by Charles Hugh-Smith
Commodities could rise even as global demand sags.
The conventional wisdom of the moment is that a weakening global economy will push the cost of commodities such as oil down as demand stagnates. This makes perfect sense in terms of physical supply and demand, but this ignores the consequences of financial demandand capital flows.
I wrote this essay for Peak Prosperity about three weeks ago, before the revelations of investment bank speculation in commodities [...]
The Mechanism That Holds Chinese Banks Together Is Falling Apart
China’s seven day repo rose to a record high of 10.77% in Shanghai, the highest since March 2003, according to Bloomberg*.
Meanwhile, the one-day rate hit a record 12.85%. And Zerohedge reported that overnight repo hit 25%.
The liquidity squeeze in China first began ahead of the Dragon Boat festival earlier this month. Spikes in interbank rates are common right before holidays.
But Diana [...]
McDonald’s Asia Brings Down April Comparable Store Sales
Here’s the regional breakdown:
U.S. up 0.7% (Est. down 0.05%)
Europe down 2.4% (Est. down 1.01%)
Asia/Pacific, Middle East and Africa (APMEA) down 2.9% (Est. down 1.44%)
“In April, APMEA’s comparable sales declined 2.9%, reflecting the impact of Avian influenza, primarily in China, and softer results in Japan and Australia,” wrote the company.
Read more: http://www.businessinsider.com/mcdonalds-april-comparable-store-sales-2013-5#ixzz2Shss0jqs
McDonald’s Sales Slip 0.6% in April
CHART OF THE DAY: It Doesn’t Take A Genius [...]
What “Dr. Doom” Marc Faber is thinking now
“I do not trust the banking system…”
First, I am discussing capital flows and the general belief among some economists that trade and current account deficits do not matter because the money flows back in the form of investments in equities, bonds, real estate, direct investments, and corporate takeovers.
According to Barron’s Big Money Survey, “74% of large portfolio managers are bullish about stocks, which [...]