25 June 2012, the small island country of Cyrus has asked the European Union (EU) for a bailout. It’s the fifth country to do so, after Greece, Ireland, Spain and Portugal.
The economy of Cyprus is directly tied to Greece, and the economic disaster there has dragged down banks in Cyprus.
Fitch just downgraded the Cyprus’s sovereign credit (bonds) grade by one notch to a junk status of BB+. Standard & Poor’s and Moody’s also rank Cyprus at junk level.
22 June 2012, Japan’s Mitsubishi Corporation has just renewed its yearly orders of Iranian oil. The decision comes after the United States exempted Japan from the oil sanctions, and the Japanese government agreed to provide shipping insurance for tankers carrying Iranian oil.
It was also revealed that while Japan’s Showa Shell Sekiyu, and JX Nippon Oil & Energy, had officially cut back on oil purchases in past months, Mitsubishi was actually picking up those companies’ barrels of oil under the Mitsubishi banner. So a slight of hand on the part of the Japanese before they got the exemption!
On 21 June 2012, it was revealed by Customs data that China has actually increased the amount of oil it gets from Iran.
China added 133,902 barrels per day to its crude shipments from Iran in May, a 34.5% increase. A Reuters report said China was trying to offset the cuts they made earlier in the year.
21 June 2012, Japan’s Nissan Motor is cutting production in Japan.
Starting next month Nissan will end production of four models of cars in Japan. It amounts to 15% of Nissan’s Japanese production.
The move comes after Nissan reported a profit of $4.29 billion USD for the Japanese year ending in March. Company officials say the production cut is meant to offset surging production costs, and declining car sales in Japan.
The rising value of the yen is also making it more difficult to sell cars made in Japan to other countries.
Nissan officials say they will try to keep workers employed by assigning new jobs to them.
“For the time being we will be able to continue smoothly transporting Iranian oil to Japan. I would like to thank the government and all parties concerned for their efforts.”-Yasushi Kimura, Petroleum Association of Japan
21 June 2012, Yasushi Kimura, president of the Petroleum Association of Japan, basically said the U.S. and European oil sanctions against Iran are impotent!
Kimura based his conclusion on the fact that there is plenty of oil supply, and that because of the continued downward spiral of the international economy global demand for oil will drop.
The fact that the United States exempted several countries from their oil sanctions, including Japan, also proves that the U.S. sanctions against Iran are nothing but hot air!
So what were U.S. & European leaders trying to accomplish with their impotent oil sanctions against Iran?
20 June 2012, the Upper House of the Japanese Diet passed a tough new anti-downloading law. If your caught ‘illegally’ downloading music or movies you could pay a $25,000 USD fine and/or spend two years in prison!
The law was pushed by the corporate music and movie industry. The Recording Industry Association of Japan is blaming their economic downturn on downloaders! I don’t think so! The new draconian anti-downloading law goes into effect in October 2012.
20 June 2012, China claims to provide 90% of rare earth minerals to the global high tech industries. Now they’re holding back.
Rare earths are necessary for the high tech gadgets we have. U.S. and European officials criticized China saying their mining cut backs will cause prices to skyrocket.
China claims they’re cutting back because the mining operations are causing environmental damage. But could it be retaliation for the Obama administration recently imposing ridiculously high tariffs on Chinese solar power products?
By the way, the tariffs quite possibly were the final nails in the coffin for Hoku Materials in Pocatello, Idaho, which could have provided hundreds of good paying jobs! Thank you Mr. President!
On 1 July 2012, the European Union’s sanctions against Iran kick in. This includes European shipping insurers (who dominate the market) ending insurance on ships carrying Iranian oil.
20 June 2012, the Japanese Diet has passed a law that allows the government to cover Japanese tanker ships transporting oil from Iran.
The law was unanimously passed by the Upper house, and will provide up to $7.6 billion USD in coverage. Many Japanese insurance companies expressed concern for providing enough insurance due to the warmongering by the U.S. and EU against Iran.
The government insurance policy goes into effect several days before the EU sanctions on 1 July.
About a week ago the Japanese federal government forced the re-start of the Ohi nuclear power plant. Prime Minister Noda gave the order, saying “…Japanese society can not survive!” without it.
Now, 20 June 2012, the operators of the Ohi disaster reactors, Kansai Electric Power Company (KEPCo) revealed a potentially major problem with Reactor 3, and they didn’t discover it until an alarm sounded when they tried to re-start it!
Reactor 3 has lost cooling water, and KEPCo officials don’t know why. Just like TEPCo officials at Fukushima Daiichi, they believe the water got out through leaks but so far they can’t find any!
The alarm sounded when the water dropped by 5 centimeters (almost 2 inches). Doesn’t sound like much but realize the cooling tanks are huge and it could amount to tons of water lost!
People living near the nuclear plant (in their wisdom the Japanese officials allowed nuclear plants to be built near homes, and vice verse) are outraged because they were not told about the problem until 13 hours later. They were already angry because most of them opposed the re-start.
KEPCo said it did not warn the residents because there is no law in Japan requiring them to do so, in regards to the amount of water lost.
Ohi’s Reactor 4 is also scheduled for re-start. The reactors at Ohi were supplied by the U.S. company Westinghouse.
“Cosmetics were very expensive back then, and a single product could cost the equivalent of a month’s salary for many office ladies.”-Chen Linlin, L’Oréal China
Linlin is talking about the not so good economic decade of the 1930s, but it looks like history is repeating for people (in North America and Europe) who just have to have makeup.
Back on 4 July 2011, I posted how Estee Lauder Group was the first cosmetic company to jack up their prices, and that it would be a trend for the whole industry.
Recently a Forbes article showed that Estee Lauder and L’Oréal are making bank in the Chinese market. China’s internet cosmetics market is now nine times bigger than that of the United States, a 200% increase since 2006!
Last year cosmetics makers claimed that labor costs, and the costs of resources were the reasons for price increases. Now, with China draining the supply of cosmetics, demand will ensure that prices will continue to go up.
Don’t blame China only, blame South America! According to a NASDAQ report, the biggest market place for Avon (AVP) products is not the home base of the United States, but South America!
But, the NASDAQ report inadvertently reveals a couple of hidden reasons for the increase in your makeup prices: “AVP has turned its toehold in Latin America into a $1 billion-a-quarter business by spending a fortune on marketing and retailer incentives — if not the outright ‘bribes’ it is accused of distributing in Asia.”
However, when it comes to cosmetics that’re supposed to stop aging, it’s vain women in the United States that still take first place when it comes to anti-aging skin care products.
According to the research company, Mintel, the anti-aging skin care market in the U.S. leads the world with $2.3 billion USD in 2011 sales!
But it doesn’t stop with makeup. One of my daughters told me that the shampoo she uses is now $2.00 USD more than it was a couple of years ago.
According to reports, the booming economy in India is creating a huge demand for personal care products that most rural people in India didn’t have access to: “In the past we used to use sticks or cow dung ash to clean our teeth. But now, just like urban people, we use a toothbrush and toothpaste. We use shampoo and expensive oils and creams. We have everything in our village that people have in towns and cities.”-Arun Mondal, a rural villager
In Canada the demand for body soap that does not contain harsh fragrances, therefore more environmentally friendly, has a Canadian soap manufacture scrambling and expanding into the retail market.
Paul Gillepsie, owner of Island Essentials wholesale, has so much business that he’s opened a retail store in Victoria, and will expand into Alberta. In 2004 his soap products were carried in 150 Canadian stores, now they’re sold in more than 250 stores.
But can we blame rising prices on rising demand in countries like Canada, China, India, and the countries of South America, and our own United States?
According to the U.S. Bureau of Labor Statistics, the cost to U.S. consumers of personal care products has been skyrocketing ever since the 1960s! In the 1960s, the Consumer Price Index (CPI) for personal care products was just under 40. Now, in 2012, it’s at 161 and climbing.
However, looking at the Producer Price Index (PPI), aka U.S. wholesale prices, shows that costs of intermediate goods (which are necessary for production of finished goods) have gone down from January 2011 to January 2012!
Intermediate goods were at 6.2% in January 2011, and were at 4.2% by January 2012, a 2% drop. The cost of finished goods were at 3.6% in January 2011, but 12 months later were at 4.1% in January 2012, a half percent increase.
What’s important in the January to January comparison is what happened in the middle of 2011. The costs of intermediate goods pegged at 11.5% in July 2011! For finished goods the costs hit 7.1% twice, once in May and once in July 2011.
The spikes in intermediate and finished goods mirrors the cost of raw materials (aka crude materials). Overall, raw materials began January 2011 at 10.9%, and ended the year down more than 6%, at 4.5% in January 2012. Again, the real killer was the spike in costs in the middle of 2011, topping out at 26.1% in June!
We in the United States are still paying for those spikes in the production costs of making the personal care products we can’t be without (cow dung for toothpaste anyone?). However, the overriding decider of retail costs is still demand for such products, which seems to increase year after year, exponentially.
“Over 80% of shootings occur outdoors and in public places.”-Roseanna Ander, University of Chicago Crime Lab
18 June 2012, according to data from the U.S. Department of Defense (DoD), and Federal Bureau of Investigation (FBI), more people have been killed in just one U.S. city, than all of the U.S. personnel killed in Afghanistan since the U.S. invasion in 2001!
The DoD claims just over 2,000 personnel have been killed in Afghanistan between the invasion in 2001 to just last week (iCasualties.org says 2012 have been killed). The FBI says more than 5,000 people have been killed in the U.S. city of Chicago, during the same time!
On 15 June 2012, Chicago Sun-Times reported that from the beginning of 2012 at least 228 people were killed, and the murder rate jumped 35% since last year!
According to iCasualties.org, U.S. personnel deaths in Afghanistan, since the beginning of 2012, is at 203 (and some of these deaths are not combat related). So U.S. troops are slightly safer in Afghanistan than in Chicago!
Why the seeming civil war in Chicago? Blame the economy: “Not surprisingly, they’re in poorer neighborhoods…”-Roseanna Ander, University of Chicago Crime Lab
According to Chicago Sun-Times the city “…administration has cut anti-violence programs targeting some of Chicago’s poorer neighborhoods by $9 million.”
President Obama, and his family attended a wedding in Chicago on 16 June 2012. They needed an escort of as many as 200 Chicago cops! If that’s not a sign of a war zone then what is?
And by the way, Chicago city officials were told that the federal government is not paying for the extra police security! Like I said, blame the economy!
And what about incompetent city officials? Chicago cops are understaffed, yet city officials would rather pay overtime for cops working on their days off, than hire more cops. That doesn’t make economic sense, unless they’re trying to avoid paying out benefits for those new cops. Even then, in the long run it’ll cost the city more, because the civil war will only escalate.