DJ OPEC Secretary General: Sees No Good Reason For IEA Oil

Looks like some OPEC infighting.

The only way OPEC could block Saudi attempts to lower price would be production cuts beyond the Saudi’s ability to increase supply.

In the past, OPEC has never actually been able to do that, as apart from the Saudis the rest pretty much always pump flat out even after they agree to cut.

I suspect the Saudis and Obama also know Lybia will be back online soon with another 1 million barrels a day make it that much more problematic for the rest of OPEC to cut sufficiently to get the price up.

And the US and the Saudis probably also know world demand is falling short of forecasts, or they probably wouldn’t have undertaken the price cutting actions.

*DJ OPEC Secretary General: Sees No Good Reason For IEA Oil Release
*DJ OPEC Secy Genl: Wants Immediate Cessation Of Stocks Release
*DJ OPEC President Ready To Call Emergency Meeting If Needed
*DJ OPEC President: Hopes Oil Market Won’t Warrant Emergency Meeting

China real estate comments

Yes, China understands it’s unlimited ability to support demand through deficit spending that includes funding through state owned banks.

The limits are their tolerance of inflation.

The question remains whether they can deliver a soft landing, rather than a hard landing, in their efforts to dampen inflation.

While theory says it’s possible, I’ve never seen it.

Other analysts say there are far more leveraged purchases of real estate than recognized in the official statistics.

To fight the effects of the global downturn, Chinese state-owned banks, on government orders, loaned about $3 trillion, mostly to giant state-owned enterprises. The money was reported to have largely financed infrastructure projects, such as China’s ambitious high-speed railway network.

But many of the loans wound up financing real-estate purchases instead, said Deng Yongheng, director of the Institute of Real Estate Studies at the National University of Singapore.

Prices at auctions for residential land in eight major cities doubled in 2009, largely because of highly leveraged purchases by state-owned companies, he and three co-authors calculate. In March 2010, state-owned companies bid up the price of one piece of Beijing land to 10 times the asking price, according to one analyst.

The magnitude of the leveraged purchases is hard to gauge.

One indication: Shortly after the Beijing land sale, the Chinese agency that oversees state-owned companies, ordered 78 firms–whose charters had nothing to do with real estate–to cease buying and selling property. Nearly a year later, in Feb. 2011, state-owned Xinhua news agency reported that just 14 firms had left the business and another 20 were expected to get out later in the year.

A spokesman for the agency said that the firms needed time to finish their projects, but added that there isn’t any prohibition against companies owned by provinces or municipalities to continue to invest in real estate.

Post-Quake Reconstruction Panel Calls for Tax Hikes

Nothing changes, seems:

Post-Quake Reconstruction Panel Calls for Tax Hikes

(Dow Jones) The Reconstruction Design Council issued a report Saturday recommending higher taxes to finance the recovery effort in areas hit hardest by the massive earthquake and tsunami. The panel set broad guidelines for resuscitating a huge swath of the country’s northeastern–an undertaking that will cost an estimated more than Y10 trillion ($125 billion). To pay for cleanup and recovery efforts, the council proposed temporary hikes in “core” taxes to redeem new “recovery bonds” backed by the full faith and credit of the government. It also called for a publicly-funded “loan assistance” facility to foster private investment, and special economic zones with less regulation and lower taxes to attract investment in agriculture and industry.