Global Macro Perspectives
I try to post diverse opinions (too much Marc Faber lately), but this video is so fun, especially seeing CNBC hosts so shocked with Marc Faber views that they lose the ability to ask any kind of questions.
The wording on strength of economic recovery is upgraded (“economic recovery is on a firmer footing”). Some improvement in labor market recognized.
Energy and commodities rising prices effect on inflation downplayed.
Empire State Manufacturing General Business Conditions Index for March came out at 17.5 vs. 16.1 consensus and prior reading of 15.4.
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Things got much worse during the night…two additional reactors exploded and radiation got out to atmosphere.
My thoughts are with the earthquake and tsunami victims in Japan. If you would like to help, you can make a donation via. the International Federation of Red Cross and Red Crescent Societies (IFRC) web site.
“It’s quite striking how complex civilizations can fall apart really, really quickly… we seem at the moment, bombarded by shock events,” Niall Ferguson, Professor of History at Harvard University and author of ‘The Ascent of Money’ told CNBC on Western civilization.
Fukushima I Nuclear Power Plant Reactor 3 explosion on March 14, 2011.
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Baltic dry index rose 16.0% last week; Capesize Index was up 32.5%; Panamax Index rose 7.5%; Supramax Index increased 4.2%; Handysize Index was up 3.7%.
Judging from increase in dry bulk rates and an end of raw materials stockpiling economic activity in China is accelerating after the holidays. Iron ore, steel and thermal coal prices down on increased stockpiles.
Number of crude oil drilling rigs rose for 26; Number of natural gas drilling rigs fell for 17.
On world scale number of oil & gas drilling rigs rose for 100 in February.
Baltic Dirty Tanker Index fell 1.9%; Baltic Clean Tanker Index was unchanged.
Japan earthquake effects: I seems that Japanese crude oil demand will initially fall because one fifth of Japanese refinery capacity is offline, but subsequently will rise fast because only possible substitution to nuclear electricity generation (one fourth off-line and years needed to bring it back on-line) is gas and oil-fired generation. Product demand (residual fuel oil and diesel fuel especially) will rise fast in coming days.
To sum up, near term positive for product tankers, negative for crude oil carriers. Longer term positive for both. Positive for LNG carriers.
Richard Koo on Japan “lost decade” experience and lessons learned on balance sheet recessions and quantitative easing.
U.S. retail sales were reported at 1.0% in February, right at consensus. January reading was at +0.7% (revised from +0.3%). On year level retail sales are up 8.4%.
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