Oil has dropped below $99/ barrel in anticipation that OPEC will increase production. The Associated Press reports that the leaders of OPEC will meet Wednesday in Vienna and it is anticipated that they will officially increase production by 1.5 million barrels per day. This will be the first increase since 2007. In some ways, the announcement will be somewhat ceremonial because it is believed that Saudi Arabia has already increased production because it was not producing at its limit. It is also anticipated that the U.S. Department of Energy report on short term energy needs will be released Wednesday and will indicate that supply for energy is up while demand is down. Is this good news for gas prices?
Steve Jobs announces iCloud
The founder of Apple once again took the stage on Monday announcing iCloud, which will allow Apple users to store their content in the Apple cloud thus releasing the burden of syncing multiple systems. The Wall Street Journal reports that while the announcement did not seem as glitzy and important as the presentation of new technology devices, iCloud allows Apple to create greater ownership of and reliance by customers on its products. Greater concerns were expressed over the health of Jobs and the future of the company.
Bond manager losses released
Bill Gross, the famous manager of the PIMCO funds, apparently invested heavily in Lehman Brothers prior to its demise, as indicated by the Wall Street Journal. The Lehman bankruptcy trustee indicated that PIMCO lost $3.4 billion on Lehman debt. The company indicates that those losses have already been accounted for in their funds. Gross had gained additional fame for his alleged foresight in handling PIMCO portfolios prior to and during the economic crisis.
The Financial Times indicates that Barclays will pay $1 billion to the Lehman Brothers trustee based upon the outcome of pending litigation.
Geithner pushes for global standards
Geithner, head of the U.S. Treasury Department, pushed for global agreement on collateral or margins for derivatives in the future. According to the Financial Times, Geithner classified Britain's regulation of derivatives prior to the crisis as a "light touch" and indicated that regulation needed to be consistent globally. Fear is the risks will become concentrated in jurisdictions where financial oversight is less strict, such as Singapore or Hong Kong. The IMF has backed the UK regarding its increased capital requirements for banks, in general.
Chinese seek to buy European companies
According to the Wall Street Journal, the Chinese want to acquire European companies in order to develop "international sales networks and brand names". In 2003-2005, the Chinese spent $853 million on European acquisitions. That amount has risen to $43.9 billion in the 2008-2010 timeline, according to Dealogic, a London based consultancy. In addition to the acquisition of Volvo, the Chinese have purchased more than 100 smaller European companies. Estimates are that they wish to invest more than $1 trillion between now and 2020. It is easier for the Chinese to buy European companies than U.S. companies because the U.S. blocks many deals due to "national security" issues.
Peru mining shares fall due to election
The shares of many copper and gold mining companies fell overnight due to the election of the leftist Ollanta Hamala to the presidency of Peru. Peru is the second largest producer of copper.
Private jet business on the increase
The use of private jets for business is once again on the increase after a dramatic 35% fall during the recession. In April of 2008, private jet travel reached its peak, but fell upon the onset of the economic crisis and the perception that private jet travel was luxurious. Today, travel is 10% below the April 2008 peak, as indicated by JSSI, a company that services airplanes and as reported in USA Today. Flight time was up 11.4% in the first quarter of 2011 compared to a year earlier and up 7% just in April. Manufacturing of airplanes and parts has not yet rebounded.
State parks learn to market
According to the New York Times, state parks are facing a new challenge in learning how to market themselves as they lose funding from state governments. Many parks have increased fees and are looking for volunteers. California is closing 70 of its 278 state parks. Ohio is looking to drill for oil in some of its parks. The parks need to learn how to attract visitors and keep them coming back, just like other businesses. Maybe Yogi Bear could help out.