Copper data dump

I've been building up some copper related links.  Here it is:

Majority of Chile's export currency comes from copper
http://www.businessweek.com/news/2010-02-15/chile-copper-exports-doubled-in-january-on-price-gain-update1-.html

LME is rasing storage rates on inventory.  Why do this if there is a paucity of material?  High demand raises prices, low demand lowers prices
http://agmetalminer.com/2010/02/12/lme-rent-increases-could-prompt-flood-of-metal-taken-off-market/

Good overview of Copper fundamentals
http://www.wildebeests.net/2010/03/02/investing-in-copper-what-you-need-to-know/

Commodities as a financial asset.  While the article is about Aluminum the same mechanism is under way in copper, oil, etc.
http://seekingalpha.com/article/190993-a-slow-motion-cornering-of-global-commodities-markets


From March 2,  2010 Fast Money
The folks on the desk suddenly noticed copper inventories in China surging.  I'll have more on this later but the trend has reversed declining and is starting to work back up again . . .  Copper discussion starts around 5:25 and goes to 10:40

Copper inventories going up in China. 

A good article and reference on cancelled warrants:
http://agmetalminer.com/2010/03/18/when-cancelled-copper-warrants-aren%e2%80%99t-what-they-seem/


Copper mine strike in Mexico deemed illegal, the cops may be brought in to bust the strike.
Mine is partially owned by Southern Copper, produced 166k tonnes in 2006
http://www.reuters.com/article/idUSN113373720100212
http://en.wikipedia.org/wiki/Cananea_mine#Economy

China tightening rules on home purchases

Recently China has tightened rules regarding home sales:

Banks can refuse loans on 3rd homes.  (wow, THIRD HOMES)
Down payments on second homes have been increased from 40 to 50 percent.
Mortgage rates have been increased.
Developers can no longer take deposits on unfinished homes without proper approval and other rules designed to mitigate keeping housing supply off the market.

China Daily article  2010 April 19

Bloomberg article 2010 April 20


Let's see if this works  . . .

A contrary opinion on HELOC's and banks

I recently posted an article about the concern HELOC's may have on bank capital positions. Here's a contrary opinion from another blog I follow, Calculatedrisk

The following report is from housing economist Tom Lawler:
In a House Financial Services Committee meeting today on “Second Liens and Other Barriers to Principal Reduction as an Effective Foreclosure Mitigation Program, spokespersons from BoA, Citi, JPMorgan Chase, and Wells Fargo explained the potential dangers of broad principal reductions, as well as tried to dismiss the silly claim that many second mortgages have “virtually no value” because so many borrowers with seconds have total mortgage balances at or exceeding the value of the home collateralizing those mortgages. Below are some observations on BoA’s and Chase’s testimony.

I'd read the whole article as it provides some counter points to my previous post. 

Greek bond yields widen further

Greek bond yield widened further today, blowing past the pre bailout highs.  The attached chart does not show today's print which was 7.61% 

Goldman Sachs' news has overwhelmed the news cycle while Greece slowly sinks . . .

Some Friday Links -- Fun for all. A physics lesson tossed in as well.

Been busy with tax day but here's some links and comments . . .

Greece 10 year bond yields keep rising and are very close to piercing pre bailout yields. 
Some German profs are preparing a lawsuit.  -- Telegraph.co.uk
Has Greece hit the Chandrasekhar limit and just doesn't know it yet?  Once you go passed the limit there is no turning back.

Some back and forth on strategic defaults fueling consumer spending:
Pro Tinfoil: Creditwritedowns
Anti Tinfoil: The Big Picture

Creditwritedowns pulls together a lot of subjects and puts a nice bow on top describing a theory I agree with:  We are in a balance sheet recession that will not produce a strong rebound and will take a long time to reconcile.  I posted the Koo and Chanos videos recently but Mr. Harrison does more work tying it all together. 

Total copper inventories have now risen for 2 weeks straight and are close to penetrating their recent peak level; LME inventories have dramatically slowed their decline and Shanghai inventories hit new highs today.  Copper's getting smacked today.  I'll write more about this soon(tm).

Inflation update - - The slow slide continues

Inflation numbers were just released and continue to show the slow slide downwards in core CPI numbers.    I modified the chart to highlight core CPI.  As you can see it is still trending downwards along with the housing subcomponent. 

Core CPI touched the 1% yoy level in 2004.  Considering the direction of core CPI we may penetrate that lower level soon(tm)

Housing CPI is still deflating and I don't see that changing anytime soon.

While headline CPI is still higher than core I don't foresee it rising too much more without putting a serious dent in the economy.  $150 oil helped knock the economy over last time and if oil prices continue to rise it will start to crimp the economy again.

German legal threats may ruin Greek aid

As I mention on the side bar to the right the German courts may not approve of aid to Greece.  Here's the details (Reuters)

Greek 10 year spreads widened Tuesday and Wednesday after the weekend announcement of aid to Greece.  If this trends keeps up bond spreads will very quickly be wider than before the aid announcement.

I have no idea how much longer this can go on.  The IMF may swoop in and provide their share of the funding immediately or a political showdown in Germany may resolve the lending issue.  Even if aid does arrive will it do any good?  They are so far in debt that some sort of default / currency depreciation (that means leaving the euro) may be the only solution.

ht Credit Writedowns