News reel: Economic Meltdown p3 – Commodities

Click on article titles to access the full copy from parents websites


Gold Little Changed in Asia as Dollar Steady Before ECB Meeting – Bloomberg LP - Jan 15, 2009

Jan. 15 (Bloomberg) -- Gold traded little changed in Asia as the dollar steadied before a European Central Bank meeting where interest rates are widely expected to be cut by at least half a percentage point. Platinum declined.


Resources downturn trips up contractors – The Australian – Jan 16, 2009

MINING companies slashing costs and cutting production as they struggle to cope with the global financial crisis is driving down revenue in Australia's engineering, contracting and services sectors.

Although analysts believe that the diminished income and the prospect of further contract cancellations are already being incorporated into share prices, they said the full impact had not yet been incorporated.


Metal meltdown rocks global miner Rio Tinto – The Australian – Jan 16, 2009

RIO Tinto continues to be battered by the global slowdown, with fourth-quarter iron ore sales falling 31 per cent.

Slumping metal prices are set to wipe more than $US500 million ($758 million) from the miner's bottom line and more aluminium production cuts have been flagged.


Under new management, miner ready to tackle debt – The Australian – Jan 16, 2009

RIO Tinto's board has shown it is serious about its turnaround by dumping chairman Paul Skinner 11 months ahead of plan. And yesterday's 18 per cent fall in iron ore production underlined the magnitude of the cutbacks ahead.

Rio's fourth-quarter production report is, of course, just a warm-up to the real event on February 12, when its half-year profits are released.


Oil Falls Below $34 After OPEC Reduces 2009 Demand Forecast – Bloomberg – Jan 15, 2009

Jan. 15 (Bloomberg) -- Crude oil fell below $34 a barrel after OPEC said that demand for its crude will decline 4.2 percent this year as the recession in the U.S., Europe and Japan curbs fuel use.


Natural Gas Falls After U.S. Supplies Drop Less Than Forecast – Bloomberg – Jan 15, 2009

Jan. 15 (Bloomberg) -- Natural gas fell to the lowest in more than two years in New York as government reports today on gas stockpiles, producer prices and manufacturing pointed to slower demand as the U.S. recession deepens.

Stockpiles declined 94 billion cubic feet last week, less than the 102 billion analysts expected, an Energy Department report showed. Prices paid to producers in the U.S. dropped for the fifth straight month and manufacturing in the New York and Philadelphia areas shrank. Slowing demand from factories and power plants has helped send gas down 15 percent this month.


Copper Prices Drop for Second Day in N.Y. as Stockpiles Rise – Bloomberg – Jan 15, 2009

Jan. 15 (Bloomberg) -- Copper futures fell for a second straight day as climbing inventories signaled global output of the metal is exceeding demand.

Stockpiles monitored by the London Metal Exchange climbed 1.4 percent to 387,325 metric tons today and have jumped 14 percent this month after surging 72 percent last year. Before today, copper prices plunged 65 percent from a record in May as slumping global growth slashed demand for the metal used in pipes and wires.


Soybeans Prices Jump on Adverse Weather in Argentina, Brazil – Bloomberg – Jan 15, 2009

Jan. 15 (Bloomberg) -- Soybeans prices jumped on signs that demand for U.S. supplies will increase as adverse weather damages crops in Argentina, the world’s biggest exporter of vegetable oil and animal feed made from the oilseed.


Australia Expects ‘Significant’ Drop in Coal, Iron Ore Prices – Bloomberg – Jan 15, 2009

Jan. 15 (Bloomberg) -- Export prices for coal and iron ore from Australia, the world’s biggest shipper of the raw materials, may drop significantly this year as slowing industrial growth curbs demand, the nation’s central bank said.

Peru in focus -- 2008 growth forecast, natural gas and a new contract for PetroPeru

Andina, a Peruvian news agency had some nice pieces on Peru to offer for those interested.

1. Peru sees solid economic growth amid global crisis -- Andina

It seems the central bank of Peru thinks the country will grow 9.1% in 2008, up from 8.9% in 2007. This will make Peru the fastest-growing economy in Latin America for 2008.

The bank predicts 2009 growth will be around 6.0% and attributes the slide mostly to decreasing revenue from Peru's metal exports.

Peru reported a trade surplus in 2008 of $3.1 billion, down from $8.36 billion in 2007, once again attributed in large due to shrinking revenue from exports and also from surging domestic demand for imports.

I'm not sure what happen Friday evening, but according to this other story on Andina, the Economy Minister revised GDP growth to 10% for 2008. I'll be sure to make a post later on in the weekend or early next week with growth estimates from other sources. Check out both stories and decide for youself =).


2. Peru natural gas output rose 27% in 2008 -- Andina

Good news for the natural gas sector in Peru. Total output during 2008 clocked in at 119.95 billion cubit feet, up 27% from the previous year reported Perupetro on Friday.

Increase in gas production was driven not by speculation from abroad but rather increasing gas consumption in electric power plants in the country. Although the article does mention how in December natural gas production declined by 4.7% compared to November/ December of 2007. Perhaps indicating the global slow down, and subsequent decrease in natural gas demand is hitting home in Peru as well.

Camisea natural gas plant

3. BPZ Resources signs $1.3 billion crude oil sales contract with PetroPeru

BPZ Resources says that the actual number of barrels sold will depend on commodity prices and the actual production of PetroPeru's Covina field in northwest Peru.

The deal covers the sale of roughly 17 million barrels of oil at an average price of $65/ barrel.

Commodities in focus -- Copper rises in London trading as China begins to stockpile raw materials

The commodity sector has been hit hard by the global economic crisis, especially in terms of the speed of its decline. For much of 2008 as other equities faltered, shares of commodity and energy stocks seemed immune, many times leading the major US indices into the green despite poor performance in other sectors.

When markets began to tank between September – November this all changed. Year to date (2008), oil is down around 60%, copper 50%, natural gas 20%, etc. As commodities plummeted miners profits shrank, exploration slowed, new mining projects became unfeasible in light of depressed prices and speculators who had been relying on energy and raw materials as a safe investment or inflation hedge withdrew their money.

If the stimulus packages being enacted by governments around the world successfully help to re-invigorate the global financial system and we see a recovery in confidence and economic activity the recession may end sooner than expected. If this happens commodity demand will once again explode, especially considering how so many producers and explorers have scaled back their operations.

China is not oblivious to this. Much like China's logic behind securing resources in Africa to avoid supply disruptions, China is now concerned about supply disruptions that may occur if demand picks up.

Bloomberg and Reuters reported this morning that China's Reserve Bureau, the country's stockpiling agency, is buying aluminum. Analysts seem to think (and I agree in this situation) that if they are buying up aluminum at cheap prices, they will do the same for other metals.

“Aluminum inventory in warehouses monitored by the Shanghai Futures Exchange declined 18% in the past week, the largest decline since April 2007, figures from the exchange today showed. China’s Ministry of Land and Resources said two days ago the country would build emergency stockpiles of copper and other items to guard against potential supply disruptions.”

(click here to access the full article from Bloomberg, republished by the Mining Journal)

China is smart to do this, with the country's massive foreign reserves and depressed commodity prices it makes sense for them to stockpile the resources they need to ensure their development. China is worried about its slowing economy because of the potential for political unrest in bad economic times.

Considering the fact China continued to purchase commodities when they where selling at their recent historical highs, it must feel like shopping at a giant fire sale for the Chinese who can now scoop up a huge stockpile of raw materials and energy for depressed prices.

Economics in play -- mixed messages from South American commodity producers

The current economic crisis has hit commodity producers in South America hard. All the talk about decoupling, booming domestic demand and well planned budgets will be tested as commodity exports plummet.

The big names in financial news (Reuters, Bloomberg, FT) reported this morning Brazil, Colombia and Chile have plans to sell bonds in international markets. All three of these economies depend heavily on revenue which is derived from commodity exports The recent tumble in commodity prices is not welcome news for these countries, which until just recently where some of the fastest growing emerging markets in the world.

Bloomberg LP reports Brazil will sell $1 billion of 10 year-notes, Colombia plans to raise what it calls a “benchmark offering” of roughly $500 million, and Chile has yet to release a figure on how much it will raise but its finance minister has confirmed it is very plausible the country will indeed issue its first foreign bonds since 2003 in order to help fun its fiscal stimulus plan.

(click here to access the full article from Bloomberg LP)

More bad news was released this morning when Brazil reported Industrial output dropped the most in 7 years. This is not a good sign. Internal demand from consumers in countries like Brazil and China remains high, but is not sufficient to keep these economies growing at the rates they have enjoyed during the past few years.

According to economists at Bloomberg, Brazil will expand at its slowest pace this year since 2003. Growth forecasts made by the Central Bank of Brazil are being cut in half for 2008 and economists are now predicting interest rate cuts later in January.

(click here to read more on this topic from Bloomberg LP)

One bit of good news comes from Braskem SA, Latin America's largest petrochemical company. It is currently in the midst of a 4-day rally in Sao Paulo trading. The gain comes as Peru announced plans to construct a new petrochemical plant in the southern port of Marcona.

Braskem, has been actively seeking natural gas and raw materials at competitive prices in South America. Peru has lined up $8 billion for its energy industry. Additionally, Braskem already had plans to build a plant in Peru that would be supplied by the Camisea gas fields.

(click here to access the full article from Bloomberg LP)

Recent developments in Peru seem to have bolstered investor confidence in the company which had previously been exploring natural gas investments in Bolivia and Venezuela. In both cases, there were various difficulties that emerged in working with the governments of Morales and Chavez. It seems, Braskem's new choice of opting to work in Peru is being interpreted by the market as the correct one.

I find it pretty interesting, that the mere construction of a Petrochemical plant in Peru, can turn the heads of investors and cause a petrochemical company trading in Brazil to go on a 4-day rally. It just shows how markets can move based on people's perception of regions they know little about.

I just hope investors realize that the rosy picture the international financial community paints of Peru may change if the government continues to fail at bringing prosperity the more remote regions of the country where much of Peru's raw materials are extracted from. For now though it seems the investors are content with Braskem's decision to avoid working with the left wing, anti-American regimes in Bolivia and Venezuela...

New Line: Peru in focus

1) IMF reasserts trust in Peru's growth despite global financial crisis

Lima, Nov. 05 (ANDINA).- First Deputy Director of the International Monetary Fund, John Lipsky, attending the XV APEC Finance Ministers’ Meeting met with the Peruvian Minister of Economy, Luis Miguel Valdivieso and with officials of the Central Bank of Reserves to discuss about the global financial crisis and its impact in Peru.

“As representative of the IMF I trust that Peru is ready to face the global financial crisis and it will continue with its sustainable growth within this context. Both, Peru and Chile, have good conditions to face these swings of the international economy”, stated the official who, at the same time, congratulated president-elect Barack Obama of the United States of America.

...

Click here to access the full article from Andina.com

2) Peru and Chile to become world economy locomotive machines according to Andina.com

Trujillo, Nov. 05 (ANDINA).- Peru and Chile will become world economy locomotives due to their economic dynamism and solid basis, and before the lower growth rate to be registered by United States and Europe as a result of the international financial crisis, Chile’s Finance minister, Andrés Velasco, said Wednesday.

“Emerging countries of Asia, Latin America, and Africa will continue growing next year, and in some way, they will become the locomotives of the world economy. Therefore, our voice is more important than ever, which is based on our own experiences and achievements", he said.

He pointed out that the international situation is difficult; however, Latin American countries like Peru and Chile have taken preventive measures and can face the financial crisis with their fiscal discipline and strong fundamentals, as well as with their high levels of investment, external balance, resources and liquidity.

...

Click here to access the full article from Andina.com

3) Peru's natural gas production rose 30.1% in January-October

Lima, Nov. 05 (ANDINA).- Peru's natural gas production reached 98,906.68 million cubic feet from January to October 2008, registering a growth of 30.01 percent compared to the same period last year, state oil agency PeruPetro reported Wednesday.

PeruPetro pointed out that the production increase was mainly because of greater consumption in electric power stations.

The average daily production of natural gas in October was 353.74 million cubic feet, which represents a reduction of 5.03 percent compared to last September.

...

Click here to access the full story from Andina.com

Souh-South Cooperation: Ecuador and Chile join forces to explore for gas in Guayaguil Gulf

“The board of Petroecuador has accepted the proposal for a new joint company with ENAP”, said Mines and Petroleum minister Galo Chiriboga in Quito.

The minister added that the new joint company will “boost gas exploration in the gulf of Guayaquil”, to the southwest of Ecuador where primary surveys have indicated the possibility of significant natural gas deposits.

Petroecuador is also involved in a similar undertaking with Venezuela’s PDVSA, with the purpose of searching for gas in an adjacent area in the gulf.

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Click here to access the full story from MercoPress

South American Energy in focus

Venezuela's PdVSA Reports Successful Oil Drilling Ecuador

A slew of energy developments in a handful of countries in South America has made headlines in the past day or so. For starters Venezuela and Ecuador made headlines this morning once again... this time for successful drilling and exploration in the Amazonian region. The newly established supply of crude will eventually be sent to the new refinery being build on the pacific coast.

Click here to access the full story from Rigzone.



Petrobras' Production Soars 3.3% More in June

Petrobras’ average oil and natural gas production abroad was 218,117 barrels of oil equivalent per day (boed) in June, 8.1%.

Added to the volume lifted from the domestic fields, Petrobras’ total production in June set a monthly record, topping out at 2,421,155 barrels of oil equivalent, 3.3% more than a year ago and 2.3% higher than May 2008.

Click here to access the full story from Rigzone.



Arduous Process of getting the Camisea facilities in Peru up and running
- Wood Snag 3-Year Maintenance Contract for Camisea Facilities

The Camisea Project comprises the exploitation The San Martin and Cashiriari fields natural gas fields, the construction and operation of two pipelines, one for natural gas (NG) and one for natural gas liquids (NGL) and the distribution network for natural gas in Lima and Callao. The pipelines wiII make NG and NGL available for domestic consumption and for export.

Natural gas wiII be transported to the main consumption center in Lima, where it will be used for residential and industrial purposes and to generate electricity, that will then be distributed nationwide through Peru’s existing transmission infrastructure (click here to read more about the Camisea Project)

Wood Group Production Facilities has been awarded a three-year, performance-based contract by Pluspetrol Peru Corporation to provide integrated maintenance services for the Camisea facilities in Peru. The Camisea project includes the largest natural gas field in the region.

Click here to access the full story from Rigzone



Shell to invest $300m in search for oil and natural gas in Peru

Royal Dutch Shell is ready to invest as much as $300 million in exploring for oil and natural gas in Peruvian waters as part of a agreement with BPZ Energy, executives from the two companies said Thursday.

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In March, U.S.- and Peruvian-owned BPZ found an estimated 60 million barrels' worth of crude oil and 40 million cubic feet of natural gas in the same region off Peru's northern Pacific coast.

The accord announced Thursday calls for Shell to spend up to $300 million on exploration and - if reserves are found - exploitation of natural gas, while BPZ will put the same amount into searching for crude oil along with an additional $150 million to build an electric plant in the area.

Under the deal, BPZ will get 51.75 percent of any oil or gas produced and Shell will claim the rest.

Click here to access the full story from Rigzone



Geopark Grabs up Additional Petroleum Block in Chile

GeoPark Holdings Limited announced that the Ministry of Mining in Chile has awarded the Otway Block in southern Chile to a consortium consisting of GEOPARK (42%), Methanex Corporation of Canada (16%) and Wintershall Energia SA, a division of BASF Ag of Germany (42%).

The Otway Block is a large new attractive exploration area (5,992 square kilometers) located in the Magallanes region near GEOPARK's Fell Block operation in Chile. GEOPARK is the first and only private-sector oil and gas producer in Chile and the addition of the new Otway Block will further enhance GEOPARK's position as the premier private-sector oil and gas operator in Chile.

Click here to access a previous post in regard to GEOPARK's natural gas discoveries in the Magallanes Region -- published on South-South Cooperation on June 17th, 2008.

Click here to access the full article from Rigzone



Colombia to create oil price stabilization fund

Colombia's government is creating an oil price stabilization fund (FEPC) that will be used to cushion domestic oil prices from unexpected rises on international markets, government news agency SNE reported.

Congress has approved the fund, which is included in the national development plan and must go to the president for final authorization. The finance ministry would administer the fund, which would receive financing from the existing oil stabilization fund (FAEP) owned by state oil company Ecopetrol.

Click here to access the full story from Rigzone

Brazil to Sell Oil Fields at Auction

Brazil will auction oil fields, except for the newly discovered pre-salt areas, authorities said Thursday.

Brazilian Basins

Brazil's National Agency of Petroleum, Natural Gas and Biofuels, a regulatory department for the industry sectors concerning the natural resources, will restart the eighth round of auctions of oil fields, which had been suspended by a court dispute, Minister of Mines and Energy Edison Lobao said.

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Click here to access the full article provided by Rigzone. Copyright (c) Xinhua News, 2008

Oil and Gas in focus: PDVSA Q1 profit rises 80% to usd $3.5 billion

PDVSA 1st quarter net profit shot up 80%, to usd $3.5 billion, up from usd $ 1.92 billion in the same quarter of 2007.

Although PDVSA's actual real performance might be difficult to predict due to various news agencies and the respective bias they carry when reporting on anything Venezuelan, PDVSA hard figures suggest some hope that Chavez is re-building Venezuela's delapidated and crumbling oil sector.

I am not down on the ground in Venezuela, but from the different Venezuelan-American's i've met, most claim any news they hear from their family and friends in Venezuela is highly bais depending on the individuals political ideology (pro-Chavez or anti-Chavez).

With this in mind I will include te major figures released by PDVSA today, and reported by Business News Americas (BNAmericas). To access the full article from BNAmericas click here.

-- Net profit: rose 80% ---> usd $3.5 billion from 1.92 bilion in 1Q07
-- Total revenue: rose 52% ---> usd $31.4 billion from 20.7 billion in 1Q07
-- Ebitda: rose 85% ---> usd $ 33.3 billion from 19.7 billion in 1Q07

-- Total costs: rose 38% to usd $24.3 billion from 17.6 billion in 1Q07

-- Revenues dedicated to social spending: up a whopping 376% to usd $2.68 billion from $565 million in 1Q07
-- PDVSA total contribtion to Venezuelan state: rose 112% to usd $7.39 billion from 3.48 billion in 1Q07

-- PDVSA oil production: rose 2% to 3.21 mb/d compared with 3.11 mb/d in 1Q07
-- PDVSA natural gas production: fell by 5% to 6.41Bf3/ d (181mm3/ d) compared with 6.73Bf3/ d in 1Q07

***NOTE *** the International Energy Association estimates Venezuela's production is actually close to 2.5 mb/d. Chavez did fire large numbers of workers in the oil sector whom he felt where not supporting his "Boliviaran Revolution." He also soon came to see them as a potential threat, lush with power and money from working in the oil sector, international connections, etc. He fired them all when he took a tough position during the country wide protests which paralyzed the country for about a year. When it was over, 1000's of PDVSA and other workers from the oil the sector found their traditional economic and political power was not able to dictate terms in Venezuela, and as they continued to push they found themselves jobless. 100's of Venezuelan's left to Texas, Miami, the Middle East in search of work in the oil sector abroad.

-- PSVSA recieved an average of usd $87.89/ barrel for exported crude, up 81% from $48.65/ barrel in 1Q07

-- PDVSA exploraton activities: focused on 23 exploration projects with the principle objective of investigation and confirming new reserves.

Energy in focus: China-US talk energy cooperation, while US House of Rep pushes national renewable energy plan and Bush moves to end offshore oil ban

Two developments in the energy sector warrant attention, and two which are unfolding in parallel with one another.

I apologize for a slowdown in updates as of recent, took a bit of a mental break yesterday and was dragged into the Eurocup 2008 when I should have been working.

First, headlines from most major media have reported Chinese and US leaders are meeting in Annapolis, Maryland to discuss energy cooperation. A positive move in the right direction, as described by the attendees, it is about the time to two largest net importers of energy discuss ways to better manage energy supplies and cooperation around the world for the general good of the global economy.

Visiting Chinese Vice Premier Wang Qishan (front L) shakes hands with U.S. Treasury Secretary Henry Paulson (front R) at the opening ceremony of the 4th round of China-U.S. Strategic Economic Dialogue in Annapolis, Maryland, the United States of America, June 17, 2008. China and the United States on Tuesday started here their 4th round of Strategic Economic Dialogue. (Xinhua/Yao Dawei) <-- click here for full story from Xinhua Media.



There is also talk in the House of Representatives for renewing a bill which promotes the development of more sources of renewable energy. As reported by C-SPAN

"Despite federal initiatives going back to the 1970's, renewable electricity makes up less than 3% of the generation mix in the U.S. Sen. Jeff Bingaman (D-NM) chairs a Senate Energy & Natural Resources Committee hearing to discuss the challenges and regional solutions to developing transmission for renewable-electricity resources."

Third, this morning good old President G. Bush made headlines saying he wants to lift the currently in place bans on offshore oil drilling. (See Reuters Article here)

In Washington, the White House press secretary, Dana Perino, said Mr. Bush would urge Congress to “pass legislation lifting the Congressional ban on safe, environmentally friendly offshore oil drilling,” adding, “The president believes Congress shouldn’t waste any more time.”

For a full report check out the article published by today's New York Times. You can view the complete article written by reporter Sheryl Stoleberg by clicking on this link.

My reaction from all these developments, is simply that every side is reacting irrationally to the fact we're paying 4+ / gallon at the pumps. Action does need to be taken, but as many steps forward in one direction, usually following the policy / plan of one side of the political spectrum (either Republican or Democrat), the other side has a tendency to denounce the other sides plans almost immediately. I am far from an expert on the US energy sector, so whether the democrats of republicans have a better plan to help the US with its energy demands, I truly do not know. However, it will definitely be better than Bush's promises that gas prices would go down after the war in Iraq... hehe

As soon as Bush made this proposal, of course Nancy Polosi immediately responded in kind, telling reporters "The president’s proposal sounds like another page from the administration’s energy policy that was literally written by the oil industry: give away more public resources to the very same oil companies that are sitting on 68 million acres of federal lands they’ve already leased.”

Natural Gas found in Chile! Discoveries in Magallanes Region! Reports Merco Press

For full article... please click here. Accessed from Mercopress on July 17, 2008

GeoPark Holdings Limited announced the discovery of two new gas fields in the extreme south of Chile, the Magallanes Region. The gas fields are on the Fell Block following the successful drilling and testing of the two new gas wells.

GeoPark drilled and completed the Nika Oeste 3 well to a total depth of 3,023 meters on a geological structure that had been re-defined following the interpretation of GeoPark’s 3D seismic program.

Approximately at 2,960 meters in an 11.5 meter perforated interval, gas flowed, without stimulation, at a rate of approximately 4.7 million cubic feet per day, 70 barrels per day (bpd) of condensate and 14 bpd of water with a well head pressure of 1,470 pounds per square inch (psi).

These are preliminary results and further production history will be required to determine stabilized flow rates from this well and the extent of the reservoir. Construction has been initiated on a gas pipeline to connect the Nika Oeste 3 well to GeoPark’s Kimiri Aike gas process and compression facility which connects with the regional gas infrastructure and the Methanex Corporation's methanol plant located 120 kilometers from the Fell Block.

The Bump Hill 1 well was drilled to a total depth of 2,979 meters with a production test at approximately 2,820 meters in a 4 meter perforated interval, flowed, without stimulation, at a rate of approximately 0.9 million cubic feet per day (mmcfpd) of gas, 5 bpd of condensate and 4 bpd of water with a well head pressure of 420 psi. Bump Hill 1 will also be linked to the Kimiri Aike gas processing facility.

Targeted completion of the two new gas pipelines is July 2008 with an expected increase in total sales production of 900 barrels of oil equivalent per day (boepd). GeoPark in its release states that it has drilled and successfully put on production seven new wells in Chile since its long term drilling program began in June 2007. Five other new wells have been drilled and are currently waiting for testing, sidetracking or remedial operations.

--- As always, with this site I like to convey development that grab my attention. Last minute inclusion of the above article is a result of a last minute click on "home" in my web browser-- prompting many news sites to load. One being Mercopress.com.

Macro-economic frenzy... expecations, natural disasters, inflation, union strikes? what more?

Couple headlines that have grabbed my attention in recent days.


1) Unions strikes

Unions representing truck drivers are striking across the globe from Spain to England to South Korea, in protest of rising fuel prices, eroded purchasing power of their salaries, and feeling generally marginalized in society.
http://www.allheadlinenews.com/articles/7011212516
http://english.chosun.com/w21data/html/news/200806/200806100014.html
http://www.bloomberg.com/apps/news?pid=20601102&sid=a_EyvKsmJHSM&refer=uk

Peru-- LATAM fastest growing economy in 2007, just recently became the #1 global producer of silver, stands as the #2 producer of copper next to its neighbor Chile, and is the #6 producer of gold in the world. Peru in other is booming thanks to demand for copper, fish meal, and other commodities from Asia, and, second from countries and investors seeking to use metals like gold as a hedge vs inflation. This morning Peru's unhappy workers, currently in protest, due to the government failing to pass a resolution which puts ceilings on the level of profit sharing allowed. 28,000 miners from Peru's biggest mining union have postponed their strike in various mines until June 30-- many silver, copper, zing and gold (Dow newswire, accessed via Resource Investor).
http://www.resourceinvestor.com/pebble.asp?relid=43447

2) Asia plummets
A string of disasters in what susposed to be a continued boom year for the Chinese economy have crippled and done a great deal of damage to the new emerging super power of the world. First with the worst snow storms in 60 years which hit Southern China earlier this year-- where most of the countries economic activity is conducted, then with the anti-china/pro-tibet protests which hit the world stage during their Olympic torch rally, and last--the recent horrendous earth quake that hit Sichuan province. China's exchanges where down almost 5% yesterday at night one point, however it did not lead to the crash of Feb/March 2007, when Chinese market corrections led the way in a short global correction in stock markets. It seems the financial systems of the world has priced in the downside of this years problems in China and general difficulties which will face Asia in the wake of rising food and energy costs.

3) All over the world countries are concerned about inflation. Worse, speculation on metals and other commodities isn't helping the $, still the most circulated currency on earth rally, which would ultimately be helpful to the global economy as a whole. Its scary to see fed officials from the US and even the EU coming out and making comments on inflation. What action will they take? What ramifications will it have?
http://www.foxbusiness.com/story/markets/bernankes-inflation-comments-push-futures-lower/
http://money.cnn.com/2008/06/10/markets/stockswatch/?postversion=2008061008
http://glickreport.blogs.foxbusiness.com/2008/06/10/intervene-already/

What to make of all of this? Well i'm going with the plan of finding a few equities I feel are not still over-valued and are in a good position to retain market position and keep earnings expectations due to their unique business and or market niche. Follow emerging markets and where they head-- as the olympics get underway I'm still confident Asia will have a rally, but if the general health of financial systems of the globe don't improve before then it will be a short lived rally. Follow the price of energy and forecasting the future of emerging markets and the general global macroeconomic health of the world economy will be easier to follow. Inflation in food stuffs is also key... Rising oil and energy prices may hurt everyone-- especially the poor, but when even food is sky rockets in price, the people of the emerging world will feel it extra hard, potentially leading to further slow downs and social instability in countries.