Weekly YoY (Nov 4)

Survey n/a
Actual 0.30%
Prior 0.70%
Revised n/a

 
Looking lower, but still off the recent lows.

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Redbook Store Sales MoM (Nov 4)

Survey n/a
Actual -1.20%
Prior -1.10%
Revised n/a

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ICSC UBS Redbook Comparison TABLE


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