china confidential
Wednesday, November 19, 2008
Sources: GE Could Close or Merge CNBC
Dateline USA....
America's premier cable TV business news network, CNBC, could be cut back, shut down, or merged with its sister network, MSNBC, which specializes in political news.
China Confidential has learned that CNBC's principal parent company stockholder, General Electric's NBC unit, is quietly drawing up contingency plans for CNBC in case the U.S. plunges into a 1930s-style depression--or worse. The feeling at GE (NYSE: GE), according to company sources, is that cable TV audiences will desert CNBC in droves--and advertising will practically disappear--in a worst-case scenario.
What government does or does not do would be much more important and interesting than anything so-called corporate America does, sources say.
CNBC is owned by NBC Universal, a media and entertainment company formed in May 2004 by the combination of NBC with Vivendi Universal Entertainment--part of the French media group, Vivendi Universal (now Vivendi SA). GE owns 80% of NBC Universal with the remaining 20% owned by Vivendi SA (EPA: VIV).
MSNBC is owned 50-50 by NBC Universal and Microsoft. MSNBC, like CNBC, shares the NBC logo of a rainbow peacock.
China and Peru Agree on Free-Trade
China and Peru have successfully concluded talks for a free-trade agreement that will strengthen ties between two of the world's fastest growing economies.
The pact will be China's second agreement with a resource-rich country in Latin America, whose exports it needs to fuel a roaring economy.
Chinese President Hu Jintao is visiting Peru as leaders from 21 economies gather this week in Lima for the Asia-Pacific Economic Cooperationsummit.Soybean Prices Ease Despite Strong Global Demand
Dateline USA....
Chicago Board of Trade soybean futures rose slightly Wednesday morning as strong Chinese demand and dry weather in Argentina offset the economic gloom gripping wider markets. But soy and grain futures eased later in the day in tandem with other commodities, including crude oil and industrial metals, as concerns about a deepening global recession affected all markets.
Chicago Board of Trade soybeans ended 5 cents lower at $8.97 a bushel, holding within the roughly $8.72 to $9.22 trading range of the past week.
The good news for soybeans is that while prices maybe dropping, there is strong underlying demand for the crop. This gives soybeans some solid fundamentals on which prices could be based in the future. American farmers have been holding on to their crop, and that should slow the downward progression of prices.
On the downside, the strength of the U.S. dollar has limited countries' ability to buy U.S. soybeans.Exxon and TPAO Ink Black Sea Exploration Deal
Foreign Confidential....
Exxon Mobil Corp. (NYSE: XOM) and Turkey's state-run oil company, TPAO, signed a deal Wednesday for the joint exploration and development of oil and natural gas off its Black Sea coast.
Turkey imports almost all of its oil and has turned to a policy of prospecting for offshore oil in the Mediterranean and the Black Sea in order to reduce dependence on foreign imports.
TPAO estimates that the Black Sea may hold some 10 billion barrels of oil, which would cover Turkey's oil needs for the next 50 years.
"I hope that this joint venture will be crowned with the discovery of oil and natural and that our dependence on foreign countries will be reduced, or even eliminated," Turkey's Energy Minister Hilmi Guler said at a signing ceremony.
Exploration costs could mount to $450 million (euro355 million), Guler said. Developing resources could reach $20 billion (euro15 billion), the minister added.
The exploration will take place off the coast of the Black Sea port cities of Samsun and Kastamonu, Guler said.
Turkey hopes to start producing oil from the Black Sea by 2015.
Turkey has signed a similar Black Sea oil exploration deal with Brazil's Petrobas.
- APGold Bugs Suspect Manipulation, Fear Confiscation
Foreign Confidential....
Gold bugs and gold standard advocates around the world are increasingly attracted to a new conspiracy theory--that the world's central banks are manipulating the price of gold down ahead of using the precious metal as the basis for a new financial system and confiscating ordinary citizens' gold.
It's a sign of the times that serious investors and analysts are thinking in these terms.Nightmarish Nuclear News: Russian Reactor for Venezuela, as Iran and Syria Stonewall IAEA
The Guardian reports on a new foreign policy challenge for the incoming Obama administration--plans for a Russian-made nuclear reactor in Venezuela.Russia's deepening strategic partnership with Venezuela took a dramatic step forward yesterday when it emerged that Moscow has agreed to build Venezuela's first ever nuclear reactor.
President Dmitry Medvedev is expected to sign a nuclear cooperation agreement with his Venezuelan counterpart, Hugo Chávez, during a visit to Latin America next week, part of a determined Russian push into the region....
The prospect of a nuclear deal between Moscow and Caracas, following a surge in Russian economic, military, political and intelligence activity in Latin America, is likely to alarm the US and present an early challenge to the Obama administration.
"Hugo Chávez joins the nuclear club," Russian's Vedomosti newspaper trumpeted yesterday.
Venezuela's socialist leader said the reactor may be based in the eastern state of Zulia. He stressed that the project would be for peaceful purposes. As if to underline that point, four Japanese survivors from the Hiroshima and Nagasaki bombs visited Venezuela this week at the government's invitation.
The energy ministry, which is scouting locations, said the project was at a very early stage. A report which mooted a nuclear reactor long before Chávez came to power has been dusted off.
Despite abundant oil reserves, Venezuela's energy infrastructure is creaking and prone to blackouts. A nuclear reactor would enable the country to utilise its rich uranium deposits and allay criticism that the government has neglected energy investment.
More importantly for Moscow and Caracas, a nuclear deal will showcase a partnership which advocates creating new "poles" of power to check American hegemony.
Nick Day, a Latin American specialist, said the nuclear deal was deliberately timed to pile pressure on the US administration during a moment of transition and weakness.
"Russia is manoeuvring hard in the time between Obama's election and his inauguration. What the Russians are trying to do is to set up a chessboard that gives them greater mobility in negotiations when he [Obama] comes to power," Day said.
He added: "Russia's message is: 'We can exert influence in your backyard if you continue to exert influence in our backyard. If you don't take your missiles out of Poland and end Nato expansion we're going to increase our influence in Latin America and do things to provoke you.'"
In other nuclear news, Bloomberg reports:Iran and Syria have failed to provide sufficient assistance with two separate investigations into suspected clandestine nuclear work, the United Nations atomic agency said.
"Iran has not offered any cooperation with the agency'' to clear up allegations that it has sought to develop a weapon, the Vienna-based International Atomic Energy Agency said in a report.
A Syrian site bombed by Israel in September 2007 on suspicion that it was an undeclared atomic reactor had ``significant'' quantities of uranium particles, and shared some characteristics of a reactor, the IAEA said. The UN agency said it hasn't yet received documentation to support Syria's stance that it was a conventional military facility.Corrupt Karzai Regime Crawling to the Taliban
Foreign Confidential....
Where is the outrage?
More than seven years after 9/11, the war in Afghanistan is going very badly.
In fact, the situation is rapidly deteriorating.
The corrupt Karzai government barely controls the capital, Kabul.
The government is desperate for a deal with the resurgent, Islamist Taliban--and showing its desperation and weakness at every turn.
Karzai and his drug-dealing cronies have taken to pleading--begging would be more accurate--for a power-sharing arrangement, even promising to protect the fugitive Taliban leader, the one-eyed monster known as Mullah Omar, against any attempts to capture or kill him.
The United States and its NATO allies may have to settle for a Taliban-controlled country that bans Al Qaeda from restoring its state-within-a-state-style terrorist training camps and operational bases.
That would be the best case scenario, analysts say. Absent a wholesale destruction of Taliban sanctuaries in Pakistan--which is hard to imagine--the Taliban will sooner or later win the war in Afghanistan. It is too late for an Iraq-style U.S. troop surge; and even in Iraq, analysts agree, a secret understanding with Iran to control Shiite militias had as much or more to do with restoring a certain measure of stability and calm than the surge itself.China Considering Seven-Fold Hike in Gold Holdings
Another sign that the ppresent downward pressure on gold--which could very well continue and further depress the price of the precious metal before it levels and again begins to climb--is temporary.
Following unusually large Saudi gold purchases, China's central bank is considering diversifying out of US dollars and into gold to spread risk in its huge foreign exchange holdings.
A seven-fold increase is possible. State media reported Wednesday that China is weighing a move to increase its gold reserves to 4,000 tonnes from the current 600 tonnes. It did not provide further details.
The People's Bank of China declined to immediately comment on the report when contacted.
China has emerged as the world's largest and fastest-growing holder of foreign exchange reserves, which totalled more than 1.9 trillion dollars at the end of September, according to the central bank.
China became the largest foreign holder of US treasury debt in September ahead of Japan, according to US Treasury Department figures released Tuesday.
Rising Demand for Gold in China
In related news, the World Gold Council said demand for gold in China rose 18 percent in the third quarter as consumers turned to the precious metal as a safe haven for their cash.
Demand rose to 109 tons in the third quarter, the majority of which is attributed to a strong rise in the Chinese mainland, the council said yesterday, citing figures complied by researchers GFMS Ltd.
Demand from the mainland rose 20 percent to 99.8 tons. In Hong Kong it increased 7 percent to 3.8 tons while demand in Taiwan shrank by 6 percent to 5.4 tons.
China's gold jewelry demand grew 9 percent to 92.5 tons in the quarter as sharply lower prices persuaded consumers to overcome their reluctance to spend in the gloomy global economic environment.
The retail investment market was particularly animated in China and demand from the segment more than doubled to 16.5 tons as gold's safe-haven status appealed to investors in a time of financial crisis.
Mixed Near-Term Outlook
Over the next quarter, the outlook for gold across China is mixed, the council said.
The arrival of the Chinese wedding season may provide some support for jewelry purchases, particularly if the gold price steadies at the lower levels seen in recent weeks. However, the global economic slowdown is also likely to restrain consumer spending on gold jewelry.
Investment demand, however, is likely to benefit from continued uncertainty.
The strong rise in demand from China, India, Middle East and Indonesia has boosted global gold demand in dollar terms to a quarterly record high. Dollar demand for gold reached an all-time quarterly high of US$32 billion in the third quarter. That was 45 percent higher than the previous record in the second quarter.Food Scandals Lead to FDA Opening China Office
The United States opened a Food and Drug Administration office in Beijing Wednesday as the first step in an FDA strategy to try to improve food and drug safety standards around the world.
The moves came one week after the U. S. placed a temporary ban on dairy products imported from China, which is still recovering from a scandal involving tainted milk.
Eventually, eight FDA staffers eventually will be based in three Chinese cities: Beijing, Shanghai and Guangzhou.
Global Strategy
FDA's China presence is the first step in a global strategy that will see FDA offices also open in India, Latin America, Europe and the Middle East in coming months.
China in recent months has been embroiled in a scandal involving milk tainted with melamine, an industrial chemical that gives the false appearance of higher protein content. The tainted milk has killed at least four babies and sickened tens of thousands of others.
Melamine was also found to be the culprit in contaminated pet food ingredients imported to the United States from China in 2007, after pet cats and dogs died.
Ban on Dairy Imports
Last week, amidst the latest scandal, the U.S. imposed a ban on imports of Chinese dairy products, unless importers could certify they are free of melamine.
Chinese Foreign Ministry spokesman Qin Gang on Tuesday said his country regrets the US decision, and called for the ban to be lifted as soon as possible.
He also told reporters China plans to send "relevant" Chinese food safety officials to the United States.
Qin gave no specifics, but said China hopes the arrangement will help the two countries strengthen communication and cooperation on food quality and safety.
The posting of FDA officials in China was based on two agreements on the safety of food, feed, drugs and medical devices US and Chinese officials signed last December.
Thursday, 20 November 2008
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