The Movement for the Emancipation of the Niger Delta (MEND) said its fighters struck the Shell Forcados platform in the Delta state at about 0230 GMT.

There was no immediate independent confirmation but Shell said it shut in some oil production at its western operations in the Delta while it investigated reports of attacks.

U.S. crude for August delivery rose to a high of $70.06 per barrel, up 90 cents, before slipping back slightly to $69.75 by 1230 GMT.

London Brent crude was up 60 cents at $69.52.

“The Nigerian supply disruptions brought in some buying,” said Christopher Bellew, broker at Bache Commodities in London.

On Friday, four militant Nigerian factions said they would accept in principle an amnesty offer from President Umaru Yar’Adua, raising hopes Africa’s top oil producer would halt a battle with rebels.

Pipeline bombings, attacks on oil and gas installations and kidnapping of industry workers over the past three years have prevented Nigeria from pumping much above two-thirds of its installed oil output capacity of 3 million barrels per day.

The loss of output have been a supportive factor at a time when global recession has bitten deep into oil demand.

DEMAND FORECAST CUT

The IEA, adviser to 28 industrialised countries, has cut sharply its medium-term forecast for oil demand, saying there was a chance of an extended contraction, but added the threat of a supply crunch had only receded, not gone away.

Based on a higher economic growth scenario, the IEA predicted on Monday product demand would grow by 0.6 percent, or 540,000 bpd on average, between 2008 and 2014, taking demand from 85.8 million bpd to 89 million bpd.

The IEA’s previous medium-term forecast, issued in December, had forecast growth of a million bpd a year from 2008 to 2013.

Algerian Energy and Mines Minister Chakib Khelil said on Monday oil demand was still weak due to the weakness of the U.S. and European economies and world oil stocks remained high.

Khelil said an increase in OPEC oil production was hard to envisage, despite rising crude prices.

European stock markets crept higher on Monday with financial and energy companies responding to an improving economic outlook for the euro zone.

Dealers said macro-economic data would continue to have a major impact on sentiment in the oil market.

U.S. consumer confidence data on Tuesday leads a heavy calendar of economic data this week, including China’s Purchasing Managers Index on Wednesday and a U.S. jobs report and manufacturing data on Thursday.

The U.S. data will help determine whether an oil market rally, which has lifted prices more than 50 percent this year on hopes of economic recovery, has any legs.

In the first big number for the week, industrial output from the world’

LONDON, June 29 (Reuters)

Good day… And good Monday morning to all of you. I can’t believe March is nearly over, it seems as though it just started. March will end up being a pretty good month for the currency markets, as investors exited the safety of US treasuries and started moving funds back into higher yielding assets. But the markets continue to be volatile, and news released on Friday and over the weekend has sent these investors rushing back to the safe haven of the US dollar.

The Japanese Yen and US dollar benefited after a US Government official said Friday that bankruptcy may be the best option for GM and Chrysler. The dollar continued to gain strength this morning after US Treasury Secretary Geithner warned yesterday that some financial institutions will need “large amounts” of aid. When the Treasury Secretary says large amounts, you know it is going to be billions or trillions! Geithner was making the rounds of Sunday morning talk shows to try and justify the money already spent and prepare the taxpayers for another request of funds.

Bad economic data released on Friday here in the US helped drive investors back into the US$. Consumer confidence in the US remained near a three decade low this month as the jobless rate continues to climb. The number of US states with a double digit jobless rate almost doubled in February; with Nevada, North Carolina, and Oregon joining Michigan, South Carolina, California, and Rhode Island with unemployment rates above 10%.

The Japanese yen benefited from the safe haven buying, with the yen turning in the only positive performance vs. the US$. A report in Japan which indicated a cut in inventories added to the yen’s good day. Inventories fell 4.2% last month, and companies said they would increase production in coming months, indicating the worst of the manufacturing slump may be over. But with exports falling, and retail sales tumbling, I don’t expect manufacturing to pick up anytime soon. Deflation continues to be a problem in Japan, as consumer prices remain stalled. With benchmark rates as close to zero as possible, the Bank of Japan has little ammunition left to combat the falling prices. If you still own the Japanese yen, take advantage of these small rallies to exit your position, as the yen will probably not be able to maintain this strength.

Another currency you may want to consider exiting is the Singapore dollar. According to a story I read on Bloomberg this morning, the Monetary Authority of Singapore may devalue their currency and allow it to drop 4 percent against the US dollar in the next few months. The central bank reviews the currency’s position twice a year, and some are now predicting it will shift the value of the Singapore dollar in April. Singapore’s exports continue to fall and some are blaming the strength of the Singapore dollar vs. its regional competitors. While I believe the Asian economies will lead the world out of the global recession, the Singapore dollar will likely come under some selling pressure going into April.

With a general move back toward safety, the higher yielding currencies of Australia and New Zealand suffered. The Australian dollar dropped below .68 but will still end March with over an impressive gain vs. the US$. The New Zealand dollar also gave back some of its recent gains, moving down to the .55 handle. But like the Australian dollar, the kiwi will still end march with nice gains vs. the US$, likely to be in the double digits.

Other commodity based currencies also suffered, with the US dollar moving higher vs. the Brazilian real and Canadian dollar. But many investors still feel these commodity currencies will be some of the first to recover, as countries invest stimulus money into infrastructure projects.

News from Europe fed into the dollar’s strength as a report showed industrial orders plunged 34% in January, the most on record. Another report showed France’s economy shrank by 1.1% in the fourth quarter, the steepest decline since 1974. With all of this negative data, it isn’t hard to see why European confidence fell to the lowest on record in March. An index of executive and consumer sentiment in the euro region released this morning fell to a record low. All of this negative data is boosting calls for further rate cuts by the ECB. After the 50 basis point cut at the beginning of March, most currency traders expected the ECB to pause and hold rates steady for a couple of meetings. But now the calls for further cuts are becoming louder.

The Euro had the worst day vs. the US$ in nearly three months on Friday, and is not holding just above 1.32. Some are now even suggesting the ECB follow the US and UK down the path of “quantitative easing”, buying bonds to pump more money directly into their economy. As I have written recently, this is one of the most inflationary moves a central bank can take, and would be a dramatic step by the typically hawkish ECB.

But not everyone in Europe is wanting the ECB to follow the paths of the US, UK, and Japanese central banks. Germany’s leader, Chancellor Angela Merkel warned against inflating the global economy to revive growth. Frank Trotter sent me an article from this weekend’s Financial Times in which Merkel rejected calls to spend more public money in Germany to speed the recovery. “This crisis did not come about because we issued too little money but because we created economic growth with too much money, and it was not sustainable growth,” Merkel said, according to the FT. “If we want to learn from that, the answer is not to repeat the mistakes of the past.”

Merkel’s position is in stark contrast to our own administration, who have taken a somewhat short sighted ‘grow now, worry about inflation later’ stance. In fact, the US administration is excited about how they have been able to manufacture a new ‘refinance’ boom by forcing mortgage rates back down. But the concern I share with Merkel is how will policy makers unwind all of this ‘easy money’ once the recovery begins?

Does anyone think the Fed will have the courage to end their emergency-lending programs while the unemployment rate remains near double digits? You know the administration is going to push the Fed to wait until there are clear signs the US is in recovery before moving rates back up. But any slight hesitation on the Fed’s part will probably spark inflation which could quickly grow out of control if left unchecked.

But Treasury Secretary Geithner said yesterday that the Fed’s injections of reserves into the economy are “not going to create the risk of hyperinflation in the future.” “We have a strong independent Federal Reserve with a very strong mandate from the Congress, and they will do what’s necessary to keep inflation low and stable over time,” Geithner said on ABC’s Meet the Press. At the same time, he warned policy makers shouldn’t “put the brakes on too quickly.”

I hate to disagree with the Treasury Secretary (ok, you caught me, I actually kind of like disagreeing with the Treasury Secretary) but I just don’t think they have the ability to keep inflation at bay. The Fed has injected record amounts of liquidity into the system, using some untested ‘quantitative easing’ procedures which will need to be reversed. With the Fed pledging to purchase another $1.25 trillion of mortgage debt and $300 billion of Treasuries, inflation is inevitable.

Finally, I read where Wednesday has been dubbed ‘Financial Fools Day’ in London. Protestors attracted by the G20 summit plan to target London bankers for their role in the financial meltdown. This should make things interesting on Wednesday, as protestors plant to try and block roads and prevent people from getting to work at the heart of the global currency trading.

Currencies today 3/30/2009: A$ .6808, kiwi .5625, C$ .8001, euro 1.3192, sterling 1.4183, Swiss .8706, rand 9.7274, krone 6.7765, SEK 8.2889, forint 234.97, zloty 3.595, koruna 20.89, yen 96.63, sing 1.5213, HKD 7.7502, INR 51.2825, China 6.8364, pesos 14.539, BRL 2.2911, dollar index 85.66, Oil $50.57, Silver $13.03, and Gold… 912.14

Source: Bad News for GM and Chrysler Rallies the US$

More from Bloomberg:

The dimming outlook signals consumer spending, which accounts for more than two-thirds of the economy, will deteriorate further, deepening the U.S. slump.

“The economy feels like it is contracting at a rapid pace,” Lewis Alexander, chief economist at Citigroup Global Markets Inc. in New York, said in a Bloomberg Television interview. “It’s clear that consumers have really been affected by the volatility we’ve seen in the last six weeks.”

The report underscores voter discontent with the country’s direction heading into the Nov. 4 presidential election. A majority of voters think Illinois Senator Barack Obama, the Democrat, will be better able to handle the economic turmoil than Republican rival John McCain, according to polls.

The Daily Reckoning’s Bill Bonner warned yesterday how the crisis that started on Wall Street was rapidly spreading to businesses and consumers all across America.

The next stage will come when consumers go on a rampage of thrift. Credit cards will go in the trash. Malls will be silent. Sales clerks will fall asleep on the job – and then be fired. Higher unemployment. More foreclosures. More bankruptcies.

And when Americans don’t shop, it will be products Made in China that they aren’t shopping for. That’s why the depression will be worldwide – the first ever.

“China, India, Brazil and Russia (the BRICs), the biggest emerging economies, export most of their products either to each other… or to the developed economies [mainly, the USA],” continues La Prensa.

Yes, Dear Reader… our “Crash Alert” flag is still up – even though the stock market, the housing market, the financial market, and the commodities market have already crashed. But now, there’s another flag up on our mast, a black flag. On it is a white duck laying on its back with its feet up in the air.

It is our way of warning you: “Global Depression Alert” it says at the bottom.

.

Although it is standard procedure for governments to soothe their citizenry with placebo politics in order to avoid panic and uprising, there is a line after which such a campaign is counterproductive. In fact, misleading statements about financial security are potentially dangerous to the country’s long-term economic wellbeing, and potentially toxic to investors.

Economic and financial statistics are the battleground over which the war of perception is fought. But as the saying goes: “Figures lie, and liars figure.”Politicians are masters of the selected use of statistics to lend credibility to their statements. In reality, the numbers often mask the truth.

A year ago, financial markets hovered near nominal highs, retail sales appeared to be growing and real estate prices were near historic highs. Wall Street and Washington made the most of these “over-the-top” numbers to foster a sense of economic invincibility. With the national gaze lifted towards sunny skies, few noticed the danger of the mortgage crisis, which lay below like a tiger trap.

But like watching a poorly dubbed martial arts film, the average American is beginning to notice that the dialogue does not match the on-screen action. As a result, many people are developing a deep suspicion of statistics, which over time will greatly diminish the government’s credibility. In the coming economic crisis, this loss of credibility may have severe consequences.

One vital statistic in the perception battle is gross domestic product (GDP), which is the total of all spending on goods and services within our economy, and is used as the key measure of national wealth generation and economic growth. It may be surprising to some, but GDP includes money spent on clearing up natural disasters such as hurricane relief and pollution control. How such expenditures – that really only replace what has been lost – increase national wealth, is beyond me.

Unemployment figures are another worry. Government adjustments for seasonal and population changes are acceptable. But excluding from the unemployment rolls those who are neither actively seeking jobs nor the “long-term” unemployed is not.

Perhaps, the greatest area of concern about statistical manipulation is the measurement of inflation, or Consumer Price Index (CPI). By manipulating this single statistic the government can miraculously transform rising prices into economic growth.

The Department of Labor has set so-called “core” inflation, excluding food and energy, at 2.2%. Even “headline” inflation, including food and energy, is published officially at only some 4%. The problem is that these figures bear very little relation to the reality of price increases experienced on Main Street, which some estimate to be in excess of 10%.

Statisticians assign different weights to the elements comprising the CPI that are often not reflective of the spending habits of ordinary citizens. For example, housing maintenance (including heating oil), a major expenditure, is given only a small part in the Index’s makeup. In addition, the re-pricing of items such as automobiles to allow for added “hedonistic” features such as enhanced “value for money” is wide open to varying judgments. How these statistical decisions are made is really anyone’s guess. But it is absurd to assume that the government’s overwhelming interest in reporting low inflation does not influence the final numbers.

The financial consequences for investors can be severe. For example, the Dow Jones Industrial Average Index, against which many investment returns are measured, closed at a nominal high of 14,093 on Oct. 12, 2007. The media reported it as a sign of good things to come. On May 23, 2008, the Dow closed at 12,480 – off a bit, but apparently not too bad. But if that day’s close is adjusted for the official CPI, then it’s not worth 12,480, but only 9,856 when compared with its previous market cycle high, of 11,723, in the year 2000.

Worse still, if adjusted for the more likely but still conservative inflation rate of 8%, the recent close of 12,480 becomes the equivalent of only 6,742 in the year 2000. What looks like a nominal gain of some 757 points or 6.4% is, in fact, a real loss of 4,981 points or some 42% over those eight years!

One set of statistics that is impossible to distort are currency exchange rates, which have provided a somber report card on America’s economic fortunes. Not able to manipulate these numbers, the authorities instead distort their meaning, and have attempted to convince Americans that a weak dollar is in the national interest.

Those wise enough to ignore the spin, and see the falling dollar for what it is, namely a loss of wealth, have invested in good companies listed on the stock exchanges of producer nations, such as Australia, Canada and Switzerland – all countries with appreciating currencies. Such moves have greatly enhanced wealth and protected those investors against further dollar erosion.
[Editor’s Note: John Browne is the senior market advisor for Euro Pacific Capital Inc. For a more-detailed analysis of the nation’s financial problems, and the inherent dangers that these problems pose for both the U.S. economy and for dollar-denominated investments, click here to download Euro Pacific’s new financial-research report, “The Collapsing Dollar: The Powerful Case for Investing in Foreign Securities.” The report is free of charge. Peter D. Schiff, Euro Pacific’s president and chief global strategist, is a regular contributor to Money Morning, and most recently wrote about the oil crisis and China’s growing consumer class in his most recent Money Morning column.]

Source: The Statistical Battleground

May, being a hard act to follow
God created June…

Peak this…peak that…

This just in from a Dear Reader, throwing our own words back in our face:

“‘Now, it appears that the gains from mechanization, bioengineering, chemistry and land clearing may have reached their limits. We may soon reach Peak Food’

“Now, let me ask: Has the DR morphed into a Marxist newsletter or something?”

Another reader was more flattering…

“Your writing reminds me of H.L. Mencken, after he had his stroke. But seriously, the one thing that marks human history…above all else…is the constant rise in population and the constantly improving technology to support it. I don’t see any reason why that basic theme should change. Peak Food? Don’t trouble yourself about it…”

Don’t worry about us, dear readers…we have not lost a wink of sleep to the peaks…neither Peak Oil nor Peak Food bothers us. No, it is not the peaks that disturb our sleep…it’s the valleys.

As our Dear Reader points out, we’ve faced peaks before. Many of them. Somehow we’ve made it over them – and then scooted down the other side. That’s how history works – like topography. Peaks, valleys, and broad, fertile plains. What more could you ask for?

We’ll return to the Peaks in a moment…but first let us look around…and get the lay of the land.

Oil sold off last week…and ended at $127. Gold rallied on Friday, but still ended the week considerably down.

Last week, we thought we saw an important break in the terrain. Speculators were betting that the Fed would reverse course and begin raising interest rates. This boosted the dollar, whacked gold, and sent the bond market tumbling. Lower bond prices come with higher yields; soon, the economy begins to sulk as if it had been punished.

“US mortgage rates leap ahead as investors bet on move from Fed,” is the headline in the Financial Times this morning. Thirty-year fixed-rate mortgages rose above 6% for the first time in nearly three months; jumbo mortgage money cost 7.21%. Ten-year notes, meanwhile, fell to yield more than 4%.

Ain’t markets wonderful, dear reader? All that hard work that the feds have been doing – all designed to keep rates low so that people would borrow more money; it can all be undone by a day’s trading!

“The surge in mortgage rates will make it more expensive to buy homes and less likely that existing homeowners will be able to refinance mortgages. That in turn, is likely to dampen hopes of an early recovery in the US housing market,” explained the FT .

What went wrong?

Ah…remember the “crude oil vigilantes?”

When the Fed began cutting rates last September, the price of oil shot up. High oil prices are now oozing into the entire economy…greasing up prices for everything from cucumbers to diapers. And the trends that held consumer prices down for so long are shoving them in the other direction. Labor costs were forced down, for example, as hundreds of millions of Asians entered the worldwide job market. But now those laborers are cooking with gas…and driving automobiles…and eating regular meals – competing with Americans for food and energy, and driving up prices even as the U.S. economy goes into a slump.

Here is the latest from the Associated Press :

“Indonesians are staging protests against shrinking gasoline subsidies in a nation where nearly half the population of 235 million lives on less than $2 a day. And there are now 887 million vehicles in the world, up from 553 million vehicles just 15 years ago, and on track to nearly double to a billion by 2012, according to London-based consultancy Global Insight.

“So as oil prices have soared, average U.S. [gasoline] prices have gone up 144 percent in the past five years – from $1.67 in May 2003 to $4.02 a gallon this month, according to the U.S. Energy Information Administration. Over the same period, gas prices in France went up 117 percent to $9.66 a gallon.

“Proposals by U.S. presidential candidates John McCain and Hillary Clinton to suspend federal gas taxes this summer would lower the price tag – but have little effect on the underlying oil price. French President Nicholas Sarkozy has urged the EU to cut value-added tax on fuel.

“French fishermen and farmers, who need fuel for their trawlers and tractors, say their livelihoods are threatened by soaring prices and have blocked oil terminals around France and shipping traffic on the English Channel to demand government help. Italian, Portuguese and Spanish fisherman joined them and went on strike Friday. British and Bulgarian truckers are staging fuel protests, too.

“Turkey faces similar problems – and even higher prices – $11.29 a gallon, which for a full tank in a midsize car can reach nearly $200, enough for a domestic plane ticket.”

This is just the tip of the iceberg…keep reading here .

Goldman Sachs Group Inc. (GS) already is on record for $200-a-barrel oil. As you all know, our own Keith Fitz-Gerald – Money Morning’s investment director – has projected a crude-oil price of $225 a barrel. Do I hear $250? What about $5 a gallon gasoline by July 4th?

Sometimes, these daily price gyrations take on lives of their own, but at the end of the day, the basic laws of supply and demand always work themselves out.

The upcoming week’s hectic economic calendar could go a long way to clarifying the “Are we in a recession, yet?” discussion. Crucial news from manufacturing and labor highlight the week and any renewed strength in these sectors could put an end to the “R” talk for the time being (or until next week). In fact, the National Association of Business Economic forecast 0.4% economic growth for the 2nd quarter and a much stronger 2.2% gross domestic product (GDP) pickup in the 3rd quarter as the U.S. Federal Reserve and those tax rebates begin to work their ways through the system. Suddenly, economists are projecting a rebound and cries of recession have become somewhat muted (and replaced by cries of inflation).

Market Matters

Now that Memorial day has come and gone, investors seem to be monitoring the daily energy trades even more closely than usual (if that is possible) for signs that prices have peaked and Americans will be able to afford summer travel again. Well, in the aftermath of the holiday, gas prices actually continued their trek toward that dreaded $4/gallon level and hit a new national average of $3.96 late in the week. In fact, 11 states and the District of Columbia already are reporting average prices at the pump in excess of that psychological barrier.

While crude prices fell from last week’s record highs of $135/barrel, the ongoing “supply/demand vs. speculation” debate rages on. In one corner…The Department of Energy said that exports from the top oil producers dropped by 2.5% in 2007 and are on pace for a similar showing this year. While much of the increased demand focus has been on China, oil consumption throughout the Middle East (and Saudi Arabia, in particular) has skyrocketed in recent years, thus, leaving less to export and meet the growing demand abroad.

On the flipside, conspiracy theorists cry wolf that prices have been running without any regard to true supply/demand issues. They point to escalating trades in commodity (petro) futures indexes and make Internet bubble comparisons (remember those fun days?) as explanations for the wild price swings. This week, the regulators got involved (typically a day late and a dollar short) as the Commodity Futures Trading Commission initiated a probe into potential market manipulations by energy insiders.

And suddenly those increased water cooler discussions about the dreaded “I” word are starting to move from speculation to reality. Dow Chemical announced a 20% across the board price increase to “mitigate the effects of raw material costs.” German-based DHL soon will be “outsourcing” its North American delivery biz to competitor UPS as its seeks to reduce costs. Discounter airline JetBlue will not be adding to its fleet as expected because it too suffered the ill-effects of rising fuel prices that have prompted major changes throughout its industry (can you say consolidation?). Likewise, automakers continued to struggle from consumer activity (rather inactivity) as both Ford Motor Co. (F) and General Motors announced major reductions to their respective workforces. Apparently, the “rich and famous” have been impacted far less than others as Polo Ralph Lauren and Tiffany both reported better than expected quarterly earnings. Even Dell Inc. (DELL) surprised many analysts with a solid quarter on strong sales in Asia. Turning to financials, shareholders finally approved the JP Morgan Chase & Co. (JPM) acquisition of The Bear Stearns Cos. (BSC) (like they had much of a choice), though $10 a share is a far cry from the $170 the stock traded at in early 2007.

Investors took their clues from declining crude prices this week and again looked for value in the equity markets. The major indexes traded higher (often at the expense of fixed income). In fact, the yield of the benchmark 10-year drifted back above 4.0% for the first time in about five months as talks of inflation seemed to overshadow prior recessionary fears (see below). Still investor sentiment can change on a dime these days and next week brings significant economic releases that are sure to be over-analyzed. Until then, happy motoring (at $4/gallon).

At least, since it started monitoring customer mood with its own survey four short years ago. Says their chief economist Fionnuala Earley:

“Food and fuel prices remain high and with house prices no longer rising it is unlikely that consumer confidence will pick up very quickly.”

The Daily Mail agrees under a headline “Broke Britain”. Families have less to spend as household income is eaten up by “unavoidable outgoings”. Discretionary spending – what’s left over after the “unavoidables” – is at its lowest level since 1991.

Economic forecasters Capital Economics expect food prices to continue to rise for some time yet at an annualised 6% and electricity prices will rise up to 10% in the second half. The average Council Tax bill is up 4% and the average water bill up 5.8%.
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—FLEET STREET LETTER ALERT—

3 “Gloom-Loving Stocks” for the Coming Recession

Dark clouds are gathering over the UK economy.

But for contrarian-minded investors, this spells opportunity.

The Fleet Street Letter has just been given permission to share three such money moves with you today.

You can read the full briefing here

Forecasts are not a reliable indicator of future results. Your capital is at risk when you invest in shares, never risk more than you can afford to
lose. Please seek independent financial advice if necessary. Fleet Street Publications Ltd. Customer Services: 0207 633 3600.

—————————————————————-

And then there’s the inexorable rise of the oil price. It notched up another record hitting $122 yesterday. For the car driver presently, that translates into 110p for an average litre of unleaded petrol. A level that means it has now crossed the £5/gallon threshold and filling the tank sets you back a wallet-denting £75. An average litre of diesel costs even more at 120p, or £82 a tankful.

But hey, don’t worry CPI inflation is only 2.5% when you factor in all those DVDs, flat screen TVs etc. etc. it all pans out…doesn’t it? Add in too the darkening cloud hanging over the housing market… But the frontline casualties to date look like house builders and, as we suspected, estate agents.

Estate agents are going to the wall in numbers. As we know the credit crunch begat the mortgage famine which in turn begat a recession in housing transactions. That last part is a potential stake to the heart of those whose business is to broker the deals for a fee. No deals, no fees. No fees, no business. A slump in home sales has seen 1,000 estate agents close to date and 4,000 lose their jobs.

It’s a strange situation Peter Bolton King, chief executive of the National Association of Estate Agents, tells the Mail:

‘The irony is that there is no shortage of people who want to move house, but without mortgages they just can’t do so. Estate agents are having to close because there just isn’t enough movement in the housing market.’

I know, our hearts bleed for the poor unfortunates. Given their infestation in many high streets, some trimming may be no bad thing but the death of the market helps no one in the end. In Argentina they have a saying: La plata que no se meuva, se meura. Money that doesn’t move, dies. Putting aside the phrase probably arose during their ruinous experience of hyperinflation the central thought is one of the nature of markets – a market that doesn’t move, dies. And in the case of the UK housing market presently, it’s showing a weak pulse.

(Hispanic speakers are welcome to correct my rusty linguistics!)

*** There’s still plenty of money around judging by an art market that continues to make the headlines. Monet’s ‘A Railway Bridge at Argenteuil’, “considered a prime example of high Impressionism” says the International Herald Tribune fetched a record $37m yesterday.

The previous owners paid $12.6m in 1988. A prize possession no doubt but aesthetic pleasure aside in investment terms that’s a modest return – a little over 5.5%pa. For that you can keep your Monet your editor will stick with his more humble investment trust savings scheme.

Or perhaps a permanent interest bearing share (PIBs) is worth a look these days. One of these unfashionable and little known fixed interest investments – the Britannia 5.555% – is yielding over 8% Collins Stewart advises in a note this morning. No doubt a good deal more than you’d get in even Britannia’s most generous savings account.

More adventurous investors might like to consider what is perhaps the last of the emerging markets: Africa. The pros have been turning their sights on it. The FT reports today ICAP plc, the interdealer broker, is setting up a hedge fund investing in Africa and the Middle East. The region has not escaped the attention of our own emerging markets expert Manraaj Dheensay. He’s found a great opportunity to invest in the region and interested readers should look out to hear more about it from Manraaj, coming through this Saturday.

Regards,

Rob Mackrill
The Daily Reckoning

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