China sees fierce regional competition for skilled workers

 China's coastal cities are facing the pressure of a severe labor shortage as the country's western interior catches up as a magnet for skilled workers.

The situation came to the fore following publication of a survey on Monday showing a shortfall of 123,300 workers in Guangzhou, capital of south China's Guangdong Province. Eighty percent of the surveyed companies expressed concern about production recovery after the Spring Festival holiday.

Chinese migrant workers traditionally return to their hometowns to mark the lunar New Year and look for new jobs following the holiday. This year, the shortage has been particularly pronounced, according to the Guangzhou Human Resource Market Service Center, the government-led employment agency that conducted the survey.

A similar warning was issued on Tuesday by the Fujian provincial government. Wang Jianmin, deputy chief of the province's human resources and social security bureau, told Xinhua that the coastal province faces a shortfall of 80,000 labors.

To quench the thirst for labor, company owners along the east coast are rushing to the western interior to hire new recruits, fueling a tug-of-war amid intensified competition for skilled workers.

Tuo Yan, manager of the human resources department of the Ningbo-based Xinda Electronics Co., Ltd. in the eastern province of Zhejiang, said that she went to southwestern China's Chongqing Municipality to recruit new workers, but managed to hire fewer than 80 people and filled just 40 percent of the company's target.

Li Runcai, managing director of Qiyun Plastics, a Guangdong company specializing in making plastic products, went to several job fairs in Chongqing as well, where he hoped to fill the job vacancies in his company.

"A good number of workers previously working in the Pearl River Delta have gone back to Chongqing, a big labor pool in China, and it's getting harder to hire them back," Li said.

Industry insiders attribute the lack of workers in China's coastal east to a spate of factors, including high living expenses, rising labor costs, and a shrinking income gap.

DELAYED RETURN MARS COASTAL PRODUCTION

The end of the Spring Festival holiday usually marks the beginning of a new workload in coastal cities, but the postponed return of migrant workers is marring the plans of company owners desperate to resume production.

In Hangzhou, capital of Zhejiang Province, recruitment ads can be found on the front doors of restaurants near the busiest roads, a common tactic to ease the typical post-holiday labor shortage.

Zhang Jinxin, owner of a chain restaurant on the crowded Wulin Road, said that his catering staff are now thin on the ground as more than half of the chefs and waiters he hired haven't returned after the week-long holiday, which ran from Jan. 31 to Feb. 6.

Similar situations can be found in Guangdong, where manufacturers are moving heaven and earth to hire new workers to get their factories rolling.

But the hiring process has yielded unsatisfactory results because skilled workers are "not that easy to find," said He Mu'an, head of the Dongneng Mechanical and Electrical Engineering Co., Ltd., located in Dongguan City of Guangdong.

"This is an annual travail for us," He said.

Zhang Weiguo, director of the Institute of Economics with the Shandong Academy of Social Sciences, sees the shortage of labor along the coast as a sign of conflict between spiraling company benefits and workers' demands for higher income.

"Small and medium-sized companies have generally increased payment, but that is dwarfed by soaring commodity prices," Zhang said.

Migrant worker Zhu Shiyu, who works for an electronic meter manufacturing factory in Zhejiang, agrees.

"My gains are basically eaten by living costs," Zhu said, adding that he has to think very carefully before smoking a cigarette or making a phone call.

Moreover, it's difficult for people like Zhu to settle in coastal cities due to hurdles such as lack of medical care insurance, pensions, and other social benefits, which constantly make their lives unstable.

RISING WEST A NEW CHOICE

As high living costs in the east have smashed the dreams of many workers, rising labor demands in less-developed and less-expensive western regions seem to be a better choice.

The huge inflow of foreign capital and the emergence of industries such as electronic devices have fueled an insatiable demand for migrant workers in the west.

In Chongqing, major districts such as Yongchuan, Hechuan and Fuling need at least 15,000 laborers each year, driven by a campaign by local government to boost the local economy, according to official statistics.

In Hechuan District, the local industrial park required more than 20,000 laborers in 2013, prompted by sectors such as car assembly, electronics and machinery.

According to the municipality's labor department, laborers in Chongqing who chose to work in the city's vicinity outnumbered those working outside the municipality for the first time in 2011, and in early 2013, the difference exceeded one million.

In the central province of Henan, an area with a large number of outbound laborers, a staggering 3.86 million more people chose to work in the province rather than making ends meet in other places in 2013, official data showed.

According to the National Bureau of Statistics, the number of migrant workers in central and western regions grew more quickly than that in the east in 2012, and the proportion of migrant laborers in the Yangtze River Delta and Pearl River Delta that year fell by 0.5 and 0.3 percentage points respectively.

The shrinking income gap between the east and west is an advantage that has wooed migrant workers westward, according to investigations by labor departments and employment agencies in various localities.

The income gap in electronics companies, for instance, has shrunk to 400 yuan (66 U.S. dollars) at present from 1,400 yuan in 2008.

Many migrant workers move home to take care of family members, or because they want to start a career on their own with the money they have earned in big cities, according to Fu Liqun, a research fellow with Hangzhou's Academy of Social Sciences.

As urgency for change mounts, companies in the east are mulling measures to reverse the outflowing trend.

Xiao Xuebing, vice-board chairman of Wingtech, a Zhejiang-based mobile phone design and production company, said that the company will increase workers' salaries by as much as 20 percent in order to survive in the face of cutthroat competition.

"We will also improve the welfare of our workers," Xiao said.

In addition to the efforts of the companies themselves, Fu Liqun said that the government must take a trailblazing role in guiding companies toward restructuring to survive labor shortages.

"The government could provide preferential policies for companies that have market potential," Fu said.

He added that the country's western and eastern regions should improve connections and communication during industrial transfer, which could help make the best of resource distribution. 

Source: XInhua

Growing number of Chinese entrepreneurs head to the UK

A growing number of young Chinese entrepreneurs are eyeing the UK when it comes to starting a business. Entrepreneur visas issued to Chinese nationals more than tripled in 2012 compared to the year before - a trend that appears to be picking up speed.

In this underground bar in east London Chinese entrepreneur Lesley Zhang is hosting an event for her start-up business.

Rentez Vous - a small company that originally started in Paris - allows women to swap clothes by "renting" items to other fashion conscious Londoners.

Lesley is one of a growing number of Chinese entrepreneurs choosing the UK to start their business - and says she was lured here by London’s thriving creative culture.

In 2012 the number of entrepreneur visas issued to the Chinese more than tripled to 84 - up from just 25 the year before. In the first 3-quarters of 2013, the figure is already higher, at 110.

If the entrepreneurs generate at least 5 million pounds of income or 10 permanent jobs in the UK - they can apply to settle here.

Mark Harper was Immigration Minister at the time of these rises - and insists the increases are not taking opportunities away from young British entrepreneurs.

He also believes the increase in Chinese entrepreneurs can work hand in hand with the government’s policy of cutting immigration from hundreds of thousands to tens of thousands.

Back at Rentez-Vous Lesley eventually wants to take her UK success back home.

Source: CCTV

90,000 Chinese travel S. Korea during Chinese New Year

South Korea received around 220,000 tourists during the festival and 40% was from China. Yin Yue tells us why it’s such a popular destination.

One of the advantages of being near China is the influx of tourists.For example, during the spring festival break that just passed, South Korea received more than 90,000 Chinese tourists, a third higher than last year, and they tend to be big shoppers.

It’s easy to see why so many are choosing to visit South Korea. Seoul is just a two hour flight away from Beijing, visas are relatively easy and the popularity of South Korean culture are just some factors behind the jump in Chinese tourist numbers. Of the 12 million tourists to South Korea last year, 4.3 million were Chinese tourists, overtaking Japan to become the largest tourist origin.

Source: CCTV

China's gold demand surges to record

Gold consumption in China expanded to a record high in 2013, as a slide in prices attracted buyers for jewellery and bullion. 

Data from the China Gold Association shows that gold consumption jumped 41 percent last year to exceed 1,000 tonnes for the first time, reaching 1,176 tonnes. The World Gold Council says China likely overtook India as the largest user. China’s gold output in 2013 rose 6.2 percent from the previous year, that makes China the world’s biggest producer for a seventh straight year. Gold prices posted the biggest annual drop since 1981 last year as the yellow metal lost its shine as an inflation hedge.

Source: CCTV

China: 135 emission rules implemented in 2013

China’s Ministry of Environmental Protection put in place more than 130 measures to cut pollution last year, especially targeting polluting industries like thermal power, iron and steel, cement and chemical engineering.

2013 may have seen China’s worst smog to date, but it was also the year with the most efforts to improve the environment.

Since October, the Ministry of Environmental Protection has been inspecting the emission reduction efforts in the Beijing-Tianjin-Hebei region, the Yangtze River Delta and Pearl River Delta region. Analysts say those measures will improve the environmental protection and upgrade the heavy-polluting industries.

To date, the central government has implemented around 1400 environmental protection standards. To ensure companies meet the standards, the Ministry has taken a tougher stance. Those failing to comply will not be allowed to go into production. Most of the steelmakers are under pressure to meet the current standards.

Some newly revised emission standards are even stricter than those in developed countries. The emission standards for particles will be lowered to 10 milligrams per cubic metre, which half of the limit standards set by EU.

Source: CCTV

China gains additional foreign reserves through more balanced global trade

China gained additional foreign reserves last year through more balanced global trade. That's according to preliminary data from China's foreign exchange regulators.

China had a near 50 billion US dollar surplus on the current account in the fourth quarter of last year and an 81 billion US dollar surplus on its combined capital and financial accounts. Overall, the country posted a 189 billion dollar current account surplus for all of 2013 and a 243 billion US dollar surplus in its capital and financial accounts.

Experts say that China's foreign trade has become more balanced since its current account surplus peak back in 2008 that year, China's current account surplus as a percent of GDP came in at 10-percent, but has since dropped to 2-percent in 2013 the lowest in nearly a decade.

Source: CCTV

Emerging markets' growth slows to 4-mth low in January

Business activity across emerging markets expanded in January at their slowest pace in four months due to sluggish services sectors in Brazil, Russia, India and China.

HSBC's composite emerging markets index of manufacturing and services purchasing managers' survey slipped for the second straight month to 51.4 in January. The index stayed above the 50 threshold separating expansion and contraction but was below the 2013 average of 51.7.

The survey showed signs of manufacturing and export revival in some countries, but Chinese factory output dipped below the 50 mark. Brazilian manufacturing growth slowed and output declined in Russia and Indonesia. Weak currencies, meanwhile, were increasing costs for some manufacturers.

Source: CCTV

Venezuela inflation rate hits 56% in 2013, one of highest in Americas

Venezuela is becoming the world's cheapest and yet most expensive country. With its inflation rate hitting 56 percent last year, one of the highest in the Americas, black market trading and a lack of hard currency is creating hardships for Venezuelans.

Standing in long lines has become an everyday task for Venezuelan residents.

People wait hours just to buy basic staples at supermarkets across the country. Even the military has had to be deployed in some markets to make sure everyone gets his share.

Local resident Helda Saez said, "We came to wait in line at five o’clock in the morning to try to get flour, sugar, cooking oil, everyday foodstuffs. Before, there was everything everywhere."

Under 11-year-old currency controls, Venezuela's central bank last week suspended the auctioning of U.S. dollars to businesses that sell food, medicine and other basic goods. The attempt to ease the inflation crisis caused Venezuela's citizens to doubt whether the country holds enough currency reserves. That doubt, consumers say, has worsened black market hoarding and trading of food.

The Venezuelan economy took another blow last Friday when the world's largest automaker, Toyota, announced it would halt production in the country because of the shortage of hard currency.

Six-point-three bolivars can be exchanged now for one dollar for essential goods in Venezuela. Some analysts expect that the country's inflation rate could go as high as 300 percent later this year.

Source: CCTV

China: PBOC urges liquidity management

China's central bank released its fourth quarter monetary policy report on Saturday. The PBOC is urging the country's lenders to better manage liquidity while saying it will do ITS part to restrain off balance sheet and risky credit growth.

Into 2014, China’s central bank is becoming more cautious in its policies. The PBOC said in its report that it would step up lending oversight in risky areas such as real estate and industries with overcapacity. The tightening of regulations comes as questions were raised about China’s quickly expanding shadow banking sector in 2013. The central bank is trying to rein in an explosion of off-balance sheet lending and make sure financial institutions support the real economy rather than speculative activity.

The PBOC is also trying to limit the accumulation of local government debt. Official data shows that China’s local governments debt stood at about $3 trillion as of the end of June 2013. The bank said in its report that it will explore the use of market mechanisms to resolve problems in the area.

On a more macro level, the PBOC noted in its report that the economy is likely to remain stable but the base for solid growth hasn’t yet solidified because it’s still dependent on investment. The bank also reiterated plans to advance reforms to interest rates and the currency exchange rate system, to promote a deposit insurance system, and strengthen communications with markets and the public.

Source: CCTV

Reuters: GLOBAL MARKETS-Risk assets on a roll as Yellen reassures

 "Asian shares rallied for a fourth straight session on Wednesday as risk appetites were whetted by an optimistic economic outlook from Federal Reserve Chair Janet Yellen, which diminished the need for safe havens such as the yen and bonds.

Regional markets face a potential pitfall later Wednesday when China releases trade figures for January. Any weakness will stoke concerns about a slowdown and the risks would seem to be sizable given January last year was a very strong month for export growth, making for a tough comparison. 

For now, investors took a leaf from the strong performance of Wall Street and lifted MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> 0.15 percent.

Australia's main index added 0.5 percent <.AXJO> while Nikkei futures hinted at opening gains of 200 points, thanks in part to a broad retreat in the yen.

The Dow  ended Tuesday up 1.22 percent, while the S&P 500 <.SPX> gained 1.11 percent to post its best four-day performance in 13 months.

Stocks in Canada, Europe and emerging markets also rallied as Yellen was careful to rock no boats in her first testimony to Congress. {ID:nL2N0LG0S4]

Yields on the 10-year Treasury note were up 5 basis points at a two-week high of 2.72 percent .

Sentiment was further supported by news that the U.S. House of Representatives had passed legislation increasing Washington's borrowing authority, removing the danger of default.

A stabilisation in emerging markets also helped after the turmoil of January. The Turkish lira and the South African rand have been grinding steadily higher for the past two weeks.

The calmer mood was reflected in the VIX index of volatility, which dived 4.9 percent to 14.51 <.VIX>, a world away from the recent peak at 21.48.

The same sea change hit the safe haven yen while boosting currencies leveraged to global growth, such as the Australian dollar. The latter was the strongest performer of all the major currencies, climbing 1.4 percent on the yen to 92.64 .

The U.S. dollar added around a third of a yen to 102.58 , while the euro edged back to $1.3637 .

The single currency will be sensitive to a speech by European Central Bank President Mario Draghi later on Wednesday, while the Bank of England releases a report on inflation which should include an overhaul of forward guidance.

In commodity markets, gold extended its recent rally to reach $1,290.50 an ounce , just off a three-month peak.

Brent crude rose 8 cents to $108.71 a barrel, while U.S. crude gained 42 cents to $100.36"

Source: Reuters.

US the House Clears Way to Lift Debt Limit

                  The Wall Street Journal reports,"the House on Tuesday approved a bill to extend the federal government's borrowing authority with no strings attached, after Republican leaders dropped all policy demands to avoid a market-rattling confrontation in an election year".

"The measure, which would suspend the debt limit and allow the government to borrow until March 16, 2015, marked a retreat from efforts by House Speaker John Boehner(R., Ohio) to require any debt-ceiling increase to be paired with spending cuts of equal size or with other conservative policy demands—many of which were pushed by the tea party.

"It's a disappointing moment," Mr. Boehner said before the vote, attacking Democrats for refusing to pair spending cuts with the debt-limit increase. "This is a lost opportunity," he said.

But by avoiding a cliff-hanging debt fight, Mr. Boehner's strategy may advance a central Republican political goal ahead of the midterm elections: to keep the public focused on the problems of the 2010 health-care law, which Republican candidates across the country are trying to pin on Democrats".

"Republicans want to avoid giving voters any reason to turn on the party ahead of elections that might give the GOP control of both chambers of Congress. "When this is over, we will focus on our agenda and—if we win six seats in the Senate—what we will do different if we control all of Congress," said Rep. Jim Jordan (R., Ohio)".

"Congress has been aiming to pass a debt-limit increase before Feb. 27, the date the Treasury says it will run out of tools to continue paying the government's bills. Congress is in recess next week, pressuring lawmakers to act quickly to avoid the need for 11th-hour action at the end of the month. The Treasury on Tuesday said the federal government holds $17.212 trillion in public debt".

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Duet Choreography of Yan LiPing Two Trees

                                       Two Trees  Another superb choreography of Yang Liping 

U.S. House Republicans aim to pass 'clean' debt limit bill

- Republican U.S. House Speaker John Boehner told reporters on Feb. 11 that he will allow a "clean" debt limit vote on Feb. 12. The move marks a shift from past strategy, when his party opened negotiations by attaching other legislation to a borrowing ceiling hike. Treasury Secretary Jack Lew has said that Congress must pass an increase by Feb. 27.

Sourc; Reuters

Corn dips as supplies plentiful; wheat, soy firm

 U.S. corn futures eased on Tuesday, led lower by weakness in the cash market and an ample supply cushion, traders said.

Wheat firmed, buoyed for the second day in a row by the U.S. government's surprise cut to its domestic ending stocks estimate while soybeans rose on good export prospects.

Chicago Board of Trade corn futures hit a one-week low and briefly dropped below its 100-day moving average in early morning trading before a wave of bargain buying pulled prices off lows.

Corn prices have fallen for two days in a row, with the market shrugging off the U.S. Agriculture Department's bigger-than-expected cut to end stocks and focusing on the huge boost to supplies compared to a year ago.

"Corn sold off on the premise that the market failed to react to a set of friendly numbers yesterday," said Greg Grow, director of agribusiness at brokerage Archer Financial Services. "It kind of illustrates that the recent rally - 40 cents off of the lows -- already accounted for the bullish export numbers."

At 10:32 a.m. CST (1632 GMT), CBOT March corn <CH4> was 3 cents lower at $4.40 a bushel.

Some recent farmer selling has boosted supplies for processors and ethanol producers, causing cash bids to weaken.

"Corn export forecast is also well above expectations but the market hasn't done much as we still have a comfortable U.S. balance sheet," said Brett Cooper, senior manager for markets at FCStone Australia.

Strong export demand pushed soybean prices into positive territory after a weak opening. Soy bids firmed on the CIF market on Tuesday morning as icy conditions along Midwest rivers limited near-term supplies available to exporters.

Additionally, USDA said that private exporters reported the sale of 116,000 tonnes of U.S. soybeans to China for delivery during the 2014/15 marketing year.

CBOT soybeans for March delivery  were 6 cents higher at $13.31-1/2 a bushel.

A growing global soybean supply base kept a lid on the gains.

Conab, Brazil's government crop supply agency, cut its forecast for the first time in the 2013/14 crop year but said the country's harvest would still be a record 90.01 million tonnes on Tuesday. It said that the hot, dry weather that has hit the country for the past month and a half had not yet impacted the forecast but sustained drought could affect its March estimate. 

CBOT March soft red winter wheat  was up 1-3/4 cents at $5.86-1/2 a bushel. Prices have risen 1.5 percent during the past two days but the market was facing some technical resistance at its 40-day moving average.

Australia, the world's second-largest exporter, raised its forecast for 2013/14 wheat output by 3 percent, as strong production in Western Australia state pushed the crop above 27 million tonnes for only the third time.

Source: Reuters

Strong copper output growth boosts miner Glencore Xstrata

Miner and trader Glencore Xstrata on Tuesday beat analysts' forecasts with a 26 percent rise in annual copper output, boosted by strong growth at its African and Chilean mines.

Output of both copper and coal, the two biggest earners for Glencore's industrial side, rose in the year to the end of December, offsetting a decline in nickel, lead and zinc.

The company, which of the diversified miners has the biggest exposure to copper, said its own-sourced copper production rose by more than a quarter to 1.5 million tonnes in 2013, passing analysts' expectations for a rise of 16-25 percent.

The division, which accounts for about 30 percent of the company's profits, benefited from strong growth at its Congolese mines and at Collahuasi in Chile, a joint venture with rival Anglo American inherited with the acquisition of Xstrata last year.

"Copper is central to our bullish stance on Glencore Xstrata given our positive view on the future price development of the commodity and the strong prospects for Glencore to grow production," Bernstein research analysts said in a note.

"Today's Q4 production results were positive and the excellent performance of the company's African copper assets in particular makes us confident that full year financial results for 2013 will be strong and that 2014 numbers will also likely be better than many think."

At 0850 GMT, Glencore shares were up more than 1 percent.

Glencore produced a total of 750,600 tonnes of copper cathode in 2013, up 21 percent on the year before, mainly due to a recovery at copper smelter Pasar, in the Philippines, which was affected by a fire in 2012.

Pasar has been shut since November due to structural damage sustained when a powerful typhoon battered the Philippines.[ID:nWLB005OB]

A restart is now expected in the first quarter this year.

In coal, the second-biggest earner for the company's industrial side, output rose 4 percent to 138.1 million tonnes, in line with analysts' expectations, driven by growth at Prodeco, in Colombia, and at the Australian operations, even as the company cut back output at less profitable mines due to depressed coal prices.


WEAKER ZINC, LEAD, NICKEL

Production of zinc, another key source of revenue for the group, fell 9 percent to 1.4 million tonnes, while lead output dropped 2 percent to 315,000 tonnes.

The decline in both metals was due to the Brunswick and Perseverance mines in Canada reaching the end of their lives and ceasing production in June 2013.

Glencore, however, expects its zinc production to return to growth in 2014, mainly due to growth at its Australia operations.

"Nickel and zinc were below expectations but that reflects tough market conditions for both metals and the end of mine life at some assets," Investec analyst Marc Elliott said.

Output of stainless steel material nickel also fell, by 4 percent to 98,400 tonnes, mainly due to the Falconado operations in the Dominican Republic being placed on maintenance in response to poor nickel prices.

The company did not give any update on the sale process of its Las Bambas copper mine in Peru but said that ore reserves at Las Bambas contained 6.9 million tonnes of copper.

"Interestingly they have reported the reserves of Las Bambas which might imply that they are preparing to keep it," Elliott said.

China's Minmetals has so far been seen as the front runner for the $5.9 billion Las Bambas project but some say Glencore might now be considering keeping the mine. 

Source: Reuters

European Shares Rise Again

             The Wall Street Journal reports, "European shares gained for a fifth straight session Tuesday, buoyed by U.S. Federal Reserve Chairwoman Janet Yellen’s remarks to Congress that she expects the central bank to stick with its current approach to monetary policy.

The Stoxx Europe 600 index closed 1.2% higher. U.S. markets also gained, while overnight Asian indexes extended their recovery from last week’s bruising selloff".

Ms. Yellen said the Fed will likely maintain its strategy of reducing the pace of its monthly bond purchases in “measured steps” if the U.S. economy continues to improve. Investors had been watching for hints that the Fed might veer from its present course after recent economic data signaled the pace of the recovery might not be as fast as previously thought.

Brent rises on heating oil, gasoline strength

Brent oil rose on Tuesday backed by strong gasoline and heating oil prices that were boosted by persistent cold weather in the U.S. and expectations of another large draw in distillates.

Frigid weather supported heating oil prices and U.S. RBOB futures saw some strength from traders unwinding the spread trade between heating fuel and gasoline, one trader said.

Markets showed little reaction to U.S. Federal Reserve Chair Janet Yellen's remarks that she will not make any abrupt changes in the U.S. central bank's monetary policy, and that the Fed will continue to reduce its stimulus. 

"Yellen's comments were not any surprise to the market," said Andy Lipow, president of Lipow Oil Associates in Houston.

"Brent is getting its support from strength in products."

U.S. crude oil held around $100 per barrel, supported by a strong U.S. equities market but capped by a stronger U.S. dollar. 

Brent crude was last trading up 17 cents at $108.80 a barrel at 11:53 a.m. EST (1653 GMT), after settling 94 cents lower in the previous session.

U.S. crude traded down 16 cents at $99.90.

U.S. ultra-low sulfur diesel (ULSD) rose nearly 3 cents to $3.0258 per gallon. Gasoline was up 2.63 cents to $2.7511 per gallon.

U.S. crude was still close to a six-week high, supported by expectations of a drop in distillate inventories last week due to freezing weather across the country.

Distillate stocks, including heating oil and diesel fuel, are expected to drop by 2.3 million barrels in the week to Feb. 7, according to analysts in a Reuters poll. U.S. crude oil inventories are expected to rise by 3 million barrels.

The American Petroleum Institute will release its oil inventory data at 4:30 p.m. EST (2130 GMT) on Tuesday and the U.S. Energy Information Administration will release its weekly inventory report to at 10:30 a.m. EST on Wednesday.

Brent's gains were capped by expectations of a further increase in Libyan output. The North African nation's current production is around 600,000 barrels per day (bpd), up from its average rate in January. 

Source: Reuters

Alaska crude likely first to flow around U.S. export ban

Oil traders looking for cracks in a contentious decades-old U.S. ban on crude exports should be looking west, not east.

The first big cargoes to be shipped far overseas are likely to come from one of the country's oldest oil patches, Alaska, rather than booming new shale fields like the Eagle Ford of Texas, or North Dakota's Bakken.

Oil companies and analysts are already examining the widening arbitrage window for selling Alaska's North Slope (ANS) crude to Asia, looking to resume shipments that halted a decade ago as rising domestic output of light, sweet crude threatens to crowd long-time baseload ANS out of West Coast refineries.

The shift may occur even sooner than expected after news last week that Flint Hills Resources will shut down its 85,000 barrels per day (bpd) North Pole refinery near Fairbanks, which had consumed nearly one-sixth of ANS output.

Such sales are essentially unrestricted, thanks to an exception to the export ban carved out by President Bill Clinton in 1996, when ANS output was near its peak. However, experts say the logistics are complicated, with strict shipping requirements that may thwart some efforts.

Alaska crude is one of the several areas “within the margins of the current export ban,” said Amrita Sen, chief oil analyst for research consultancy Energy Aspects.

As much as 30,000 to 50,000 bpd of ANS may be exported by year-end as pressure on domestic light, sweet crude prices builds up, making it more economic to sell abroad, she said. Ed Morse, head of commodity research at Citi, told a conference in Washington on Monday that up to 100,000 bpd may be exported.

The sales, if they resume, could give ammunition to lawmakers in Washington seeking to revise the 40-year ban on crude oil exports. Alaska Senator Lisa Murkowski is one of those campaigning for changes.

Last week, Reuters reported that U.S. authorities had approved limited re-exports of crude to some European countries for the first time in years.

Executives from Conoco Phillips , the largest producer of oil and gas in Alaska, said last November they were open to the possibility of exporting North Slope crude to Asia although had no immediate plans to pursue it.

They said the option could be viable if North Slope oil traded $5 a barrel below European benchmark Brent crude . The price briefly fell to as much as $8.50 below Brent in November, one of the deepest discounts on record, according to Reuters data going back to 1988. It has rebounded to around $3 below. On average, it has traded about $1 below since 2008.

“Our view on the matter hasn’t changed,” Daren Beaudo, director of media relations told Reuters last week.

BP is "working to determine the business implications of a change in the current barriers to oil exports" on a national level, spokeswoman Dawn Patience said.

Exxon Mobil declined to comment on Alaska exports, but was among the first oil majors to raise concerns about

"artificial barriers to trade."

Both oil majors are involved in Alaskan crude production.


CROWDING OUT ALASKA

President Bill Clinton signed legislation in 1996 that ended a 23-year-old ban against exporting ANS crude. Oil production in Alaska had swelled from almost nothing to more than 2 million bpd over the decade to 1988, overwhelming demand.

Within five years, Alaska exports to Asian countries ran at around 44,000 bpd, Energy Information Administration (EIA) data show. But exports to Asia ceased in 2004, after ANS production began to decline and the surplus dwindled. Alaskan output totaled 526,000 bpd last year, the lowest in 25 years.

Now, West Coast refineries that process ANS crude are filling their slates with more inland crude.

Rail deliveries to California plants reached a record 34,000 barrels per day (bpd) in December, up 20-fold from a year earlier, according to the California Energy Commission. Two-thirds of the crude came from Canada.

In 2012, Tesoro replaced ANS for Bakken crude at its 120,000 bpd Washington state refinery, and is working on a $100 million rail-to-barge terminal that would help supply Bakken and Canadian crude to the West Coast.

Total rail unloading capacity is set to reach 910,000 bpd, surpassing the 810,000 bpd of potentially "substitutable" waterborne imports and Alaskan crude, Keith Casey, senior vice president of strategy and business development for Tesoro, said at the company’s annual meeting in December.


TANKER TRACKER

The challenge with exporting ANS is related to shipping rules, not export bans, experts and analysts said.

Exporters of ANS crude must obey the 1920 Jones Act, a law requiring all vessels moving cargo between U.S. ports to meet a host of requirements, including that they be U.S.-built,

-flagged and staffed mainly by U.S. crews.

Clinton's 1996 order requires ANS exporters to keep their tankers 200 nautical miles outside of the United States and equip them with systems that allow the U.S. Coast Guard to track their locations.

Currently, there are 49 U.S.-flagged tankers, and five are not Jones Act-eligible, U.S. government statistics show. Rates for all those tankers have surged on rising demand to ship Texas shale oil to the East Coast.

“To make ANS exports economic today, companies do not have to overcome the politics of crude exports but must account for the constraints of the Jones Act," said Jacob Dweck, a lawyer representing energy companies for law firm Sutherland Asbill & Brennan.


REVIVED PRODUCTION

Other factors are adding to pressure for ANS exports.

For one, the closure of the North Slope refinery is set to reduce demand for crude within the state, likely adding downward pressure on prices. The differential for cash ANS crude has fallen by more than $2 since the announcement.

Alaskan crude output may also be set to grow again after a 25-year decline. Since a state tax repeal on producers took effect in January, oil companies have begun committing to new rigs, wells and jobs in the North Slope, says Kara Moriarty, president of the Alaska Oil and Gas Association.

She said exports may come into focus as Alaska catches up to other oil-producing regions in the lower 48 states.

“Everyone has increased production except for us,” she said

Source: reuters

Fed Urges Emerging Markets to Take Heftier Policy Actions to Stem Capital Flight

        The Wall Street Journal reports "recent efforts by emerging markets such as Brazil, India and Turkey to stem investor flight from their economies are just “stopgap measures” that need to be followed by heftier policy actions, the Federal Reserve said Tuesday in its semiannual monetary policy report to Congress.

         "Finance officials in some of the hardest-hit countries have raised interest rates and tweaked rules on cross-border investments to help tame the capital exodus, blaming the Fed’s wind down of its easy money policies as a primary cause of recent equity, bond and currency sell-offs in their countries".

"But the Fed suggested emerging market leaders need to do more to tame inflation, cut their government debt levels and boost competitiveness in their economies to reassure investors.

In a chart showing exchange rate appreciation and economic vulnerability of emerging markets, the Fed highlighted Turkey, Brazil, India, Indonesia and South Africa as the most exposed to further problems. The Fed’s “vulnerability index” is based on six indicators, including how much countries have to borrow from abroad to finance their trade deficits, public and private indebtedness, inflation, and the size of their emergency cash stockpiles".

Night of the guitars. Live.Randy California, Pete Haycock, Steve Howe, Steve Hunter, Robby Krieger, Alvin Lee..........

                                           Long time looking for a jam session like this one enjoy.
                                          Randy California, Pete Haycock, Steve Howe, Steve Hunter, Robby Krieger, Alvin                                              Lee, Andy Powell, Ted Turner, Leslie West Miles Copeland 

Spirit - I Got A Line On You (1984) Original Video Live Version!

                                     Randy California some members of the family & friends
                                       I like this live version.

Music: Spirit I Got a Line on You

US December wholesale inventories rose 0.3%

December 2013 wholesale inventories were $517.9 billion, up 0.3 percent from the revised November level and up 4.0 percent from December 2012. Sales were $442.4 billion, up 0.5 percent from the revised November level and up 5.8 percent from December 2012.

For 2013 overall, wholesale inventories increased 3.9 percent from 2012. Sales rose 4.2 percent from 2012 to 2013.

Source: Economics and Statistics Administration

Transcript(Partial) of Fed Chairwoman Janet Yellen’s Testimony to Congress

Partial Transcript

"Our current program of asset purchases began in September 2012 amid signs that the recovery was weakening and progress in the labor market had slowed. The Committee said that it would continue the program until there was a substantial improvement in the outlook for the labor market in a context of price stability. In mid-2013, the Committee indicated that if progress toward its objectives continued as expected, a moderation in the monthly pace of purchases would likely become appropriate later in the year. In December, the Committee judged that the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions warranted a modest reduction in the pace of purchases, from $45 billion to $40 billion per month of longer-term Treasury securities and from $40 billion to $35 billion per month of agency mortgage-backed securities. At its January meeting, the Committee decided to make additional reductions of the same magnitude. If incoming information broadly supports the Committee’s expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings. That said, purchases are not on a preset course, and the Committee’s decisions about their pace will remain contingent on its outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases.

The Committee has emphasized that a highly accommodative policy will remain appropriate for a considerable time after asset purchases end. In addition, the Committee has said since December 2012 that it expects the current low target range for the federal funds rate to be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation is projected to be no more than a half percentage point above our 2 percent longer-run goal, and longer-term inflation expectations remain well anchored. Crossing one of these thresholds will not automatically prompt an increase in the federal funds rate, but will instead indicate only that it had become appropriate for the Committee to consider whether the broader economic outlook would justify such an increase. In December of last year and again this January, the Committee said that its current expectation–based on its assessment of a broad range of measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments–is that it likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent, especially if projected inflation continues to run below the 2 percent goal. I am committed to achieving both parts of our dual mandate: helping the economy return to full employment and returning inflation to 2 percent while ensuring that it does not run persistently above or below that level".

Source:  WSJ

European Equity Markets Brief

Source: WSJ

Asia Pacific Indexes at close for February 11th,2014

Gold hits three-month high, shares up ahead of Yellen

Gold hit a three-month high and global shares rose on Tuesday as investors wagered that the new head of the U.S. Federal Reserve would renew the bank's pledge to keep policy ultra-easy at her first testimony to Congress.

Fed Chair Janet Yellen is likely to face questions on the state of the labour market and the future pace of tapering when she appears before the House Financial Services Committee at 1500 GMT. Her testimony will be released at 1330 GMT.

Dealers said the latest betting was that while the tone was likely to be upbeat on the economy, Yellen would emphasise that interest rates were set to remain near zero for some time.

Analysts have generally assumed Yellen will stick with the script and reiterate that the Fed will continue to scale back its asset buying as long as the economy improves as expected.

"In the absence of a Fed meeting in February, her testimonies are seen as the biggest risk event for the month."

One argument for staying the course on tapering is that bond investors have learned to live with the idea after fears that interest rates would rise led to bouts of selling last year.

Yields on U.S. 10-year Treasury paper have settled back at 2.67 percent, well below recent highs of 3.04 percent and less of a threat to the housing market.

Investors, too, have accepted that tapering is not the same as tightening and have pushed out the timing of the first actual hike in the Fed funds rate. A move is not fully priced in until late 2015 <0#FF:>, a view Yellen is likely to endorse.

Source: Reuters

Germany's Schaeuble sees no deflation threat in Europe

Recent turmoil in emerging markets will hit export-oriented European economies but there are no signs the bloc that shares the single currency is headed towards deflation, German Finance Minister Wolfgang Schaeuble said.

Speaking to Reuters as part of a series of interviews with top policymakers across the euro zone, Schaeuble signalled a readiness to help emerging market countries that have seen their currencies sink to multi-year lows in past weeks as part of a broad market sell-off.

"We will help the emerging markets, within the limits of our possibilities, to solve their problems just as they stood by us in past years," Schaeuble said, pointing to a meeting of G20 finance ministers in Australia later this month.

"The difficult situation in some emerging markets affects us of course. We are all dependent on exports, Germany more than other countries," he added.

But Schaeuble, who started his second term as finance minister in December, said he agreed with European Central Bank President Mario Draghi that falling prices were not a danger for the euro zone, despite a drop in the bloc's inflation rate to 0.7 percent last month and warnings from the International Monetary Fund that deflation is a potential risk.

"There is no deflation danger in Europe," Schaeuble said.

"We understand deflation as a reluctance to spend in the anticipation of falling prices. And there are no signs of this."

In a wide-ranging interview, Schaeuble also played down the risks of last week's ruling by Germany's Constitutional Court on Draghi's bond-buying scheme. 

The court decided to refer complaints against the so-called Outright Monetary Transactions (OMT) programme to the European Court of Justice, but it also voiced concerns that the ECB went beyond its mandate with the scheme.

Although the OMT plan has never been used, it is widely credited with restoring confidence in the euro zone after years of crisis that had threatened to tear the 18-member bloc apart.

Some experts, including the head of Germany's ZEW think tank Clemens Fuest, have said the court decision severely blunts the OMT programme.

Schaeuble dismissed those concerns, saying the details of the OMT were secondary to the broad message sent by the ECB and European governments that they would not let the euro zone break apart.

"I think the return of financial market confidence in the stability of the euro has been due not only, not even primarily, to the ECB's (OMT) announcement," Schaeuble said.

"When leaders of government on the one hand, and the central bank on the other, say they will do what is necessary, then financial markets need not worry."

Schaeuble also touched on a referendum in Switzerland at the weekend in which voters approved new limits to immigration from the European Union, saying fears about the free movement of people in Europe needed to be taken seriously.

But he played down the risks of a strong performance by populist, anti-immigration and eurosceptic parties in European Parliament elections in May, saying this would only push bigger mainstream parties to work more closely together.

"If we have stronger eurosceptic voices in the next European Parliament, then it will raise the pressure on everyone else to commit even more strongly to European integration, to react to this result and make Europe more efficient," he said.

Source: Reuters

Barclays to cut 12,000 jobs, pays bigger bonuses

Barclays said it would axe up to 12,000 jobs this year even as it raised bonuses for investment bankers, prompting fury among politicians and unions who said it had not learned the lessons of the financial crisis.

Britain's third-biggest bank said up to 9 percent of employees could go, including 7,000 in Britain, as it tries to lower costs. The cuts are not concentrated in any one business area.

It said it paid 2.4 billion pounds ($3.9 billion) in incentive awards last year, raising bonuses at the investment bank by 13 percent despite a slump in its profits. The average bonus for the investment bank's 26,200 staff was 60,100 pounds.

Critics of the bonus hike said it showed Britain's biggest banks were still failing to heed the lessons of a financial crisis caused by dangerous risk taking and excessive pay.

"Today Barclays has stuck two fingers up to hard-pressed families across Britain by announcing another multi-billion pound bonus pool," said Frances O’Grady, General Secretary of the Trades Union Congress.

Barclays Chief Executive Anthony Jenkins, who took the helm in 2012 after an interest rate rigging scandal, has vowed to improve culture and standards at the bank while also reducing risk and strengthening the balance sheet.

But its investment bank profits slumped 37 percent last year to 2.5 billion pounds and analysts voiced concern about whether Jenkins can reach his target of a return on equity above 11.5 percent by 2016.

Getting costs down looked more challenging than expected, they said, while increased regulatory pressure and a grim outlook for fixed-income revenue made the target on returns look difficult to achieve.

Barclays shares were down 5 percent at 261 pence by 1255 GMT, underperforming a 0.7 percent rise by an index of European banks <.SX7P>.


"WE NEED THE BEST PEOPLE"

The higher bonuses lifted the compensation-to-income ratio in the investment bank to 43.2 percent last year from 40 percent in 2012. Jenkins, who gave up his own bonus for 2013, said he still aimed for a ratio in the "mid-30s" across the bank.

He defended the bigger bonus pot, saying the bank had to recruit the best staff to compete with global rivals and continued to have "constructive" talks with investors over pay.

Source: Reuters

In cautious testimony, Fed's Yellen says labor recovery far from complete

New Federal Reserve Chair Janet Yellen said on Tuesday the labor market recovery is "far from complete" despite a drop in unemployment, yet she said the U.S. central bank expects to continue trimming policy stimulus in measured steps due to broader improvements in the economy.

In her first public comments as Fed chief, Yellen, giving a balanced testimony to a House committee, nodded to the recent volatility in global financial markets, but said at this stage it does "not pose a substantial risk to the U.S. economic outlook."

She emphasized continuity in the Fed's approach to policy, saying she strongly supports the approach driven by her predecessor, Ben Bernanke.

While the unemployment rate has fallen by 1.5 percentage points since the latest bond-buying program began in September of 2012, at 6.6 percent the rate remains "well above levels" the Fed sees as consistent with maximum sustainable employment, Yellen said.

"(T)he recovery in the labor market is far from complete," she said according to prepared remarks to the Republican-controlled House Financial Services Committee.

Yellen, in just her second week on the job, cited the

"unusually large fraction" of jobless Americans who have been out of work for more than six months, and the "very high" number of part-time workers who would prefer full-time jobs.

"These observations underscore the importance of considering more than the unemployment rate when evaluating the condition of the U.S. labor market," she said.

More than five years after the recession ended, the Fed has embarked on perhaps its most difficult policy shift as it tries to back away from flooding the financial system with ultra-easy money while at the same time convince investors that interest rates will stay near zero well into next year.

Encouraged by momentum in the economy last year, the Fed has trimmed asset purchases twice since December; it now buys $65 billion in Treasuries and mortgage bonds each month, to keep borrowing costs low and encourage investment and hiring.

Yellen said the Fed will "likely reduce the pace of asset purchases in further measured steps at future meetings" if economic data broadly supports policymakers' expectation of improved labor markets and a rise in inflation.

She said the purchases are not on a pre-set course, repeating the Fed's policy line.

A decidedly mixed run of data has raised questions over whether the U.S. economy can sustain the strength it showed in the second half of last year. Unemployment has dropped to 6.6 percent, from 7.9 percent a year ago, yet the fewer than 200,000 new jobs created over the past two months is insufficient to sustain last year's economic growth.

The two months of weak U.S. jobs growth and a recent selloff in emerging markets that also hit Wall Street could complicate things for the Fed.

Yellen said the Fed was "watching closely the recent volatility" adding: "Our sense is that at this stage these developments do not pose a substantial risk to the U.S. economic outlook. We will, of course, continue to monitor the situation."

Noting inflation remains below the Fed's 2 percent target, Yellen said "the recent softness reflects factors that seem likely to prove transitory, including falling prices for crude oil and declines in non-oil import prices."

The Fed will not let inflation run "persistently above or below" its 2-percent goal, she added.

Long concerned with the pain the 2007-2009 recession caused American workers, Yellen is sometimes seen as more dovish than Bernanke and thus willing to do more to stimulate the economy even if inflation could eventually ramp up as a result.

Yet Yellen appeared to want to reinforce the Fed's determination to halt the money-printing presses later this year while ensuring investors that a rise in interest rates remains a long way off.

Her testimony was the Fed's semiannual monetary policy report. It was released ahead of the 10 a.m. (1500 GMT) hearing of the committee.

Source: Reuters