London copper near 3-week low; surplus on horizon

Monday 21st 03.36 GMT
London copper held near a three-week low on Monday as worries over the health of China's property sector and a build up in the country's stocks of the metal highlighted an expected market surplus in the second half.

Three-month copper on the London Metal Exchange was at $6,983.75 a tonne by 0235 GMT, just shy of this month's low of $6,960 hit in the previous session. LME copper fell 2.4 percent last week, its biggest weekly fall since mid-March.

"Recent Chinese data came in a little above market expectations, but some of the real estate market indicators are a little on the soft side," said analyst James Glenn of National Australia Bank (NAB) in Melbourne.

"That's significant to the metals complex, not just copper but also aluminium and zinc ... We're also generally expecting to see some more copper supply coming on line in the latter half of this year so that should help loosen the market," he added.

NAB expects copper prices to average $6,950 a tonne in the September quarter.

London copper stocks plunged by 75 percent to near six-year lows in June, stoking supply worries in the market. But stock levels have stabilised since then, while Comex copper stocks have climbed to eight-month peaks .

Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 28.9 percent last week. 

The most-traded September copper contract on the Shanghai Futures Exchange fell 1 percent to 49,440 yuan

($8,000), after earlier hitting a near one-month low.

Improving supply from mines has been feeding the uptrend in exchange stocks. Production at Collahuasi, one of the world's largest copper mines, will be slightly higher in 2014 than last year, the company's chief executive Jorge Gomez said on Friday.

Worries over falling property prices in China, the world's top copper consumer, also continue to taint the demand outlook for the metal.

Some of the wealthiest Chinese are paring their property investments and turning to private equity or overseas holiday homes, a sign of fading hopes that the once red-hot market can bounce back any time soon.

A survey showing U.S. consumer sentiment dipped in early July and an index of consumer expectations weakened for a third straight month also weighed on copper prices.

Investors are now eyeing flash manufacturing sector readings for China, Europe and the United States for trading cues.

The head of the International Monetary Fund warned on Friday that financial markets were "perhaps too upbeat" because high unemployment and high debt in Europe could drag down investment and hurt future growth prospects.
Copper speculators boosted net long position by 10,626 contracts to 48,994 in week to July 15, the highest since at least 2006, according to the latest figures from the Commodity Futures Trading Commission.

China lends Argentina $7.5 billion for power, rail projects

 Argentina signed deals on Friday to borrow $7.5 billion from China at a time when the Latin American country cannot tap global capital markets because of disputes over unpaid debt.

Among the deals signed, Argentine President Cristina Fernandez and her Chinese counterpart, Xi Jinping, agreed on a loan for $4.7 billion from the China Development Bank for the construction of two hydroelectric dams in Patagonia. China Gezhouba Group Corp  and Argentina's Electroingenieria SA won contracts last year to build the two dams, which will have a combined generating capacity of 1,740 megawatts.

The Chinese bank also granted a $2.1 billion loan to help finance a long-delayed railway project that would make it more efficient to transport grains from Argentina's agricultural plains to its ports.

"It's a day we can define as foundational in the relations between our two countries," Fernandez said after signing the deals.

China is Argentina's second-largest trading partner after neighbor Brazil. In 2013, Argentina's trade deficit with the Asian country increased more than 20 percent to $5.8 billion.

Argentina is the world's third-largest exporter of soy and corn. China is the main buyer of its soybeans.

Xi, China's first president to visit Latin America's third-largest economy in a decade, arrived in the capital city of Buenos Aires on Friday after participating in a summit of emerging economies of the BRICS nations - Brazil, Russia, India, China and South Africa - in Fortaleza, Brazil, earlier this week.

He also signed a three-year agreement for an $11 billion swap operation between the central banks of Argentina and China that will let the Latin American country pay for Chinese imports with the yuan currency.

"The exchange will mainly serve to facilitate investments in the currency of the country providing the funds and to strengthen the level of international reserves," the Argentine central bank said in a statement.

Argentina signed a similar deal with China in 2009.

The central bank could ask for the total or partial disbursement of the 70 billion yuan in exchange for pesos to invest it, or to exchange it to dollars to fuel its reserves, said an Argentine central bank official, who spoke on condition of anonymity.

Fernandez's government has imposed stringent import and capital controls to safeguard dwindling foreign reserves, which it needs to pay its debts. It has been virtually shut out of global credit markets since staging a massive 2002 default.

Hopes that Argentina's government might access markets again soon hinge on the country reaching a deal with holdout creditors who rejected its debt restructuring in 2005 and 2010.

Fernandez said the deal between the two central banks could offer "stability in exchange rates at the moment we are, as a country, suffering speculative attacks by vulture funds."
Source: Reuters

Iraqi Forces Take Military Base In Fight With Islamist Militants

    The WSJ reports,"Camp Speicher, the headquarters for U.S. forces in northern Iraq during the 2003 invasion and subsequent war, has become a focal point in the fight between Iraqi forces and Islamist militants in the country's north. The battle for the former American base holds significance both because of its strategic location and in the propaganda war between the two sides.

Militants from the extremist group that calls itself Islamic State seized Camp Speicher—now an Iraqi air force and military base—shortly after taking control of Tikrit on June 11. Fighting flared on and off around it until government forces pushed militants out earlier this month in a major ground and air campaign. Failing to keep full control of the camp, some 37 miles northwest of Tikrit, would deprive Iraqi forces and allied militias of a strategic staging ground, local officials and military analysts say.

It would render nearly impossible Iraqi troops' weekslong effort to retake Tikrit, the provincial capital of Salahuddin, and to check the insurgents' advance toward Baghdad. Ahmed Abdulla al-Jubouri, governor of the province, called the former U.S. base "the basic axis to recapture Tikrit."

In recent days, both sides have claimed victory at Speicher, a base named after a U.S. Navy pilot shot down over Iraq during the first Gulf War. On Friday, an Islamic State statement posted online said 12 suicide bombers penetrated the base and fighters took over the airfield. The militants, who formerly called themselves the Islamic State of Iraq and al-Sham, or ISIS, claimed they burned several aircraft and helicopters, destroyed the electronics and communications systems and killed dozens of army soldiers in the operation.

Government officials denied the militants' claims over the weekend, saying they repelled two incursions on Thursday and Friday and continued to hold the militants back on Saturday. On Sunday, state-run television aired footage of an army victory tour through the base. A news report showed corpses and body parts strewed in the desert that a correspondent identified as the remains of the foreign jihadist suicide bombers attempting the incursions.

Two Iraqi officials, including a military official on the base, reached by telephone said elite counterterrorism forces backed by Shiite militiamen had secured the base in the wake of the Islamic State attack on Friday.

Since then, militants have intermittently fired on the base's surveillance towers from their positions surrounding it, the official at the base said. But no major assault has taken place since Friday, signaling the special forces have been—at least for 48 hours—successful in their continuing attempts to repel the incursions.

The counterattacks have also proved an important public-relations exercise for an army struggling badly to keep militants from advancing, despite the enlisting of thousands of volunteer Shiite fighters, hundreds of which have joined troops at Camp Speicher, according to local officials.

"Camp Speicher is safe. It is unreachable to the insurgents," said a special-operations brigade leader, identified as Staff General Karim, to Al-Iraqiya TV. He said the suicide bombers were only able to penetrate the base because its watchtowers were so far apart and visibility was made worse on an especially dusty Friday night. "We hope we will be taking new measures in the coming days to further secure the base," he said.

The news broadcast also showed soldiers firing into the air and declaring victory at the base, as a reporter narrated: "They are killing terrorists and takfiris," using the word for radical Islamists. "The terrorists are terrified here at Speicher, and all over Salahuddin."

For the government, the base is an island of control in a sea of territory captured by Sunni insurgents, allowing government forces refueling, resupply and rest in an area that is otherwise totally under the militants' control. The base lies to the west of the main road connecting Tikrit to Beiji, home to Iraq's largest oil refinery, and to Mosul, which fell to the Islamic State last month.

Government troops were successful in beating the group out of the base last week partly due to an aerial bombing campaign that left the militants walking for hours in the dark—rather than risk detection and bombing—to mount their attacks.

The insurgents' push into the base, once home to American fast-food chains and other amenities for U.S. troops in the war, was a sophisticated operation, according to accounts by local officials.

Wanas al-Jabara, a tribal sheik from the province who fought al Qaeda in Iraq after the war, said the attack was "the fiercest one since they declared what they call the Caliphate, the Islamic State."

The insurgents walked dozens of miles in the desert before breaking into Speicher from Tower Number 5 at around dawn, he said. At least one suicide bomber blew himself up near a runway, burning one helicopter and damaging two others".

Asian stocks edge higher, upbeat on US earnings

Asian stock markets inched higher on Monday as investors set aside geopolitical concerns to focus on the generally upbeat flow of U.S. corporate earnings ahead of a host of results due this week.

Volumes were light, however, with Japanese markets on holiday. MSCI's broadest index of Asia-Pacific shares outside Japan  added 0.13 percent, while South Korea  put on 0.4 percent.

A crowd of U.S. companies report this week, ranging from Apple Inc to McDonald's Corp , Coca-Cola Co and Caterpillar Inc .

Thomson Reuters data showed that of 82 companies in the S&P 500 that had reported earnings through Friday morning, 68 percent beat Wall Street's expectations, roughly in line with the 67 percent rate for the past four quarters and above the 63 percent rate since 1994.

The Dow <.DJI> ended Friday up 0.73 percent, while the S&P 500 <.SPX> gained 1.03 percent and the Nasdaq <.IXIC> 1.57 percent. For the week, the Dow rose 0.9 percent, S&P 500 gained 0.5 percent and the Nasdaq added 0.4 percent.

Geopolitical concerns kept U.S. Treasuries and German debt well underpinned. U.S. 10-year yields were steady at 2.48 percent on Monday, while German bunds were yielding just 1.16 percent having neared all-time lows.

The U.N. Security Council is due to vote Monday on a resolution that would condemn the downing of the Malaysian passenger plane.

U.S. Secretary of State John Kerry on Sunday laid out what he said was overwhelming evidence of Russian complicity in the downing of the airliner.
In Gaza, Hamas's armed wing said on Sunday it had captured an Israeli soldier in a nearly two-week military offensive that has killed hundreds of Palestinians and 13 Israeli soldiers.

Kerry will travel to Cairo on Monday to meet with Egyptian officials about the crisis.
After an initial bout of risk aversion, major currencies have settled into an eerie clam. The dollar index <.DXY> was steady at 80.513, having retreated from a one-month peak last Friday when the euro bounced off a five-month trough of $1.3491.

Traders said buying interest below $1.3500 helped squeeze the euro up to $1.3531 . The common currency should see solid support at $1.3460/80, an area that had provided a floor on several occasions in the past 10 months or so.

The greenback was at 101.35 yen after rebounding from a one-week low of 101.09. The euro stood at 137.14 yen , off a five-month trough of 136.71.

Gold was idling at $1,310.35 an ounce, after last week's choppy action saw it swing between $1,339 and $1,292.

Crude oil resumed its decline after enjoying only a brief rally last week. Brent was down 17 cents at $107.04 a barrel. U.S. crude fell 29 cents to $102.84 a barrel.

Source: Reuters

China's forex purchases likely to rise in June

   Foreign exchange purchases in June will rise significantly from May, Lian Ping, chief economist at Bank of Communications, was quoted by Saturday's China Securities Journal as saying.

Lian noted that June's exports are very likely to move up following improvements from March to May, probably resulting in a bigger trade surplus and more funds available for foreign exchange.

In previous months, bowing to downward pressure, individuals and banks preferred to hold forex and cross-border direct investment has slowed.

As the Chinese economy is showing more signs of stabilizing and targeted measures take effect, there will likely be more capital inflows and more forex settlements in June, factors pointing to increasing funds available for foreign exchange, according to Lian.

Lian forecast yuan funds available for foreign exchange will see continuous month-on-month increases in the second half of 2014, but the increases will be smaller from the same period last year.

The central bank is expected to release June's forex purchase data next week.

Source: Xinhua

Xinhua Insight: BRICS bank boosts Shanghai's profile,vise for more clout

    The BRICS's answer to an emerging market infrastructure funding facility became a reality this week, with the announcement that a development bank would be established and headquartered in Shanghai.

The bank has the potential of gaining greater sway in global finance that matches with the bloc's growing economic might.

The BRICS emerging economy nations - Brazil, Russia, India, China and South Africa - have agreed to headquarter the development bank in China's financial hub Shanghai. India will get the bank's first presidency and a regional office will open in South Africa.

"It is only natural for the headquarters to go to Shanghai. Of all the BRICS nations, China is the most populous country and the size of the economy is also the largest," said Zhang Haibing, a researcher with the Shanghai Institutes for International Studies.

Shanghai has aspired to join the ranks of regional financial centers. "A lot of international organizations operate in cities like New York, Tokyo and London. A city cannot truly become an international metropolis without the presence of global institutions, so the BRICS bank is what Shanghai needs to boost its global profile," said Zhang.

Analysts say Shanghai will have to make itself more friendly to international institutions. Improvements will include increasing its openness and better governance, while policies and services should be adapted to meet the needs of an international workforce.

The bank, according to Zhang, will also have potential to add jobs in a range of services, such as hospitality, catering, and conferences. Also,young people will gain more exposure to global opportunities in Shanghai. "It will allow aspiring Chinese professionals to work at international financial institutions within Chinese borders," she said.

The BRICS nations constitute one fifth of the world's economic output and account for half of global economic growth. Yet their representation at the International Monetary Fund (IMF) does not match their growing economic might.

Developing countries have long complained that loans from organizations like the World Bank have always come with strings attached and thus advocated reforms at these institutions.

"The establishment of a BRICS bank may spur the IMF and World Bank to do more to address the concerns of the large, fast-growing emerging economies," said Mark Williams, chief Asia economist at Capital Economics, in an e-mail to Xinhua.

The move to create a development bank for emerging economies marks a shift in how BRICS nations seek solutions to fund their infrastructure programs as frustration has mounted over the slow-moving reforms at established funding facilities.

"Credit supply for infrastructure programs remains tight across the world. The World Bank and some other regional funds have limited resources and the assistance sometimes is not provided in a way to serve the best interests of developing nations," said Zha Xiaogang, head of the Shanghai-based Institute for World Economy Studies.

Jim Yong Kim, president of the World Bank Group, said at a press conference in Beijing last week that the World Bank welcomes new establishments like the BRICS bank and would work with them once they became a reality to meet the infrastructure needs of developing economies.

Kim said the investments currently extended by organizations such as the World Bank to help infrastructure building in developing countries is far from enough to meet these countries' needs, estimated to be above 1 trillion U.S. dollars each year.

The BRICS nations will commit 100 billion U.S. dollars to the bank, which is expected to start lending in 2016. An initial subscribed capital of 50 billion U.S. dollars will be equally shared by the five countries.

"While the BRICS bank may not cover the total financing needs of all emerging economies, a 100 billion fund is enough to make a difference to the infrastructure projects in some smaller emerging economies with fiscal problems and a volatile currency," Zha said.

He added that China would also provide valuable input to infrastructure building across emerging countries as its own infrastructure construction, along with exports, had kept economic growth at a double digit rate for about a decade.

"When it comes to infrastructure, China has had unrivaled advantages, given its technical capabilities and experiences gained from various projects. Experiences gained through working on complicated terrains have also added to China's sophistication in infrastructure building across a broad range of geographical conditions," Zhang Haibing said.

Yet analysts say China would also share with other emerging economies some of the problems it has been struggling with in building infrastructure, particularly risks stemming from reckless financing by local governments and low efficiency caused by mis-allocation of resources.

There are also concerns over how the newly created fund will differ from existing lenders that have been actively funding infrastructure projects in the developing world.

"It is not clear to me what a BRICS bank can offer that the China Development Bank or Brazilian Development Bank doesn't already offer. They are both already big players," Mark Williams said.

"The only difference it seems to me is that the interventions of a BRICS bank will have a more multilateral feel, but we'll have to wait and see whether in practice the need to achieve a consensus between the BRICS nations over priorities is a hindrance or a help," he added.

The difficulties to strike a consensus among the group of nations are already evident in the debate over where to headquarter the bank just hours ahead of its declaration. Coordinating the various and sometimes, competing demands among BRICS nations could pose challenges ahead.

"It's normal to have differences among nations. The fact that BRICS nations are taking time to reach an agreement speaks of their prudence in decision-making. After all, there are geopolitical and economic stakes involved," said Zhang Haibing.

Chinese and Venezuelan Central Banks sign a cooperation agreement

   The central banks of Venezuela and China signed a cooperation agreement here Friday aimed at promoting the exchange of information on statistical methodologies, monetary policy strategies and funding mechanisms.

Zhou Xiaochuan, governor of the People's Bank of China, said the agreement is a breakthrough for both sides to enhance economic ties.

It is important for the two central banks to share experiences, especially on monetary policies and financial stability, Zhou added.

Zhou's Venezuelan counterpart, Nelson Merentes, described the deal as "historic," saying it would facilitate bilateral collaboration.

Merentes stressed that the two institutions have to work together as ties of two countries are getting ever closer.

"We must take into consideration that more and more Chinese companies" are investing in Venezuela in various fields, such as agriculture, livestock, construction, mining and telecommunications, he said.

Source:Xinhua

Chinese FM : Xisha Islands are inherent part of China

CCTV News

JA Chinese oil rig that was at the center of the recent row between China and Vietnam has finished its operations and been relocated. China says the rig was due to be closed anyway. It had been operating in an area of the South China Sea that's claimed by both China and Vietnam. The row sparked a number of clashes, both at sea, and inside Vietnam, where Chinese businesses and citizens were targeted.

Over two months after deploying its rig, the China National Petroleum Corp. finished its drilling in the South China Sea. Signs of oil and gas were detected in the area called the Zhongjiannan basin. It’s an area that the company has been exploring since 2004.

"When we started the project in 2004, we wanted to evaluate the oil reserves of the whole South China Sea, especially in the Zhongjiannan basin, which is a key area.," Qiu Zhongjian, geologist with Chinese Academy Of Engineering, said.

A preliminary analysis of the geological data in the basin was done, but more information will be needed.

"The area has the basic conditions and potential for oil exploration, but extraction testing cannot begin before a comprehensive assessment of the data is done," Qiu said.

If enough gas is found and the area put into production, China will have its first energy field in the South China Sea.

The drilling process was disrupted by Vietnam, who sent armed boats to the location of the oil rig, claiming that the Chinese company was operating in their waters.

But the claim was strongly opposed by China.

Foreign Ministry spokesman Hong Lei reiterated China’s stance on the issue.

The Xisha islands are an inherent part of China. Chinese companies were operating in waters off the islands, totally within China’s jurisdiction, it is a domestic issue. China strongly opposes any unreasonable disruption from Vietnam regarding the drilling of the Chinese enterprise. China has taken necessary measures for the safe operation of the drilling.

The drilling rig will move on to another project southeast of Hainan island.

Chinese President Xi Jinping brings fresh investments to Key areas in Argentina

Source: Xinhua

China has become Argentina’s second largest trading partner and a major source of investment. Argentina is China’s fifth largest trading partner in Latin America. The relation is further fueled by the major economic agreements signed on Friday in Buenos Aires, including the financing by the Beijing government of two hydroelectric dams in the South American country. 

It’s been ten years since Argentina and China first signed a strategic alliance which has now continued to strengthen both their economies and trade. The arrival of China’s President Xi Jinping in Buenos Aires consolidates that alliance and brings fresh investment to key areas in Argentina.

With more than two-billion dollars of financing, China is providing trains and materials for Argentina to revamp its ailing railway service and there is also investment in other key infrastructure projects.

"Argentina is in a partnership with China in the making of an energy project here in Argentina where Chinese companies put money, Argentina puts in knowledge for this energy venture in the south of the country," Nicolas Tereschuk, political analyst said.

China will loan Argentina nearly five-billion dollars for the construction of two hydroelectric dams in Patagonia, which will bolster Argentina’s energy production. The project will take the name of Jorge Cepernic, a former governor, but also Nestor Kirchner, the late former president who promoted the special alliance with China back in 2004.

Chinese investment and trade with Argentina is diverse. With one of the largest shale oil and gas reserves in the world, and also as one of the largest soy producers, Argentina also has plenty to offer.

"At the start of the 1990s, China exported soy and oil. Now it doesn’t have enough soy and oil to supply its own demand, and is the main importer of soy and oil. So Argentina is the third most important for not only soy, but also soy derivatives, and China is the main client," Gustavo Girado, Asia Y Argentina consultant said.

The relationship between Argentina and China continues to grow. In 2013, trade between the two reached 15 billion dollars. This state visit continues to develop a partnership that stretches across sectors such as energy, agriculture and banking - sectors that are vital for both countries.

During the trip, Xi also signed a three-year agreement for an $11 billion swap operation between the central banks of Argentina and China. This will let the Latin American country pay for Chinese imports with the yuan currency.

Over the weekend, the United States embassy in Ukraine released an official unclassified US intelligence summary collating its evidence of a Russian link to the shooting down of MH17.

 Source: theguardian

Updated 55 min. ago

Australia pushes for international access to crash site - live updates

Over the weekend, the United States embassy in Ukraine released an official unclassified US intelligence summary collating its evidence of a Russian link to the shooting down of MH17.

You can find it here

Here are some interesting grabs:

Over the past month, we have detected an increasing amount of heavy weaponry to separatist fighters crossing the border from Russia into Ukraine. Last weekend, Russia sent a convoy of military equipment with up to 150 vehicles including tanks, armored personnel carriers, artillery, and multiple rocket launchers to the separatist. We also have information indicating that Russia is providing training to separatist fighters at a facility in southwest Russia, and this effort included training on air defense systems.

...

At the time that flight MH17 dropped out of contact, we detected a surface-to-air missile (SAM) launch from a separatist-controlled area in southeastern Ukraine. We believe this missile was an SA-11. 

...

Video posted on social media yesterday show an SA-11 on a transporter traveling through the Krasnodon are back to Russia. The video indicated the system was missing at least one missile, suggesting it had conducted a launch.

Sale-Leasebacks Ease Italy's Real-Estate Jam

       The WSJ reports,"many foreign investors that have shown up in Italy to buy property from financially stressed governments and institutions have been discouraged by the slow pace of sales.

But there is a recent exception to this rule: Deals have begun to flow out of two funds that were set up by the Italian government in 2004 to do sale-leasebacks of government-owned property.

Blackstone Group  LP, Cerberus Capital Management, LP, and Och-Ziff Capital Management Group  are buying properties from these funds that are occupied by barracks, police stations, ministries and other government offices, according to people familiar with the matter. The total value of three deals expected to close this summer is over €600 million ($816 million), people said.

The two 10-year-old funds are owned by Italian banks and institutional investors. One of them—Fondo Immobili Pubblici, managed by Investire Immobiliare SGR SpA—purchased €3.7 billion of government-occupied properties and leased them back to the government. The other—Patrimonio Uno, managed by BNP Paribas Real Estate—purchased and leased back €700 million of buildings.

Together, the funds own hundreds of properties. The recent sales won't make a dent in Italy's public debt of over €2 trillion because the funds aren't owned by the government. But the deals are a sign that the slow recovery of the European economy is increasing demand for Italian property.

More deals are expected. Fondo Immobili Pubblici is scheduled to liquidate by December 2019, with a possible extension to 2022. Patrimonio Uno is scheduled to liquidate by December 2017, with a possible extension to 2020.

Sale-leasebacks are popular with investors because they offer a guaranteed steady rent stream as long as the leases last. The Italian state leases over 11,000 properties and pays €1.25 billion annually in rents, according to data from Agenzia del Demanio, the agency that manages the state's real-estate assets.

Lately, many sale-leaseback deals with the Italian government have taken on a new level of risk. Under recent laws passed in the wake of the financial crisis, the government has given itself rights to cut its rents by 15%, and to break a lease without notification to landlords.

Overall, commercial real-estate sales volume in Italy has been increasing as the euro zone has recovered from the financial crisis. CBRE Group Inc. predicts that there will be about €5 billion in Italian commercial-property sales in 2014, compared with €4.6 billion in 2013.

Blackstone was one of the most-active buyers of Italian real estate in the first quarter of 2014, with acquisitions of a portfolio of logistics warehouses and another portfolio of office and retail assets.

Now, Blackstone is in exclusive talks to buy a Fondo Immobili Pubblici portfolio of nine office buildings for €240 million, according to people familiar with the matter. The portfolio includes offices of the Italian Revenue Services and of the Ministry of Finance in the Northern cities of Turin and Pavia.

The Italian government has been reluctant to rely on new sale-leaseback deals to address its current financial problems. These deals provided cash flow in the short term but bound the state to pay millions of euros in rents. They aren't seen as a long-term solution to reduce Italian public debt.

The government has focused instead on a program to sell islands, castles and other real-estate assets that it currently doesn't use. This effort has been slowed because investors haven't been willing to pay the government's prices".