High oil prices are blaming speculators and Bernanke

By Ed Wallace

Watch autour of Dallas and Fort Worth traffic, you would never know that the United States had any kind of crisis of gasoline. Many drivers on motorways apparently believe that Texas has already approved the speed limit proposed 85 mph.

Most don't realize that driving a vehicle that is rated at 30 mpg on the road at 85 miles an hour will reduce its consumption of fuel by about 35 percent. What is the gas that they are currently paying $3.79 cost $5.11 in reality. It is reasonable to assume, too, that if we really interested in the cost of gas, we would do everything we could to limit the damage costs. This is not. Complain about price but seem reluctant to do anything on their subject.

Americans think that they know who to blame for the high price of gasoline. The usual culprits are people who drive too fast, inefficient engines, OPEC, and even China. Of course, those who are all factors, but it's like the blame of the housing bubble on the timber industry or a glut of carpenters. It is not a great mystery that is responsible for the increase in gas prices. As I and others have written in the past, the greatest culprits are speculators, the futures markets to their own pockets of game. We all know that. What may come as a shock is that they are facilitated by the Federal Reserve.

This explains why the market for oil and gasoline currently costs consumers and the industry much more than necessary. Until recently, it was impossible to say if speculators were accurate in telling the media this strong world demand for oil has caused prices on the arrow again, pushing the gasoline prices $1 per gallon above where they were at this time last year.

It is true that rail traffic is up in the sign of a strengthening economy U.S.—a - and it is also true that the cargo around the world are back to pre-Great volumes of recession. However, MasterCard (MA) and some oil analysts are saying that domestic consumption of gasoline fell anywhere from 3% to 3.7% in the last five weeks; for a country which burns sometimes 400 million litres of petrol per day, this is no drop. In the future trading, such a decline in demand should perform a reduction in the costs comparable to what buyers are willing to pay for fuel for resale. That does not occur.

During this time, the media continue to say that gasoline prices are directly related to the pricing of oil, which is not quite true. Oil and gasoline are sold to different sets of buyers. It is necessary to buy crude for refining and sells gasoline retail; It is legitimate hedgers. Then there are speculators, who jump on the market for profits on all fuels. To prove once more that in the investment banking business, really nothing is known of oil, Goldman Sachs (GS) advised customers on 11 April to get rid of their holdings of commodities, including oil. The guardian cited Goldman advice as warning: "record level of speculative trading of crude pushed their prices so much in recent months as short-term, reward risk promotes it is more required of these products.".

"Save levels of speculative trading of crude" have pushed oil prices? Funny, all we have heard is that the price of oil of today are justified due to unusually large demand, the growth in the economy of the world.

The same day, the Financial Times reported that in March, the Saudis "strangles back their oil production" - which seems to contradict their promise to replace all oil lost to global markets because of the Libyan Revolution. According to analysts, the Saudis produce a supplement of 300,000 barrels per day, which is enough to satisfy buyers. This assessment is certainly true in the United States. We started this year with 333 million barrels of oil on part. Today, we have 359 million barrels. Some shortages.

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Based on the Japan Apple puts sales at risk as prices rise

April 20, 2011, 12: 15 pm EDT by Adam Satariano

April 20 (Bloomberg)--Japanese land and the tsunami earthquake probably will weigh on forecasts of Apple Inc. to make a profit in the third quarter, sale prices and gross margins high component and disrupted manufacturinganalysts said.

At least seven analysts expect the disaster to affect the prospects of the company later today. The Japan is a hub for several components of Apple, including flash memory, battery, touch screen glass and resin used to attach the chips. The company, which makes the iPhone, the iPad and the Macintosh computer, has not yet discussed the effects of the earthquake of magnitude 9 on March 11.Apple, the largest company of the market value of technology, was already struggling with shortages of supply when the earthquake. The iPad 2, which begins on the day of the earthquake, sold in many stores. Apple also introduced a version of its iPhone 4 for customers of Verizon Wireless in the last quarter, triggering a further increase in demand. Investors seek to report earnings in the second quarter of today and forecast for judging if aid shortages put a dent in sales. "" People want to know how strong is the supply chain and how to safeguard supplies they have, "said Giri Cherukuri, trader and lead Portfolio Manager for basis of Lisle, Illinois Oakbrook Investments, which manages approximately $ 2.7 billionincluding the shares of Apple. "You want to know if it is temporary or how much time this will affect things."Flash PricesThe price of flash memory, which is the main source of Apple, iPhone, iPad, Macbook Air and other storage devices has skyrocketed since the earthquake. On the spot market, the cost of a flash 64-gigabit chip rose 13 percent to $12.92 since the day where the earthquake.Leadership of Apple in mobile devices makes it the largest purchaser of flash in the world. The company was paying suppliers more secure access to the parties, said Rhoda Alexander, an analyst at El Segundo, California-based IHS ISuppli.The challenges follow what may be the growth in the second quarter more great Apple years. When the company today publishes the results, analysts predict a gain of 73 percent to 23.4 billion in sales on average, according to data compiled by Bloomberg. Estimate of analysts that earnings will increase to $5.39 a share in the period ending March 26 compensation report is the second since the Director General Steve Jobs reinforced side to take medical leave in January. Chief Operating Officer Tim Cook assumed control over the day-to-day responsibilities.Pinching MarginsTo reflect the rising costs of components such as memory flash, Apple can project margins of 35% in the third quarter, said Brian Marshall, an analyst at Gleacher & Co. in San Francisco. During the quarter ended in December, Apple had a gross margin of 38.5%.Marshall joined the analysts of Deutsche Bank AG, Piper Jaffray Cos., JPMorgan Chase & Co., Rodman & Renshaw LLC, Pacific Crest Securities and RBC capital markets by predicting that Apple's outlook is affected by the earthquake.Apple advanced $6.01 to $337.86 yesterday in the Nasdaq Stock Market trade. Shares of the company based in Cupertino, California rose 37 percent last year.Apple is usually released how it gets components and manufactures its products, so any comments will be invaluable for investors, said Cherukuri. It can also highlight the challenges of the other computer manufacturers. Hewlett-Packard Co. and Dell Inc. report their quarterly results next month.Japanese Quake CompaniesThe is crimping growth in technology companies in Japan. Seven of the largest companies of consumer electronics in the country, including Sony Corp. and Panasonic, the operating profit - sales less cost of goods sold and administrative expenses - will decline 31 per cent during the period of six months ending 30 September, estimates Barclays Plc this month.The impact of the earthquake is still too early to determine the technological industry, said Marshall of Gleacher. "We will get answers to the questions in the short term, but I am more afraid of what will happen a few months or quarters on the road, said Marshall, who recommends the purchase of shares of Apple.Despite this, with 59.7 billion in cash and investments, Apple is better positioned than others to pay more expensive for the parties and to manage interruptions, Marshall said. "There will be companies which will be worse that that of Apple,"said Marshall.

-Editors: Nick Turner, Ward Jillian

To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net

To contact the editor responsible for this story: Tom Giles to the tgiles5@bloomberg.net

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China's economy grows more than the forecast 9.7% as prices Jump

4: 26 Pm EDT by Bloomberg News, April 15, 2011

April 15 (Bloomberg)--the Chinese economy grew more - that - estimated 9.7% in the first quarter and the inflation in March has accelerated the fastest rate since 2008, adding to pressure for further monetary tightening.

Consumer prices increased by 5.4% a year earlier, the Statistics Office, said at a Conference in Beijing today. The median forecast in surveys of Bloomberg News, economists have been for the growth of 9.4% and the inflation of 5.2%.The Central Bank can stimulate reserve requirements for lenders, as early as this evening to drain liquidity in important economy the fastest-growing, Credit Agricole CIB and & Australia New Zealand Banking Group, said. Data of today can also add pressure increase of interest rates and more rapid appreciation in the yuan after foods and fresh products drove inflation higher than the target of the Government for a third month 2011. "" There is little economic moderation despite monetary tightening is aggressive, ", said Li-Gang Liu, Economist ANZ in Hong Kong, who previously worked for the World Bank. "Inflation remains a high risk."The report of the reserve is 20% for the largest banks and the reference of one year for borrowing costs is 6.31 percent after four rate increases since mid-October. The growth was 9.8% in the fourth quarter of last year.Index of Composite closed Shanghai 0.3 per cent higher. The yuan has varied little at 6.5295 per dollar as of 3: 27 pm, local time.Pressures Asian InflationInflation across Asia have been highlighted by India reports today a jump from 8.98% greater than the forecast of the index of the prices of wholesale in March of the previous year.Data release today in China confirmed numbers circulating yesterday, including a report of Phoenix television. The statistics bureau condemned any leaks and said offenders will be punished.Investment in assets other than rural households has increased by 25% in the first quarter a year earlier and industrial production soared 15 percent in March, the statistics bureau, said. Retail sales grew an annual 17 percent in March and production price has jumped to 7.3%, showed the report today.Officials must evaluate the "lagging effects" of monetary policy to avoid future injury of the economy, Prime Minister Wen Jiabao said this week. China International Capital Corp., most large investment bank of China, warned that the growth of corporate earnings may slow as the economy cools in the coming months. "Inflationary pressures" may influence consumption in China, Pierre Bouchut, financial agent for Carrefour SA, second retailer in the world, said analysts yesterday. "CostsInflation of commodities was mainly due to costs of food, which increased by 12% in March from the previous year. The leaders of Brazil, Russia, India, China and South Africa said at a meeting in Sanya, China, yesterday that the volatile commodity prices pose a threat to the global economy, asking more than regulation.Non-food inflation accelerated to 2.7 per cent, while reserves a jump in Exchange China at a world record $ 3 trillion, reported yesterday, said the additional risk that capital inflows could fuel inflation.Taming the price is the top Government and "urgent" priority, China's cabinet, said after the meeting in Beijing this week to examine the performance of the world's second economy. Officials aim to contain inflation to 4% for the entire year. The tightening measures and comparisons with the year more high-bases earlier can slow down the earnings of prices in the second half of the year, according to the HSBC Holdings Plc.The economy increased by 2.1% over the previous quarter, seasonally adjusted, bureau of statisticssaid today, releasing this number for the first time. Comparing with a 2.4 percentage gain in the fourth quarter. Consumer prices have slipped 0.2% in March, February.Wen on YuanThe Central Bank may increase the flexibility of the yuan to "eliminate the monetary conditions that fuel inflation," Wen said this week. The Chinese currency is described by the United States as undervalued and a factor of global economic imbalances. "" It would be very advantageous to allow the currency to appreciate as a means of controlling inflation, "billionaire investor George Soros, Chairman of Soros Fund Management LLC, said at a Conference in Bretton Woods, New Hampshire, April 10. He described inflation as "a little out of control."Investors have reported the confidence that the fastest growing major economy will achieve a landing soft called, with controlled inflation and expansion continued. Stock market index of the reference of Shanghai Advanced 8% in the three months through today, compared to a 2% decrease in the cabinet of the MSCI Asia Pacific Index.China this week, said this property rising prices in many cities and of rising inflation expectations are the key concerns as the nation wrestling to the following a record 17.5 billion yuan ($2.7 billion) of loans plus 2009 and 2010.Rating CutFitch ratings cut the Outlook for the rating of sovereign debt of the local currency of China to "negative" from "stable" this weekciting a likely deterioration of quality of the assets of the Bank. Moody's Investors Service lowered its Outlook for the property sector to "negative" from "stable" on the residential concern sales could reduce by 30% if local governments apply borders of housing.In contrast, Industrial & Commercial Bank of China Ltd., lending more of the world by the value of market, said its bad-loan ratio decreased and excluded a deterioration in the quality of property assets and the local Government of loan. "If economic growth, the financial sector is required to do well,"President Jiang Jianqing told in an interview with Bloomberg Television to Sanya in southern China's Hainan province yesterday." "The challenges that we face in areas such as real estate and local government funding vehicles will all solved." Chinese banks asset quality deteriorates. "China should protect against the risk of overheating, International Monetary Fund said in its semi-annual Economic Outlook published on 11 April. "Credit growth remains high compared to dazzling previous crises and credit booms and concern mounting on the potential for steep corrections in the price of real estate and their implications, the Fund has.

-Victoria Ruan, Zheng Lifei, Zhang Dingmin. With the help of Jay Wang at Singapore. Editors: Paul Panckhurst, Sunil Jagtiani.

To communicate with the staff of Bloomberg News on this story: Victoria Ruan vruan1@bloomberg.net Beijing; Zheng Lifei in Beijing at lzheng32@bloomberg.net

% CNY

To contact the editor responsible for this story: Paul Panckhurst in the ppanckhurst@bloomberg.net

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Crisis prices in the most serious category

Gas prices rise and economists are looking for tipping point

The question, economists agreed, what happens if prices continue upward and remains high.

Prices for a gallon of regular unleaded gasoline for $4 are revisiting more petrol stations dark territory three years nationwide, as the average price for a gallon of regular gas Verbundestrich2008 reached a peak of $4.11 on 17 July in accordance with the oil price information service.

The survey about 100,000 stations showed that gas prices were now average $3.77 per gallon nationwide. The average is more than $4 in California, Hawaii and Alaska, and analysts with the oil information service said drivers paid more than $4 at some stations in at least three States - Illinois, Connecticut and New York.

The Government energy information administration on Monday put the average price for a gallon of regular gasoline slightly higher at $3.79, up 10.7 cents from last week and nearly a dollar higher than the same period last year.

Even with the higher prices the last width economists said data had still be positive.

Labour market, has for example continues to strengthen, with the economy in March add 216,000 jobs. And a survey of 25 retailers tracked by Thomson Reuters saw an increase of 1.7% in the same month, in contrast to analysts forecasts.

But economists try still, to determine the longer-term consequences.

"As soon as we the $4-cross the threshold, the pain will be more noticeable, and it appears more significantly in reducing the future consumer spending,", said Bernard Baumohl, the Global Chief Economist for the Economic Outlook Group. He predicted that "discretionary expenditure declined will be how to move the price of gasoline is higher."

He also stressed that the Government retail sales figures for March, a broader measure, the other sectors and categories, taking into account be released on Wednesday. He said "I would be surprised not at all, that the not gasoline purchases start to suffer,".

John Gamal, the Director of the petrol research for MasterCard, pointed out that good jobs report last month. "It has been a tug of war," he said higher gas prices between the improved labour market and drag.

He said that a MasterCard Advisors SpendingPulse report showed that gasoline consumption 3.6 percent in the week to 1 April, year after year, which was fifth consecutive decline.

Mr Gamal said "Even better labour market, consumers back on their driving cutting with are,". "This is something we will have to see."

Also, the decline may be caused by cars-saving Americans switch to more fuel since 2008.

"How it is so bad, $4 pump prices, find you under" James W. Paulsen, the chief investment strategist for Wells Capital Management said the economy in better shape now than it was three years ago.

He wrote "The recent rise in energy prices well slow the pace of economic recovery can in the next few quarters," in a research note Monday.?"However, the other position and term of Office of the U.S. job market the reason could why the contemporary energy crisis may be more consumers at the pump as the end of a cycle recession risk irritating."

Economists also say that industries that depend on, as recovery and hotels, was able to travel feel the pinch of the Memorial Day weekend and during the summer revenue.

The increase of which began gas prices rose to steam after political unrest in the Middle East in February. Commodity prices rose amid increased concerns about supply disruptions, especially from Libya, although other manufacturers offered balance deficit. Crude oil prices climbed to their highest level for more than two years last Thursday, more than $110 close.

"Money all were at an incredible speed for the last four months, pouring in was has", Tom Kloza said chief oil analyst at the oil price information service.

"I think we have reached the turning point," he said the gasoline prices. "The sweet spot was in this year of economic growth without damaging demand probably $3.25 to $3.75"

The rise which has raw material prices been so pronounced, that the Federal Reserve expressed officials on gasoline prices. On Monday, in fact, Janet L. Yellen, the Deputy Chairman of the Board of Governors of the fed, said that rising food prices created for energy and "significant difficulties" for many people and that the fed the effect on inflation was observed.

Economists said they expected that Americans not needed less travel by car, especially on Memorial Day would make for summer vacation, or would consolidate more travels for work with errands.

"People just the elasticity in their budgets do not have," said Robert Sinclair Jr., a spokesman for AAA New York.

However, many Americans are as Jon Wood, 49-year-old mechanic, reluctantly bought that, after the run-up of in gas prices in 2008, a Nissan Skyline for its 80-mile, and return to his job in Greenwich, Connecticut commute

Now, with the price for a gallon of gas at $4.19 on the station, where he works, he is glad that he did.

"I drive something very economical," said Mr wood of his car, a 1993 model, which gives him 30 miles per gallon on the highway. "Normally, it would not be my first choice."

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