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Wednesday, June 22, 2011

Chinese Money

It makes me twitch:
The seven-day repo rate gained 47 basis points, or 0.47 percentage point, to 8.81 percent as of the 4:30 p.m. close in Shanghai, according to a weighted average rate compiled by the National Interbank Funding Center. It touched 8.93 percent, the highest level since October 2007.

The 14-day repo rate declined 125 basis points to 7.34 percent, the biggest drop since Feb. 1. The slump in longer-term rates shows the cash shortage will probably ease from the start of next month, said Liu.
Banks trying to come up with their reserves.

Short summary of the rest today - Fed Heads talk. Plenty of oil, high prices. Housing and building continues to suck big time, but fortunately it can hardly get much worse. Same old, same old. Japanese situation could hardly be worse, but appears to be about to get considerably worse.

The leading edge of instability for the week is Japan/China and the downgrade in monsoon forecast for India.

Diesel supplied four week MA -5.7% YoY. Total -2.7%. For comparison purposes, in the comparable week of 2008 (June 18th), the distillate four-week MA was only down 0.4%, and total product was down 1.3%. This is pretty darned serious. Inventories of product and crude were much lower then. In April, (last report) the ATA truck tonnage index was only down 0.7%, but this must have degenerated. In June of 2008, the ATA truck tonnage index rose 1.3% after rising 0.5% in May of 2008.

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