08 July 2013

Economics anomaly, Croatia, Costs of a Rally

Economics Anomaly
Over the past week, we have seen usd rally sharply and the usd index is hitting new highs in its recent past. well when usd goes higher, you will usually see a number of changes like lower gold prices, lower commodity prices in general, lower crude prices too. but lower crude prices didnt happen and have rallied in the same direction of the usd.

back in 2007, we have seen crude [futures] prices rally from 120 to 147 while the spot prices are much lower, in fact the surplus is so severe that the buyers cannot store their crude onshore, they have to rent tankers to store them. tankers storage are much more expensive than onshore storage which eventually lead to a sharp fall of the futures prices of crude as more buyers take delivery in spot month, they have to sell them in order not to spend money storing them since many of the buyers are not genuine buyers but speculators.

so what is happening here? are we seeing a repeat of things happening?

there are two possibilities
  • a sharply lower usd or
  • sharply lower crude prices [read this blog - 'stock markets' in may]
which will soon unfold, no matter which direction, the impact will be explosive, so sit tight.

Croatia
this is a country you and i may have heard of, a famous tennis player is from here, but don't know much of its history or economics of it, but one thing you need to know is it is joining EU or it has joined EU in the past few days. amid all the problems EU is facing, it is hard to believe that any country would want to join it now, not in its hey days but when its economy has fallen on hard rocks.

we have a chinese saying that when everything is not smooth in the family or when parents or grand parents are seriously ill, then a marriage is arranged for the son/daughter, grandson to stir up fortune or good luck [ 沖喜 ], maybe EU officials have this in mind.

Costs of a Rally
hk has so many demonstrations/rallies that it has been named the city of rallies.
many believe that rallies are so common in hk is because many protesters are outsourced, if this is true then what is the costs of a rally?

on 1 july, it is estimated 100,000 have participated in the usual handover day rally. assuming half is outsourced and you pay 300-500 for a protester, then the costs is 15-25m hk dollars. you need deep pockets to do that.

No comments: