Wednesday, 17 September 2014

Where Is The Weekly Stop And Reverse Trade Signals

There is some updated trade signals being written in the 101indicators's blog which is targeted more on long term technical trend trading. CPO Futures traders who have interest to know may just click on the last few posts in 101indicators's blog to digest. However, do really read all these articles properly before practicing it. 


Sept. 18, 2008: “we may not have an economy on Monday.”  -- Ben Bernanke

Six years ago today, the entire United States financial system was at a tipping point, about to fall into an abyss not seen since the stock market crash of 1929 and the resulting Great Depression of the 1930’s.

And now, 6 years after a week that began with the collapse of Lehman Brothers and ended with the biggest attempted financial power grab in the history of the U.S., many of the institutions and individuals who caused the crash continue to reap record profits and live the good life while tens of millions of American families continue to struggle and dig out of the wreckage caused by Wall Street’s too-big-to-fail banks, as compellingly illustrated by Robert Samuelson in the Washington Post this morning.

Here is the look back on that fateful week that shook the world’s financial stability and almost caused a second Great Depression, and a look forward to today where, even though Congress passed the landmark Dodd-Frank law in 2010, many of the problems that led to the crash have still not been fixed, including the systemic risks Wall Street’s too-big-to-fail banks continue to pose to the real economy.

6 years ago: The week that changed the world.

  • Sept. 12th, 2008 – Bernanke and Paulson summon heads of Wall Street’s biggest firms to an emergency meeting at Tim Geithner’s NY Fed office where they’re told there will be no bailout of Lehman Brothers.
  • Sept. 15th -  4th largest investment bank Lehman Brothers runs out of cash & files bankruptcy, Bank of America agrees to buy third largest investment bank Merrill Lynch and the Dow Jones plunges almost 500 points.
  •  Sept. 16th  - A money market mutual fund “breaks the buck” due to Lehman’s bankruptcy, starting a run on money market funds, and the Fed provides AIG, the world’s largest insurer, with its first bailout of $85 billion (on the way to a $182 billion bailout).
  • Sept. 17th – As lending locks up and banks stop lending to each other, Bernanke tells Paulson ‘We need a full-scale bailout of the entire financial system;’ the Dow drops 449 points, with investment banks Morgan Stanley and Goldman Sachs down 24% and 14% .
  • Sept. 18 – The Fed and global central banks pump $180 billion into markets to ease the cash crunch as Bernanke tells Congressional leaders that if the federal government doesn’t bail out the entire financial system “we may not have an economy on Monday;” The Dow drops another 410 points.
  • Sept. 19 – President Bush announces plan to use taxpayer money to buy toxic assets from Wall Street banks as the Treasury guarantees the entire $3.7 trillion money market fund industry; Dow gains 360 points
  • Sept. 20 – Treasury Secretary Paulson sends 3-page bill to Congress giving him $700 billion of taxpayer money to bail out Wall Street any way he wanted, but prohibiting transparency, accountability, oversight and judicial review; this shocking and unprecedented power grab caused a full scale revolt, including among Congressional Republicans.
  • Sept. 21 – As they teetered on collapse, the last two independent investment banks, Goldman Sachs and Morgan Stanley, were permitted by the Fed to convert virtually overnight to bank holding companies, enabling full access to all the Fed’s financial support, in effect, a massive unseen and unacknowledged bailout.

Other notable 2008 dates:

  • Sept. 24 – The crisis roils the presidential election as John McCain suspends his presidential campaign.
  • Sept. 29 - House rejects $700 billion bailout bill and Dow drops 778 points.
  • Oct. 3 – A heavily revised $700 billion banking bailout becomes law as President Bush signs emergency legislation creating Troubled Asset Relief Program (TARP) – this is in addition to the Treasury Department, the Fed and other banking agencies continuing to pour trillions of dollars into the financial system to prevent a financial and economic collapse.
  • Oct. 13 – “U.S. Forces Nine Major Banks To Accept Partial Nationalization”: The Washington Post.
  •  Nov. 23 – The Treasury, Fed and FDIC provide Citigroup with the first of multiple bailouts, ultimately totaling almost $500 billion.

6 years later:

  • While Wall Street’s biggest banks making near –record profits, millions of Americans continue to suffer.
  • At least 17 percent of U.S. properties remain seriously underwater – that’s more than 9.1 million homes.
  • As of July 2014, 5.7 million jobs still need to be created to erase the “jobs gap” and return employment levels to pre-recession levels.
  • Wages remain stagnant for millions of Americans, while salaries of CEOs from Wall Street’s biggest banks soar.
  • Too-Big-to-Fail banks are still TBTF: All 11 of the biggest banks fail “Living Wills” test from FED, FDIC.
  • Not a single senior executive at a Wall Street bank has been held accountable for causing or contributing to the financial crash.
  • Dept. of Justice has shielded illegal activity of the big banks from the public and prevented accountability of DOJ, other regulators and prosecutors as well as Wall Street itself.
  • The economic cost of the financial crisis, which includes lost jobs, homes, retirement savings, bailing out the banks and the deficits caused by all of that, is estimated to be at least $12.8 trillion.

Wednesday, 10 September 2014

What Is The Difference Of MPOB Data Against Bloomberg Survey And Why So Much?

MPOB had released the official demand and supply data on palm oil after 1230pm CPO Futures market closed. Here is the data being taken from previous post to compare.

MPOB August output is 2.032 million tons;
End month stock is 2.054 million tons; and,
Export is 1.437 million tons.

But, Bloomberg survey is
Aug.2014(Survey) July2014(MPOB) Aug.2013(MPOB)
Output 1.88 1.67 1.74
Stockpiles 1.95 1.68 1.67
Exports 1.38 1.45 1.53
Imports 0.011 0.013 0.0075

MPOB raised the Sarawak output with more than 30% may have contributed the higher total output for the August data! Peninsula Malaysia higher output is also near to 20% that make the figures bigger as compared to Bloomberg survey.

If export is not above 1.4 million tons, the end month stock will even look bad with over 2.1 million tons as all know that the export figures given by SGS and Intertek cargo surveyors was below 1.3 million tons.   

Monday, 8 September 2014

Indonesia keeps CPO export tax unchanged despite Malaysia’s move

(Good article from the Jakarta Post - Keep those data in your spreadsheet so that you can refer it again.)

Trade Minister Muhammad Lutfi ruled out Friday the possibility of raising the export duty on the country’s crude palm oil (CPO) as a response to Malaysia’s move to remove its export tax for the commodity.

The minister said the government would maintain the current export rates imposed on CPO products, although the export tax cut announced by Malaysia on Thursday would make Indonesia’s CPO products less competitive overseas.

Export tax on the commodity remains at 9 percent for September, its lowest level since November last year, as its global price fell further on weak demand. “It would be impossible for us to issue a new policy that does not comply with what has been laid out,” Lutfi told reporters at his office.

Malaysia, the world’s second largest palm oil producer after Indonesia, removed its export tax on CPO for September and October to help push up outbound shipments and avert a further slide in prices, which had already plunged to a five-year low, Bloomberg reported.

The tariff removal may boost Malaysia’s exports by 600,000 metric tons and help contain stockpiles at 1.6 million tons at the end of this year. The zero-percent duty may be extended as demanded by the industry and the Malaysian government will soon study the proposal.

Lutfi said that the government was anticipating a higher absorption of palm oil domestically as its mandatory fuel blending was executed.

Indonesia has raised the portion of palm oil derivative, fatty acid methyl ester (FAME), in blended fuels — both subsidized and non-subsidized — to 10 percent, up from 7.5 percent. Power plants are also required to use 20 percent biodiesel in their energy mixes.

The installed capacity of the domestic biodiesel facilities totaled 5.6 million kiloliters (kl) each year, while the utilized capacity is above 2 million kl.

The measure aims at reducing the heavy reliance on fuel imports, which has widened the country’s trade deficit and put pressure on the state budget due to ballooning energy subsidy expenditure.

The mandatory blending policy last year pushed down diesel fuel imports by 1.05 million kl, equal to US$831 million.

However, the implementation of the policy has been hampered by various obstacles, from price issues to infrastructure for distribution and biodiesel blending.

Local absorption of blended subsidized fuel will only reach 1.32 million kl this year, or 90 percent of the 1.46 million kl targeted earlier.

The Indonesian Palm Oil Producers’ Association (Gapkindo) executive director Fadhil Hasan said that the government should react to counter Malaysia’s move as it would certainly impact on local palm oil exporters.

“We will certainly be unable to compete with our rivals because our price is higher. We hope the government will take a similar move to maintain the competitiveness of our exports,” he said in a text message.

The export tax should be pushed down to at least between 2.5 and 4 percent to anticipate tighter competition in overseas markets, according to Fadhil.

Friday, 5 September 2014

Russia Prepares to Ban Indonesian Palm Oil !!!

TEMPO.COJakarta - The Russian government is attempting to limit the import of Indonesia’s palm oil into its country. Last April, Russian authorities submitted a notification to the World Trade Organization (WTO), which stated that the hydrogen peroxide content of Indonesia’s palm oil must not exceed 0.9 percent upon arrival at Russian ports.
"There are indications that Russia is deliberately doing so in order to further justify its imports from the Netherlands, which is cheaper," said Togar Sitanggang, a corporate affairs officer from PT Musim Mas, a palm oil exporter, yesterday.
Togar said Russian authorities knew that Indonesia could never meet such stringent requirements, because the average hydrogen peroxide concentration in Indonesian palm oil hovers around 5 percent. During the transport process, the concentration usually rises up to 8-9 percent. "The Russia's demand is unreasonable", said Togar. It must be noted that the average concentration of hydrogen peroxide in Indonesia’s palm oil has met the 5 percent international standard set by Codex.
The notification is expected to go into effect in October 2014. Palm oil exporters are beginning to look at other markets to keep the impact of the Russian import restriction to a minimum, said Togar.
The notification will only affect palm oil imported from Indonesia and Malaysia - which means that Russia could still import palm oils out of Rotterdam in the Netherlands, despite the fact that the average Dutch palm oil contains the same amount of hydrogen peroxide as Indonesian and Malaysian palm oil.
Togar concedes there might be other rationales behind the Russian move. For example, Russia might be considering to switch to soy oil, which has more usage than palm oil. What is clear, is that if the notification is approved by the WTO, then Indonesia needs to look at other markets, unless producers are willing to build palm oil refineries overseas to help ensure that the hydrogen peroxide concentration does not significantly increase during transport.
Previously, the directorate general of international trade at the Ministry of Trade Bachrul Chairi said Russia had a lot of potential to become one of Indonesia’s major trading partners. In 2013, Russia ranked as number 29th export destination for Indonesia, while trade volumes between Indonesia and Russia grew at an astonishing average rate of 45.1 percent per annum between 2009-2013.
As per 2013, Indonesia’s main exports to Russia include palm oil and its derivatives, footwear, coffee, copra, and rubber. On the other hand, Indonesia imports steel and/or iron and their derivatives, aircraft spare parts, military equipments, asbestos, and wheat.
Togar predicted that the notification will bring about a negative impact on Indonesia-Russia trade balance. Around 100,000-150,000 tons of palm oil needs to be exported elsewhere once the notification comes into effect.