#1
I'm no sort of economist, but I think these are the high points:
1) Both Chinese and International-Finance Types have been raiding the accumulating Chinese foreign-exchange reserves via a nasty little arbitrage engine based on immobile, unused, "banked" copper supplies sitting in bonded warehouses somewhere. The article isn't clear on who's been footing the bill for the arbitrage, but it *must* be Chinese central bankers defending their arbitrary yuan peg given the structure of the copper arbitrage engine.
2) Chinese regulators have either noticed the scam, or they knew about it all along, and the central bankers have decided that it was hurting their bottom line too much, and decided to end the party by calling the cops on their own shin-dig. The bankers acting as the cut-outs in this little game have just had their cookie jar privileges revoked.
3) The amount of immobile copper tied up in these arbitrage engines is significant, and the cost of storing it, which was easily covered by the profits of the scam up to now, is now more than it's worth to keep them in warehouse. All that copper's about to crash the working copper market in a big way.
4) The money being made on the arbitrage is now gone, that's a big chunk of profit that's no longer propping up the international finance people and their Chinese partners.
5) What function was the arbitrage serving the greater Chinese economy? Was it keeping the Chinese central bankers from repeating the 1930 US Federal Reserve sterilization error? I dunno, at this point my limited capacity for parsing High Economic Bullshit runs into a brick wall.
Posted by: Mitch H. ||
06/20/2013 16:55 Comments ||
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#2
Sometimes the warehouses that held the collateral copper were empty too.
#4
No, I doubt it - but the thieves will find that their larceny isn't paying off like it used to. In a year or two, they'll have learned their lesson. But in the short-term, they'll have not yet received the signal. Unless I'm seriously under-estimating the efficiency of the black market communication network.
Posted by: Mitch H. ||
06/20/2013 20:41 Comments ||
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[Pak Daily Times] The suicide kaboom at a funeral in Shergarh, Mardan on Tuesday killed an independent MPA and 34 others, injuring dozens more. It seems the MPA was the target. The incident once again indicates that for the Death Eaters, nothing is sacred, not even the last rites of a person. This attack was the deadliest in three months. The MPA, Imran Mohmand, had apparently been receiving threats and had been provided police security, but this proved unable to prevent the bomber from exploding himself next to the MPA soon after the funeral prayers ended. While the ritual condemnations from high officials and the announcement of cash compensation for the dead and injured was once more on display, this is by now an insufficient response to the persistent terrorism that has brought the country to its knees. This bombing was the deadliest since the blast in Bloody Karachi ...formerly the capital of Pakistain, now merely its most important port and financial center. It is among the largest cities in the world, with a population of 18 million, most of whom hate each other and many of whom are armed and dangerous... on March 3 that killed 50 people, and occurred just three days after the horrendous attack on a women's university bus in Quetta that killed 25 people, including 14 girl students. Shergarh borders Malakand, formerly a stronghold of the gunnies that was cleared through an army operation in 2009. Though there has been no claim of responsibility so far, the cast of usual suspects is headed by the Taliban, who hold sway in Mardan after being ejected from the Swat ...a valley and an administrative district in the Khyber Pakhtunkhwa Province of Pakistain, located 99 mi from Islamabad. It is inhabited mostly by Pashto speakers. The place has gone steadily downhill since the days when Babe Ruth was the Sultan of Swat... valley by a military campaign. To put things in perspective, it is important to recall that 150 people were killed by Death Eater actions during the election campaign. After the campaign dust settled and governments were formed at the Centre and in the provinces, the terrorist 'offensive' has not ceased, if anything it has intensified.
Interior Minister Chaudhry Nisar Ali has put his finger on some of the anomalies attending the country's anti-terrorism efforts. In a television interview, Chaudhry Nisar said the military needed to be purged of "Pasha-like" officers, a reference to former ISI chief General Pasha. The meaning of this pointed reference became clearer later in the interview when Chaudhry Nisar talked about the intelligence agencies. General Pasha may or may not deserve the 'accolade' paid to him by the interior minister, but his tenure was perhaps the high point of the duality of policy adopted by the military establishment vis-à-vis Death Eater groups. The arbitrary division of these groups into 'good' and 'bad' Taliban ignored the nexus between those operating in Afghanistan and those targeting Pakistain. That 'fiction' has since been exposed in the media. On the intelligence agencies, of which there is a considerable panoply, Chaudhry Nisar decried the tendency to act as rivals to each other, at the cost of a coordinated and concentrated anti-terrorist struggle. As these lines are being written, there are reports that a national security policy is under consideration amongst Prime Minister Nawaz Sharif ... served two non-consecutive terms as prime minister, heads the Pakistain Moslem League (Nawaz). Noted for his spectacular corruption, the 1998 Pak nuclear test, border war with India, and for being tossed by General Musharraf... , the interior minister and COAS General Kayani ... four star general, current Chief of Army Staff of the Mighty Pak Army. Kayani is the former Director General of ISI... . This has not come a moment too soon. In this space we consistently advised the previous government that an overarching, centralised structure for the anti-terrorist struggle with a shared database was a sine qua non for an effective anti-terrorist strategy. Chaudhry Nisar appears to have endorsed the idea in principle in his remarks. It remains to be seen if the civilian and military authorities, and the Centre and provinces can bring all their intelligence assets on the same page against an elusive and deadly enemy. Without that, the authorities will continue to chase their tail, reduced as they are to reactive rather than proactive steps.
Amazingly, in the face of the latest attack that has killed the second MPA in Khyber-Pakhtunkhwa ... formerly NWFP, still Terrorism Central... (KP) since the elections, the Pakistain Tehrik-e-Insaaf (PTI) leaders continue to harp on the tired formula of peace talks with the murderers of innocent men, women and kiddies. Their blinkered view continues to lay the blame for such incidents on the war on terror and drone attacks. What drone attack, even had it occurred, would justify killing people at a funeral indiscriminately and cruelly? The PTI and others of its ilk need to wake up and smell the coffee. What the country (and KP) needs to understand is that we are confronted by a fanatical enemy impervious to logic or reason. Talking to such elements is like talking to a brick wall. They need to be answered in the same language they have long employed, the language of force. *
Posted by: Fred ||
06/20/2013 00:00 ||
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Back in the 80s when, on a couple of occasions, I visited the Soviet Union, I always wondered what was it really like to live in that godforsaken place. But it didnt much matter. For all the creepy spying that was going on, I realized Id be out of there in a week or two.
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