The ructions in China have had an interesting effect on commodities prices – good for gold, crappy for copper. And more developments in this area should be expected as the market deals with growing weakness and the threat of a deflating credit bubble coming from the massive lending to various sectors in the world's second-largest economy. Copper has been rather weak of late, but the broader CRB commodities index is actually much higher on the year. This is the biggest divergence since the eurozone debt crisis in 2011, points out Ashraf Laidi, the chief global strategist at City Index in London.
from Global Investing:
It's the economy, stupid. Or isn't it?
Brent crude has risen 15 percent since the end of last year, focusing people's minds on the potential this has to choke off the recovery in world growth. But some reckon it is the recovery that's at least partly responsible for the surging oil prices --- economic data from United States and Germany has been strong of late. There are hopes that France and the United Kingdom may escape recession after all. And growth in the developing world has been robust.
from Reuters Investigates:
By Rebekah Kebede
You wouldn't think you'd have to make hotel reservations months ahead of time in Karratha, a small, dusty town on the edge of the Outback a 16-hour drive from Perth, the nearest city. But with Australia’s commodities boom, Karratha is bursting at the seams and nowhere is it more apparent than when trying to find a place to stay.
from Environment Forum:
This month, Vedanta Resources and subsidiary Sterlite Industries (India) Ltd. made headlines for posing a public health risk to the surrounding community in southern India with pollution from a large copper smelter. They share the top spot in this issue of The Green Gauge, a breakdown of companies recently in the news for winning or losing credibility based on environment-related activity.
from Afghan Journal:
Afghan authorities have organised a roadshow in London that opens on Friday aimed at drumming up interest in the country's mineral wealth variously estimated at anything from $1 trillion to $3 trillion.
Anglo American hasn't yet received a formal bid from Xstrata. But the miner's interim results read very much like a defence document.
The highlights alone give a pretty good idea of what chief executive Cynthia Carroll and new chairman John Parker will focus on if Xstrata does eventually pounce.
Anglo's case hinges on four things.
First, that its plan to cut $2 billion of costs by 2011 is ahead of target. Second, that it is getting on top of its $11 billion net debt, and third, that progress is being made in restructuring its problem child Anglo Platinum <AMSJ.J>. Lastly, Anglo acknowledges that it is an objective to reinstate the dividend.
Added to these elements, lest they appeared to have too defensive a flavour, is the promise of growth, largely through its Minas-Rio iron ore project in Brazil and its Los Bronces copper development.
Of these, cost savings are a crucial point of contention in the Xstrata debate, with the rival miner's chief executive Mick Davis confident he can squeeze a further $1 billion out of a combination with Anglo, taking the total to $3 billion.
Anglo isn't making any promises beyond those already given but the tone of the language -- which includes talk of being ahead on "asset optimisation", procurement and job reductions -- hints that it may be able to find more savings on its own, without handing anything to Xstrata.
So far the market seems largely happy to let Carroll stick to her plan -- highlighting Anglo's leading position in platinum, diamonds and iron ore alongside its cost cutting success. But investors might ask more searching questions in the event that Xstrata did come back offering a premium.
from Financial Regulatory Forum:
By Rodrigo Martinez
SANTIAGO (Reuters) - Finance ministers from the Americas and leaders from multilateral lenders will huddle in Chile on Friday to evaluate their responses thus far to the global economic crisis and figure out the way ahead.
Chilean Finance Minister Andres Velasco told Reuters that turbulence has shown the International Monetary Fund and World Bank need more resources for the slump.
He also said he hopes the elected government of Honduras will be represented at the meeting in Chile after a military coup in the Central American country on Sunday that has been widely condemned by the international community.
"We will discuss counter-cyclical fiscal policies and the impact these have had," Velasco said of the meeting in the Chilean coastal city of Vina del Mar, which is being held as economies in the region suffer their sharpest downturns in years.
"Secondly, we need to think about how we can prepare countries for the post-crisis world. This implies taking steps to improve productivity and, for example, financing for infrastructure and construction."
Chile, the world's No. 1 copper producer, has won praise for building up savings from high metals prices during boom times and using the cash for an economic stimulus package.
Top executives from the World Bank, International Monetary Fund and the Inter-American Development Bank will also be at the meeting.
Some countries in the region have looked for credits from multilateral lenders to help weather the crisis.
"It's important for the IMF, for example, to have the resources in the short-term so that countries don't have liquidity problems -- Chile hasn't had trouble but other countries have," he said.
"The World Bank and IADB should also have more resources so they can loan out money faster for infrastructure and productivity programs."
SUPPORT FOR HONDURAS
Velasco was asked if finance ministers would issue a statement supporting ousted Honduran President Manuel Zelaya.
"There is a widely shared commitment to preserving democratic institutions in Honduras and this means that I hope the democratic government of Honduras can be represented at the meeting," he said.
World Bank President Robert Zoellick said on Tuesday that the lender has "paused" all loan programs to Honduras because of the political turmoil there.
Friday will be the second meeting of finance ministers from the Americas after one held in Mexico in 2008. (Editing by Leslie Adler)