Vietnam and the Philippines are pushing forward oil and gas exploration projects in areas of the South China Sea claimed by China, risking clashes in one of the world’s busiest shipping corridors.

State-owned PetroVietnam’s partner Talisman Energy Inc. (TLM) aims to begin drilling next year in a block that China awarded to a U.S. rival and has protected with gunboats. Ricky Carandang, a spokesman for President Benigno Aquino, said the Philippines plans to exploit a field in an area of the sea where Chinese patrol boats harassed a survey vessel in March.

The neighbors of China, which has Asia’s largest military, were emboldened after the U.S. asserted interest in the waters last year, said James A. Lyons Jr., a former U.S. Pacific Fleet commander. A surge in crude prices to near $100 a barrel also spurred Vietnam and the Philippines to pursue the oil needed to meet economic growth targets of at least 7 percent this year.

FULL STORY

The spread between Brent and WTI crude is nearly $15 per barrel.

Bad trade.

(Reuters) – Britain’s billionaires are more likely than their U.S. counterparts to have made their own money rather than inherited it, a study has found, challenging popular perceptions of greater social mobility in America.

A survey by French bank Societe Generale and Forbes of super-rich people in 12 countries, many of whom are billionaires, found 80 percent of the British sample entirely “self-made,” as opposed to inherited wealth or a mix of both.

FULL ARTICLE

(Reuters) – The day after bringing its biggest case of oil market manipulation ever, a U.S. regulator warned those trying to rig the commodities markets that they will be hunted down.

“We’re watching and we’ll come and get you,” warned Bart Chilton, a commissioner for the U.S. Commodity Futures Trading Commission.

Chilton’s comments came after Arcadia, one of two firms sued on Tuesday for allegedly reaping $50 million by illegally manipulating oil markets in 2008, pledged to fight the CFTC.

FULL ARTICLE

It is when, not if. Financial markets merely aren’t sure whether it’ll be tomorrow, a month’s time, a year’s time, or two years’ time (it won’t be longer than that). Given that the ECB has played the “final card” it employed to force a bailout upon the Irish – threatening to bankrupt the country’s banking sector – presumably we will now see either another Greek bailout or default within days.

FULL ARTICLE

It is no secret that Zero Hedge follows every utterance by Goldman Sachs (Morgan Stanley, not so much – it is sad just how irrelevant MS has become when it comes to swaying any opinion at all) as pertains to the firm’s outlook on various commodities, simply because by the very nature of the firm’s trading operations, whereby its prop desk (yes, Goldman’s prop desk is alive and well) controls a substantial amount of the actual commodity outstanding (in either paper or physical form) and then advises clients to do the opposite of what the firm itself is doing. In essence: using its economy of scale (or monopoly, however one wishes to define it), Goldman can sway the market this way and that with one simple “client” note. The recent fiasco whereby Goldman downgraded Brent on April 12 only to upgrade it two days ago, using the very same assumptions, is nothing more than just the latest example of what we have claimed over and over is outright market manipulation. Today, we find we are not alone after Oppenheimer’s Fadel Gheit accused the firm of precisely the same thing on Bloomberg TV: “Unfortunately, without repeating the names of the brokers, everybody knows who the usual suspects are. These are the people in 2008 that were making a bet on $200 oil. This is another form of market manipulation in my view. Whether or not they are influencing the market and manipulation could be a stronger word, but they are influencing the market. They are doing things that could be beneficial to them but harmful to the rest of us. That is where government comes in and says stop, enough. You have a Ferrari or a Maserati and can go 120 mph, but guess what? Those of us who can only go 60 miles per hour will be pulverized. That is where the government has to come in and say there is a speed limit here, but that is not happening.” Of course, if Oppenheimer was large enough and influential enough to do what Goldman does, we are 105% confident Fadel would be singing a totally different tune.

FULL STORY AND VIDEO HERE

Down 0.5% as you read this.

As a result, futs are up 4.

No. Ticker % Change
1 AGQ 6.56
2 PSLV 4.67
3 ERX 4.28
4 BDD 4.15
5 CTNN 3.96
6 SGG 3.71
7 LD 3.67
8 UCD 3.61
9 DYY 3.48
10 UYM 3.45
11 PXJ 3.44
12 UCO 3.27
13 SLV 3.27
14 GAZ 3.23
15 DBS 3.14
16 XES 3.13
17 DIG 3.11
18 NIB 3.03
19 TNA 2.98
20 DAG 2.86
21 XIV 2.82
22 SOXL 2.79
23 EGPT 2.66
24 IEZ 2.56
25 EPU 2.53

Full Article

He was 65.

ECB’s Noyer Rejects Greek Restructuring as ‘Horror:’ Transcript

The following is a transcript of remarks made by Christian Noyer, governor of the Bank of France and a member of the European Central Bank’s governing council. He spoke to journalists in Paris today.

The first section constitutes a statement made by Noyer. The remainder is from a question-and-answer session. Noyer spoke in French.

“If we restructure Greek debt, that means Greece defaults.”

“And what are the consequences of a default? The banks with the most Greek bonds are Greek banks. The Greek banks themselves will be badly damaged. When the banking system is stricken, what do you have to do to prevent the financing of the economy from collapsing? You have to recapitalize the banks. Who will recapitalize the Greek banking system? The Greek state.”

“That means the Greek state will gain nothing. It will invest in the banking sector everything that it has gained in the restructuring.”

“Next there are the Greek insurers and pension funds” who will be hurt. “That means it will weigh on the Greek population’s savings, which could cause a drop in consumer spending and Greek growth will take a hit. This counters the Greek recovery.”

“Then, what else is there in terms of Greek creditors? There’s the European public sector, European governments and the central banks. This is directly tapping the European taxpayer.”

“If we make European states pay, the mechanism of European financing will stop immediately. The states will not continue putting their taxpayers’ money on the line when their loans have just been cleaned out, when they’re taking losses on the money they’re lending. So that’s the end of support from other European states.”

“And for the central banks, what happens? Greek debt will become debt that is no longer worth anything. It’s no longer debt that can be considered as sufficiently safe for operations in the Euro System. That means by definition that to restructure is to become ineligible as collateral. If it’s ineligible, then it means a large part of what the Greek banks bring as collateral for refinancing can no longer be used. That means the Greek banking system can no longer be financed.”

“The next day what happens? Greece needs to find investors because the Greek state won’t move from deficit to surplus overnight. As long as it doesn’t have a primary surplus, the Greek state needs to borrow. International investors, that small group that remains, have just been restructured. It’s not the next day they’ll come back with financing.”

“The Euro System won’t refinance. The European states won’t finance. The IMF won’t go there alone. No one will finance the Greek state in coming years. That means the meltdown of the Greek economy. This is a horror story. That’s why we’re against a restructuring.”

On rescheduling of debt:

“The lengthening of maturities brings very difficult legal questions. There’s a strong chance it will be the equivalent of a default.”

On austerity, asset sales:

“There is another possibility, which is to apply the program. To reduce the stock of debt, the only solution is ambitious privatization. There is no other solution.”

“When we’re in a monetary union and you need to restore your competitiveness, it is necessary to have the equivalent of an internal devaluation. Cut production costs. There is no other solution.”

“The budget adjustment that is being asked for — they’re difficult measures but they’re doable. The IMF has been doing these programs for years. It knows what is doable.”

“Restructuring is not a solution, it’s a horror story. You have to make decisions that are in the interest of the country and its citizens. The best option is the program.”

“Time isn’t a way of lightening the program. A bit more time may be necessary. The program might be longer. The measures are necessary in any case. It’s the same effort over more time.”

“We won’t convince other European countries or the IMF to provide support unless there is a strict application of the program.”

On the ECB refusing Greek debt as collateral:

“What is the fundamental principle that we have to observe? We must, in monetary policy operations, refinancing, take sufficient guarantees. All the central banks of the world do this. You need good-quality collateral. You set the bar at a certain level. We took a simple rule. You need single-A debt as a minimum.”

“During the crisis, given pressure on assets, we accepted temporarily to reduce our minimum level of collateral to BBB. Then the sovereign-debt crisis arrived, the Greek crisis, ratings cuts for Greece.”

“We decided at that moment that when there is a European Union-IMF program that we support, we considered” the assets “were the equivalent of BBB. If the program is no longer respected, if a country is found off track, immediately our assumption of BBB disappears. If it goes out of the EU program, the collateral is ineligible.”

“If the debt is restructured, you can’t say it’s debt of good quality. We need collateral of very good quality. It’s a simple application of reasoning. Ipso-facto, the collateral can no longer be accepted.”

“Don’t think for a minute that we’re against restructuring because French and German banks have Greek bonds. The problem is for Greece itself.”

To contact the reporter on this story: Mark Deen in Paris at [email protected]

Original story

SCAMS

No. Ticker YTD Return Industry
1 SBAY -77.90 Chinese Burritos
2 CBEH -74.90 Chinese Burritos
3 HEAT -69.70 Chinese Burritos
4 DGW -69.62 Chinese Burritos
5 GFRE -66.04 Chinese Burritos
6 RCON -65.38 Chinese Burritos
7 CVVT -65.17 Chinese Burritos
8 KGJI -63.97 Chinese Burritos
9 KNDI -63.00 Chinese Burritos
10 FEED -62.59 Chinese Burritos
11 SCEI -59.61 Chinese Burritos
12 XNY -59.17 Chinese Burritos
13 CNET -59.16 Chinese Burritos
14 PUDA -57.89 Chinese Burritos
15 CHGS -57.48 Chinese Burritos
16 CSKI -56.53 Chinese Burritos
17 OINK -55.20 Chinese Burritos
18 SIHI -55.17 Chinese Burritos
19 NEWN -54.46 Chinese Burritos
20 HSFT -53.68 Chinese Burritos
21 YONG -52.98 Chinese Burritos
22 BSPM -52.84 Chinese Burritos
23 CIIC -52.72 Chinese Burritos
24 MCOX -51.55 Chinese Burritos
25 CNAM -51.29 Chinese Burritos
26 SHZ -50.95 Chinese Burritos
27 CAGC -49.06 Chinese Burritos
28 SCOK -48.12 Chinese Burritos
29 HOLI -47.96 Chinese Burritos
30 LFT -47.68 Chinese Burritos
31 CHBT -46.46 Chinese Burritos
32 CCSC -45.26 Chinese Burritos
33 LZEN -45.18 Chinese Burritos
34 CIS -44.57 Chinese Burritos
35 AMCN -44.27 Chinese Burritos
36 AOB -44.17 Chinese Burritos
37 DHRM -43.43 Chinese Burritos
38 CCIH -43.08 Chinese Burritos
39 CAAS -42.29 Chinese Burritos
40 CMFO -40.93 Chinese Burritos
41 HPJ -38.60 Chinese Burritos
42 SORL -37.98 Chinese Burritos
43 CGA -37.78 Chinese Burritos
44 GU -37.48 Chinese Burritos
45 XING -37.46 Chinese Burritos
46 MY -36.91 Chinese Burritos
47 CHC -36.67 Chinese Burritos
48 VIT -36.51 Chinese Burritos
49 SUTR -36.11 Chinese Burritos
50 TSTC -35.88 Chinese Burritos

They are exiting the business of mortgages.

Dan Dicker could be forgiven if he hooted in vindication as crude plunged 15 percent in the first week of May. He concluded long ago that petroleum prices have become “just nuts,” as he says in “Oil’s Endless Bid.”

Oil markets are defying the normal laws of supply and demand, he argues in this timely book, and a large share of the blame belongs to Goldman Sachs Group Inc. (GS), Morgan Stanley (MS) and other banks. A longtime floor trader, he brings valuable insights to bear on a contentious subject that affects us all.

Dicker spent 25 years trading crude, natural gas, unleaded gasoline and heating fuel at the New York Mercantile Exchange. Bit by bit, he saw Goldman — “the devil to be feared,” he says — and its Wall Street brethren muscle into a sleepy market that was once dominated by oil companies seeking to hedge the risks of physical assets.

Soon a flood of “dumb money” from investors was gushing into funds pegged to the Goldman Sachs Commodity Index, he says. This high tide of cash, totaling billions of dollars, exerted an upward price pressure on oil that burdens American business and threatens to derail a U.S. economic recovery.

“We are all invested in oil, whether we like it or not,” he writes.

‘Peak Oil’

Dicker understands the prevailing wisdom about high oil prices yet remains unimpressed. Has he noticed how the rise of China and other emerging nations has driven up demand? Yes, he has. Is he ignoring evidence that the planet will one day run out of cheap, easily tapped black gunk? No, he’s not.

He says he believes in “peak oil,” the theory that petroleum production will inevitably peak, plateau and decline. Yet when he examines this and other explanations for recent energy-price spikes — a falling dollar, for example — he concludes that they amount to “a bad alibi.”

His argument, brutally compacted, goes like this: Oil today is overpriced, driven ever higher by the new flow of money funneled through investment banks, energy hedge funds and exchange-traded and index funds. Feeding the frenzy are bets from the same kind of American investors who moan about paying almost $4 a gallon to fill up their SUVs.

This new dynamic has led to wild fluctuations, Dicker says. Remember how oil surged in 2008 to more than $145 a barrel in July, only to plunge to less than $34 by late December?

“Nothing proved a speculative bubble more convincingly than the rapid price collapse we saw then,” he writes.

‘Assetization’

In swaggering prose, Dicker marches us through momentous changes that began rocking oil markets a decade ago. Chief among them is “the assetization of oil,” his infelicitous term for new instruments — think commodity index funds –that make investing in petro prices as easy as buying stocks.

Dicker frowns on this. Just because everyone can now trade oil — Mom, Pop and Aunt Erma, too — doesn’t mean they should, he argues, determined to dissuade the very people who are most likely to buy his book. The notion that we can invest in oil as if it were a stock or bond is “the single most diabolical source of our pricing problem,” he writes.

Oil isn’t a stock or a bond. You don’t get dividends, interest or a way to reinvest profits and compound returns, he explains. All you get is a wager on oil prices — a futures contract with a short shelf life. Your bet “self-destructs every 30 days,” as Dicker says.

Barrels on Doorsteps

Many people, heeding the growth of emerging nations, peak- oil arguments and the upheaval in Libya, are betting oil will go up. Being accustomed to stocks, they want to buy and hold. The only way to do that, unless you want a contract for 1,000 barrels of oil delivered to your doorstep, is to roll your position over by retiring an old contract and initiating a new one with a later expiration date.

This may expose you to a tax liability, not to mention commissions and fees on two trades (for getting out and getting back in). Imagine, too, what happens when commodity index funds roll their positions all at once, as they do on certain days each month. This mechanical reset is called the Goldman Roll, after the Goldman Sachs Commodity Index. It winds up amplifying any fundamental arguments for higher prices, Dicker says.

Can this be fixed? Yes, says Dicker, though his solution would mean forbidding most individuals from trading oil (and handing some clout back to pros such as himself). If he had his way, commodity index investing would be banned, along with exchange-traded funds that engage in futures.

Nostalgia for “the good old days of oil trading” tinge this book, which is enlivened with memories of “standing shoulder to shoulder with another 120 sweaty, smelly traders.” Yet it’s the future, by this account, that may really stink.

The cover jacket of “Oil’s Endless Bid: Taming the Price of Oil to Secure Our Economy” by Dan Dicker. Source: Wiley via Bloomberg

Dan Dicker, author of “Oil’s Endless Bid: Taming the Unreliable Price of Oil to Secure Our Economy.” Source: Wiley via Bloomber#

FULL ARTICLE

No. Ticker % Change
1 YNDX 43.04
2 SIFY 39.84
3 FPIC 28.82
4 REVU 25.00
5 HRZ 23.33
6 RVI 16.41
7 DSW 16.32
8 SQNS 15.09
9 LMLP 15.07
10 TNE 14.86
11 CCIH 13.24
12 MRNA 13.04
13 NEWN 12.28
14 LEXG.OB 11.50
15 BTM 10.31
16 REDF 10.04
17 OMEX 9.91
18 ZA 9.03
19 HDY 8.85
20 PWRD 8.85
21 CNTF 8.55
22 BPHX 8.21
23 NZT 7.62
24 HSOL 7.47
25 OGXI 7.47
—————————
No. Ticker % Change
1 MCOX -22.98
2 CNET -15.53
3 INVE -14.46
4 CHBT -13.53
5 ANO -9.71
6 MOBI -9.61
7 CBRL -9.58
8 LPHI -8.99
9 CWTR -7.69
10 OPXT -7.34
11 HOLI -7.11
12 LCAV -6.99
13 VIT -6.81
14 VICL -6.81
15 FRO -6.72
16 HSWI -6.58
17 ANCI -6.21
18 RP -6.16
19 CBAK -6.06
20 PPHM -6.05
21 LNET -5.95
22 HTWR -5.88
23 CIS -5.80
24 OSG -5.76
25 PWAV -5.74

Full Article

Spreads are up 4% to $24.64 this morning, thanks to a push higher in gasoline.