Mish's Global Economic Trend Analysis |
- China Slashes Rare Earth Export Quotas, Cracks Down On Illegal Mining
- Stoneleigh and Max Keiser on Canadian Housing Bubble: "Expect Enormous Comeuppance, Tremendous Sense of Denial, Ireland-Like Dynamics, 90% Price Drops
- Pension "Armageddon" in Pittsburgh; State Threatens Takeover of City Pension Plan
- Technology Transfer from GE to China will Directly Compete Against the Boeing/Airbus Duopoly
China Slashes Rare Earth Export Quotas, Cracks Down On Illegal Mining Posted: 29 Dec 2010 09:18 PM PST Rare earth elements are used in iPhones, iPads, hybrid-electric cars, wind turbines, flat-panel monitors, tiny magnets in the fins of bombs, missiles, laser-guided smart bombs, and a myriad of other industrial applications. China cut exports last summer, then totally blocked exports to Japan last September in a border dispute with Japan and now has reduced export quotas again by 35 percent. There is growing concern about this problem at the Pentagon and by manufacturers for obvious reasons. Please consider China's rare earths export cut spurs trade concerns China's move to slash export quotas on rare earth minerals -- vital in a slew of high-tech products -- has raised fresh international trade concerns, and Japan's Sony Corp vowed on Wednesday to reduce its reliance on the minerals.Crackdown on Illegal Mines It's not that rare earth elements are that rare, but supply of the metals is limited because of production concerns, especially pollution. Unauthorized mining operations account for as much as 50% of China's rare earth exports, leaving sulfuric-acid poisoned streams and land in the wake. Over such concerns Illegal Rare Earth Mines Face Crackdown China's national and provincial governments [have started] to crack down on the illegal mines, to which local authorities have long turned a blind eye. The efforts coincide with a decision by Beijing to reduce legal exports as well, including an announcement by China's commerce ministry on Tuesday that export quotas for all rare earth metals will be 35 percent lower in the early months of next year than in the first half of this year.It's nice to see this concern over pollution, but cynically, I cannot help wondering if the real goal of this crackdown is to raise prices or secure favorable trade agreements. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Posted: 29 Dec 2010 01:06 PM PST Inquiring minds are watching a superb interview with Max Keiser and Nicole "Stoneleigh" Foss regarding the Canadian Housing Bubble. The interview starts at 13:42. Interview Snips
"Stoneleigh" lives in Canada and is author of the popular Automatic Earth Blog. Also see Stoneleigh and Max Keiser Flatten the Canadian Economy I agree with everything "Stoneleigh" said in the above bullet point list except I do not see a price collapse of 90% on average. I think 50-60% in some areas is more like it. Even 40% would be devastating and that would be my best case scenario. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Pension "Armageddon" in Pittsburgh; State Threatens Takeover of City Pension Plan Posted: 29 Dec 2010 10:30 AM PST Pension stories seem to be going viral lately, not any story in particular, just the sheer number of them. Please consider Pittsburgh City Council, Mayor Clash on Pension 'Armageddon' Pittsburgh's City Council ordered Mayor Luke Ravenstahl to attend a meeting today to hash out a plan to avoid a state takeover of the underfunded municipal pension, which may more than double its cost to taxpayers.Raising taxes is not the answer. It would encourage both white flight and business flight. Higher property taxes would cause more bankruptcies from people already on the edge, barely able to get by right now. Higher taxes certainly would do nothing to attract business. Gary, Indiana twice received special permission from the state to raise taxes to meet funding requirement. The result is taxes are higher and Gary is still broke. Instead, Indiana, one of 26 states that do not allow municipal bankruptcies, is about to. For details please see Indiana Bill Would Allow Cities to Declare Bankruptcy; Gary, Lake Station, Georgetown Likely Candidates; Hands Tied in Rhode Island Interestingly, Pennsylvania is one of the states that do allow bankruptcy. I urge the Pittsburgh city council to take just that option. Five Step Plan For Pittsburgh
Pennsylvania Governor-elect Tom Corbett is a Republican. He takes office on January 18, 2011. Please consider Pennsylvania Gov.-elect Tom Corbett says transition team provides 'fresh set of eyes' on state government Gov.-elect Tom Corbett met today for the first time with the small army of volunteer advisers who form his extended transition team, but he remained tight-lipped about prospective Cabinet appointments or his promised government belt-tightening.The city should be talking with Tom Corbett's transition team regarding bankruptcy right now. I bet the governor would consider it. Bankruptcy and killing untenable public union contracts, not higher taxes is all that can save Pittsburgh. The mayor and the city council should have one master, the people of Pittsburgh, not the police and fire unions. Pittsburgh's city council's obligations to the city are to produce the most services for city residents at the least cost. Public unions provide the fewest services at the most cost. It is time to put an end to this widespread practice that threatens to bankrupt numerous cities in the country this year. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Technology Transfer from GE to China will Directly Compete Against the Boeing/Airbus Duopoly Posted: 29 Dec 2010 02:25 AM PST A joint venture deal between GE and a Chinese military-jet maker will strike at the very heart of the existing Boeing/Airbus duopoly in control of most of the world's large commercial jet market. The Wall Street Journal reports China Squeezes Foreigners for Share of Global Riches Foreign companies have been teaming up with Chinese ones for years to gain access to the giant Chinese market. Now some of the world's biggest companies are taking a risky but potentially rewarding second step—folding pieces of their world-wide operations into partnerships with Chinese companies to do business around the globe.End of the Duopoly Please consider Competition between Airbus and Boeing Competition between Airbus and Boeing (sometimes referred to as the "Airliner Wars") is a result of the two companies' domination of the large jet airliner market since the 1990s, which is itself a consequence of numerous corporate failures and mergers within the global aerospace industry over the years. Airbus began its life as a consortium, whereas Boeing took over its former arch-rival, McDonnell Douglas, in 1997. Other manufacturers, such as Lockheed and Convair in the USA and Dornier and Fokker in Europe, have pulled out of the civil aviation market after disappointing sales figures and economic problems. The collapse of the Eastern Bloc and its trade organisation Comecon around 1990 has put the former Soviet aircraft industry in a disadvantaged position, although Antonov, Ilyushin, Sukhoi, Tupolev and Yakovlev develop new aircraft and gain a small market share. All this has left Boeing and Airbus in a near-duopoly in the global market for large commercial jets comprising narrow-body aircraft, wide-body aircraft and jumbo jets. However, Embraer has gained market share with their narrow-body aircraft in the Embraer E-jets series. There is also a similar competition in regional jet manufacturing between Bombardier Aerospace and Embraer.There is a lot more information in the above link. Inquiring minds will give it a closer look. Short and Long-Term Risks The obvious long-term risk is China ends up with GE's technology then later dumps GE as a partner. Short-term, this deal will cost Boeing and Airbus jobs in the US and Europe respectively, starting as soon as production begins. Moreover, this will put huge wages pressures on Boeing and Airbus. Think Aviation Industry Corp. of China is going to pay US union wages and benefits to its workers? The hollowing out of US manufacturing marches on. Already Boeing and Airbus are continually griping about who is getting more government subsidies. Expect both companies to quickly start bitching about Chinese government subsidies. Finally, look for large commercial jet prices to drop. That's what competition does, and that's the good side of this deal. Regardless of how you see it, we can safely add this news item to the list of deflationary pressures. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
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