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Tuesday, 2 September 2008
Corpse-selling gang held for killing 100 frail victims in Guangdong
More than 100 disabled or elderly people may have been murdered by a gang in Puning , Guangdong province, and their corpses sold for cremation to families wanting to bury their dead.
Corpse-selling gang held for killing 100 frail victims in Guangdong
Fiona Tam Sep 02, 2008
More than 100 disabled or elderly people may have been murdered by a gang in Puning , Guangdong province, and their corpses sold for cremation to families wanting to bury their dead.
Puning government and police spokesmen said yesterday wealthy people who did not want their dead relatives cremated had bought the corpses of the murder victims to replace their relatives’ bodies, which were later interred according to traditional customs.
Burial was a widespread tradition in China for several thousand years, and many Chinese believe it demonstrates a respect for the deceased that will be repaid with blessings and protection for the living.
But the mainland outlawed the tradition in the 1950s and enforced cremation to eradicate superstitions and save on farmland, a move that many critics blame for the rise in the black-market corpse trade. They also say the policy shows no respect for folk customs and values.
An officer from the Puning Public Security Bureau who declined to give his name said about seven suspects were arrested three weeks ago when police discovered the gang during a homicide investigation. A bureau spokesman said the suspects were being interrogated and the case was still under investigation.
A Hong Kong newspaper reported yesterday that nine people from Nanxi town in Puning were arrested, and that the victim toll could exceed 100.
The report said suspects would trail victims, usually mentally disabled or elderly, drag them into vehicles in remote areas and either strangle or poison them.
Corpses would be sold for 10,000 yuan (HK$11,438) each and substituted for cremation.
The report said the Jieyang funeral home confirmed it had collected many bodies from a site since identified by police as the gang’s headquarters.
Liu Hongbo , a newspaper columnist based in Wuhan , said the strict cremation system violated traditional cultural values, and encouraged corpse sellers and buyers.
“Obviously, buyers knew those bodies were people murdered by the suspects, but both parties simply treated life as a commodity to be used in their interests,” Liu said.
“Being afraid of cremation can never be a reason to murder someone ... It exposes a gruesome side of our society and deserves careful examination by authorities and the people.”
In 2004, a man from neighbouring Jiexi county in Guangdong was arrested for murdering 10 people and selling the corpses to the rich.
* Oil slumps $3 to nearly five-month low below $109
* Gustav fears ease as refinery, field damage seen limited
* ExxonMobil, Shell said to tap US emergency crude stocks (Updates prices)
By Chua Baizhen
SINGAPORE, Sept 2 (Reuters) - Oil plunged almost $3 a barrel on Tuesday to its lowest since mid-April, extending the previous day's rout on initial signs that a weakened Hurricane Gustav spared major Gulf oil facilities.
Early checks by some U.S. refiners reported no damage from Gustav, which weakened to Category 2 before roaring ashore near Port Fourchon, Louisiana, on Monday. At least two others were expected to dip into the U.S. Strategic Petroleum Reserve, helping ensure steady gasoline and diesel supplies.
U.S. crude CLc1 fell to $108.55 a barrel by 0647 GMT, extending Monday's $4 slide to stand almost $3 below trading levels late on Monday and down almost $7 from Friday's close as traders discounted Gustav, which had been called the biggest threat to the sector since 2005's devastation.
Because of the U.S. public holiday a day ago, the New York Mercantile Exchange did not issue any official settlement prices.
London Brent crude fell $1.86 or 1.7 percent to $107.55.
With Gustav now just a tropical storm as it churns further inland, energy companies were starting to assess the potential damage as they looked to restart the 1.3 million barrels per day of offshore oil production and over 2.1 million bpd of refining throughput that was shut ahead of the storm.
But some oil traders are already looking past the storm toward more bearish factors such as the rising dollar and weakening demand, hopeful that operators were better prepared than in 2005, when Katrina and Rita wrecked more than 100 offshore platforms in 2005 and shut several refineries for months.
"There is another month of peak hurricane season to go, and there will be other threats," Michael Wittner, global head of oil research at Societe Generale, said in a research note.
"However, the market reaction to Gustav has confirmed our opinion that when the disruption threats fade, the underlying factors are bearish," he said.
The Gulf is home to a quarter of U.S. oil output and more than a third of U.S. refining capacity.
SPARED?
Valero Energy Corp said an initial check of its 250,000 barrels per day (bpd) refinery at St Charles, Louisiana, refinery showed no significant structural damage from Gustav, and that the plant had electrical power.
ConocoPhillips said remote sensors showed that its Magnolia platform in the Gulf of Mexico had suffered no damage from the hurricane.
Elsewhere, area sheriff offices said no flooding had been seen at the Exxon Mobil Chalmette, Murphy Meraux and ConocoPhillips Alliance refineries south and east of New Orleans.
About a dozen oil refineries representing about 15 percent of the nation's fuel production capacity were shut and another 10 refineries cut production rates, according to company officials, trade sources and a report from the U.S. Department of Energy.
The Louisiana Offshore Oil Port, the only U.S. port capable of offloading the biggest oil tankers, also halted all operations due to high winds and waves.
Chevron Corp said production was cut at its 330,000 barrel per day (bpd) refinery in Pascagoula, Mississippi, due to the closure of the ship channel, but expected output to resume as soon as the channel opens. The channel was expected to reopen once weather from Hurricane Gustav clears.
The U.S. government has said it is ready to release crude from the nation's 700 million barrel emergency stockpile if Gustav triggers a prolonged disruption to supply.
Louisiana Governor Bobby Jindal said on Monday that Exxon Mobil Corp would ask for crude oil from the U.S. emergency supply on Tuesday and Shell Oil Co was expected to make a similar request.
Atticus Capital said to have lost $5 billion on financials
By Marietta Cauchi Sept. 1, 2008
LONDON (MarketWatch) -- New York-based hedge fund Atticus Capital has lost over $5 billion so far this year, as its funds have been hit by plummeting financial stocks, a person familiar with the situation told Dow Jones Newswires Monday.
The activist investor saw its Atticus European fund fall 32.9% in value from the start of the year to the end of August, while its Atticus Global fund was down by around 25%.
Atticus takes positions in global securities on behalf of its clients. It has been especially active in the financial sector, notably using its stake in Deutsche Boerse AG to block the acquisition of the London Stock Exchange PLC and resisting Barclays PLC's plan to buy ABN Amro Holding NV.
However, declining stock prices in the sector - the FTSE Global Financial Sector Index is down 16.5% over the last 12 months - has led to heavy falls in the value of Atticus' funds.
As a result assets under management have declined to $14 billion, down from a high of $20 billion last July. The funds have experienced only a limited number of redemptions.
Investors may lose $65 millionfrom alleged pyramid scheme
ESTHER FUNG August 29, 2008
INVESTING in oil and gas seems to be the in thing these days, but a group of South-east Asian investors risk losing about US$46 million ($65 million) after investing in scheme offered by a United States firm which is alleged to have engaged in fraud.
Over 2,000 investors from Singapore, Malaysia and Indonesia have fallen victim to this alleged US pyramid scheme, said OilPods Singapore, which claims it innocently marketed the scheme here. The bulk of the investors come from Singapore.
The investors bought working interests in oil and gas leases offered by a US company called Powder River Petroleum International and were expecting to receive high yields from its operations.
But earlier this month, an initial US official receivers’ report showed Powder River had misled OilPods and others by making monthly payments to investors using fresh funds received from new investors — not profits generated from oil and gas as expected.
OilPods, which marketed the leases in Singapore, is suing the Oklahoma firm for investments made in the last four years. The petition, lodged in the US, alleges that Powder River’s “‘programme’ ... is nothing more than an illegal pyramid scheme utterly dependent on an ever increasing number of new investors to pay existing ones,” and that “the defendants have employed schemes, artifices and practices of business which have operated as a fraud and deceit”.
OilPods told Today that it did not lodge a police report in Singapore because it had been advised by the authorities here that there were jurisdictional issues that would be better addressed is in the US.
Powder River is currently under investigation by the Oklahoma Department of Securities and the receiver’s report dated Aug 7 claimed that the firm’s chief executive Brian Fox had acted in a fraudulent manner: “During 2007, a total of US$4.4 million in interest payments were made to those investors, of which US$3.3 million came from funds received from subsequent investors, not profits generated by the company from oil and gas production.”
Such investment practices are called Ponzi schemes — a term used last year to describe the alleged operations of the controversial multi-level marketing firm Sunshine Empire here. The firm is under police investigation and is on the Monetary Authority of Singapore’s investor watchlist. Ponzi are dependent on an ever-increasing flow of new money from investors in order to keep going.
OilPods chief executive Mark Chang alleges in his firm’s petition that the Powder River made false and misleading statements about its securities in oil and gas leases since 2003, which convinced the Singapore firm to market these securities to investors here. When asked what it is doing to assure investors, OilPods said, “The investors had entered into contract with Powder River directly to purchase working interest from Powder River. OilPods is in no position to assure investors of Powder River’s obligation to (them).”
Mr Thong Chee Kun, a lawyer from Rajah and Tann not involved in the case, said, “Such cases of alleged fraud of an overseas firm (either directly or through an agent) is not unheard of, but this is one of the larger scale ones.”
Sept. 2 (Bloomberg) -- Australia's central bank cut its benchmark interest rate for the first time in seven years amid signs the nation's $1 trillion economy is slowing.
Governor Glenn Stevens and his board reduced the overnight cash rate target by a quarter point to 7 percent in Sydney today, as forecast by 22 of 23 economists surveyed by Bloomberg News.
The biggest slump in retail sales in six years, a slide in business confidence and concern about the global credit squeeze meant ``there was now scope for monetary policy to become less restrictive,'' Stevens said. A report tomorrow will show gross domestic product expanded by the least in two years in the second quarter, according to a survey of economists.
``This is a huge psychological step,'' said Hans Kunnen, head of investment market research in Sydney at Colonial First State Global Management, which holds about $128 billion of assets. ``It's taken a bit of the pressure-cooker atmosphere off the consumer and off business.''
Traders, who had been betting Stevens would cut rates again in October, pared those positions after economists said today's statement suggested the central bank won't aggressively reduce interest rates. The implied yield on the 30-day interbank futures contracts due in October rose 3 basis points to 6.84 percent.
``Stevens has stepped away from signaling outright that further rate cuts are on the way,'' said Katie Dean, a senior economist at Australia & New Zealand Banking Group Ltd. in Melbourne. ``The timing of the next cut will depend on economic reports.''
Bank Stocks
The Australian dollar, the worst performer among the 17 most-active currencies since June 30, rose immediately after today's decision to as high as 85.33 U.S. cents. It later fell to trade at 84.14 cents at 4:56 p.m. in Sydney.
Shares in Australia's four largest banks, which have fallen more than 25 percent this year, rose today on speculation lower rates will buoy lending. National Australia Bank Ltd., the No. 1 lender by assets, added 0.6 percent, Westpac Banking Corp. gained 1.5 percent, Commonwealth Bank of Australia rose 1 percent and ANZ Bank increased 1.9 percent.
All four said they will pass today's quarter-point cut to mortgage holders.
``Weighing up the available domestic and international information, the board judged that there was now scope for monetary policy to become less restrictive,'' Stevens said in a statement.
Mortgage Repayments
Policy makers will ``continue to assess prospects for demand and inflation over the period ahead, and set monetary policy as needed to bring inflation back to the 2 percent to 3 percent target over time.''
Prior to today's decision, the nation's major lenders added an average 105 basis points to mortgage rates in 2008 as the global credit squeeze drove up funding costs. The central bank raised its benchmark by a total of 50 basis points in that time.
Today's cut will reduce repayments on an average A$250,000 ($211,000) home loan by A$42 a month, according to the Real Estate Institute. A report yesterday showed households spent 39.8 percent of their incomes on mortgage payments in the June quarter, the most in the 22 years the institute has measured affordability.
The reduction is welcome and will provide ``some modest relief'' to borrowers, Prime Minister Kevin Rudd told parliament after the decision. Still, ``interest rates took a long time to rise and they will take a long time to come back down,'' he said.
`Tough Times Ahead'
``There will be more tough times ahead as we continue to experience economic turbulence abroad and high inflation and interest rates at home.''
Policy makers raised borrowing costs 12 times between May 2002 and March this year, adding 300 basis points to the benchmark rate as it fought to curb consumer prices that jumped 4.5 percent in the second quarter of this year. The bank last cut the benchmark in December 2001, when it was 4.25 percent.
Since the bank's last meeting on Aug. 5, reports have shown new home sales fell to a two-year low and lending to consumers and businesses rose at the slowest annual pace since 2002. Companies including Qantas Airways Ltd., Ford Motor Co. and Starbucks Corp. have announced job cuts.
The government will publish a report tomorrow at 11:30 a.m. in Sydney showing second-quarter gross domestic product rose 0.4 percent from the previous three months, when it expanded 0.6 percent, according to the median estimate of 23 economists surveyed by Bloomberg.
Inflation Threat
``Given the opposing forces at work, considerable uncertainty has surrounded the outlook for demand and inflation,'' Stevens said today. ``On balance, however, it is looking more likely that household demand will remain subdued and overall economic growth slow over the period ahead.''
Inflation ``is likely to decline over time, provided wages growth remains contained,'' said Stevens, who forecasts consumer-price gains will fall to below 3 percent during 2010.
Central bank policy makers ``are signaling that each coming meeting is a month-to-month proposition,'' said Stephen Walters, chief economist at JPMorgan Chase & Co. in Sydney. ``We expect another cut this year, but probably not in October. They are in no rush.''
Stevens, along with his counterparts in Europe, Asia and the U.S., faces the challenge of balancing slowing household spending, which accounts for about 60 percent of Australia's economy, with the threat that inflation will accelerate amid rising energy costs and a shortage of skilled labor.
HONG Kong cemetery officials took bribes to allow bodies buried in the overcrowded city to be dug up from temporary graves before they were fully decomposed, the city's corruption body says.
A total of 18 senior cemetery managers, tombstone contractors and funeral agents had been arrested in connection with the racket, the Independent Commission Against Corruption (ICAC) said.
"ICAC enquiries revealed that the arrested serving and former staff of Board of Management of the Chinese Permanent Cemeteries (BMCPC) had allegedly conspired together to solicit and accept monetary advantages from a number of tombstone contractors and funeral agents,'' it said.
"In return, the BMCPC staff were alleged to have allowed exhumation to continue improperly despite the fact that the human remains of the deceased were not fully decomposed.''
The case highlights the shortage of land in Hong Kong, where permanent cemetery plots are rare and costly.
Cremation is unpopular in Chinese culture, and many families choose to bury their dead in government-run cemeteries where they lease a plot for 10 years, after which the corpse is either cremated or re-buried in a smaller plot.
Cemetery supervisors are meant to bury the body for another six months if they find it has not fully decomposed.
But the ICAC investigation - codenamed "Mid-Summer Night'' --found this rule was being ignored if bribes were paid, so the sought-after plots could be cleared and re-leased.
In some cases, the supervisors were also alleged to have brought forward the date for exhumation in return for cash, the ICAC said.
The scam had been going on for up to two years with funeral agents and tombstone contractors offering substantial cash bribes, an unnamed source told the South China Morning Post newspaper. worth hundreds of dollars.
TEHRAN, Iran – Iran is considering lopping three to four zeros off its currency, a top official said Monday, in an apparent effort to fight out-of-control inflation that many critics blame on the country's hardline president.
The governor of the Central Bank of Iran, Tahmasb Mazaheri, told state-run radio that monetary experts are studying three options: Cutting three zeros off the rial, cutting four zeros, or boosting each rial's value to one-hundredth of a gram of gold, or about 2,500 rials at current rates.
"We are studying all these three options," Mazaheri said on state-run radio.
The Iranian rial is now traded at 9,600 rials to one U.S. dollar. That compares with 70 rials against the dollar in 1979, the year an Islamic revolution toppled the pro-Western Shah Mohammad Reza Pahlavi.
In June, Iran's government put the inflation rate at a whopping 26 percent. Independent economic experts say the actual inflation rate is even higher, at more than 30 percent. Prices for vegetables have tripled and housing prices have doubled since last summer.
The sharp rise in inflation has provoked fierce criticism of hardline President Mahmoud Ahmadinejad — not only from his reformist opponents, but also from senior conservatives who helped bring him to power but now accuse him of mismanaging the economy.
The currency proposals are seen as an effort by the central bank to reassert control over the country's monetary supply from Ahmadinejad and supporters. Critics blame the president for unwisely investing Iran's oil windfall and pressuring banks to lower interest rates, leading to the inflation.
But private economists say lopping zeros off the currency won't resolve the underlying economic woes, unless the government also adopts measures to boost production and move toward liberalization and a market economy.
"The solution to contain inflation is economic liberalization, absorbing foreign investment and boosting production," said economist Morteza Allahdad in Tehran.
The central bank's vice president, Hossein Ghazavi, had told several newspapers earlier this week that a special committee had already been set up to study the proposed currency reforms. In those interviews, Ghazavi acknowledged a 10,000 rial note now has the same purchasing power as 25 rials did three decades ago.
Mazaheri, the bank's governor, noted that the use of coins in Iran has become irrelevant because of the rial's low value. "If anybody wants to spend coins, he or she has to carry a kilogram of coins (to purchase food)," he said.
Mazaheri set no date for the currency reform but said the study would take at least a year before the bank could come up with a clear proposal. Any currency reform plan would need parliament's approval.
In recent weeks, Iran has issued higher-denomination notes to try to ease transactions, which can be complicated and time-consuming with smaller-denominated bills. The central bank issued 500,000 rial and one million rial notes that carry the figures 50 and 100 on their backs, prompting speculation that the rial might lose four zeros.
Both conservatives and reformists have blamed high inflation on Ahmadinejad's mismanagement of the economy.
Top conservative cleric Ali Akbar Nateq Nouri, a confidante of Iran's supreme leader, warned Saturday that Ahmadinejad's economic policies threaten to keep Iran from its goal of becoming a regional superpower by 2025.
Three years ago, Iran embarked on a 20-year plan to become a regional superpower and a leader in technological and economic know-how. In particular, the plan is focused on development in nuclear technology, science, industry and education.
The high inflation is blamed mostly on a huge increase in liquidity, caused by oil revenues' impact and Ahmadinejad's insistence on lowering bank interest rates, say independent economists. The central bank privately opposed his efforts to lower rates.
Iran earned around $80 billion from crude oil exports last year. Ahmadinejad's government converted most of that into Iranian rials and injected it into the country as loans, often to political favorites, some critics say.
Many economists had warned that such policies would lead to inflation, but they view fixes such as removing zeros as little help.
Mohammad Tabibian, an Iranian economist, said bringing discipline to monetary policies is the only true solution.
The troubled African nation of Zimbabwe drew attention to its chaotic economy this summer when it slashed 10 zeros from its currency. Private financial institutions say Zimbabwe's inflation rate was an astonishing 12.5 million percent in May and estimate it has climbed higher since.
Although Iran is less troubled, many people there, like in Zimabwe, have attempted to hedge by putting money into outside accounts in dollars or euros.
NEW YORK (MarketWatch) -- Gold futures slumped nearly $40 on Tuesday to below $800 an ounce for the first time in almost three weeks, following a broad sell-off in commodities as a weaker-than-feared Tropical Depression Gustav undermined oil prices, which fell by as much as $10 a barrel.
Gold for December delivery slumped $38, or 4.6%, to $797.20 an ounce on the Chicago Board of Trade. It fell to $795.20 an ounce earlier.
Meanwhile, the benchmark crude-oil contract tumbled as much as $10 to $105.46 a barrel, the lowest in five months.
"The massive commodities sell-off that resumed on the heels of a weakening Gustav brought values back to $800 in the case of gold, and to near $105 for black gold," wrote Jon Nadler, senior analyst at Kitco Bullion Dealers.
The Reuters/Jefferies CRB Index, a key gauge for the prices of major commodities, fell by 3.8%.
Gustav weakened to a tropical depression early Tuesday and further weakening is forecast over the next 24 hours, the National Hurricane Center said. Crude and other energy commodities moved lower.
A sharp fall in oil prices and rising worries about the economic outlook in Europe and Asia boosted the U.S. dollar. The dollar rose to its highest in almost seven months against the euro.
The dollar index, a measure of the greenback against a trade-weighted basket of currencies, was 1.2% higher at 78.208 in recent trade.
A rising dollar tends to put downward pressures to dollar-denominated commodities prices. "In the present environment, with a strong and rising U.S. dollar, and with wheat, sugar, and crude oil under pressure, gold cannot stand up on its own and be counted bullishly," wrote Dennis Gartman, author of London-based newsletter the Gartman Letter. "For the gold bulls times are hard and getting harder."
The precious metal lost $89.20 in August, the biggest monthly loss in dollar terms since at least 1984, according to FactSet.
"It will be interesting to see how long gold can remain at these depressed levels especially with physical demand so robust in India and internationally," said Mark O'Byrne, executive director at Gold and Silver Investment.
A report by the Commodity Futures Trading Commission showed that as of Aug. 5, three unidentified U.S. banks held 86,398 short positions, or bets that gold prices will fall, in the gold futures market. That's 10 times more short positions than a month earlier.
Other metals commodities also dropped. December silver lost $1.04, or 7.6%, to $12.67 an ounce, October platinum slumped $104.80, or 7%, to $1,385 an ounce, December palladium fell $17.8, or 5.8%, to $289 an ounce, and December copper dropped 16.2 cents, or 4.8%, to $3.23 a pound.
In other commodities, December corn slumped 5.1% to $5.55 a bushel, and December wheat lost 4.2% to $7.68 a bushel.
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Corpse-selling gang held for killing 100 frail victims in Guangdong
Fiona Tam
Sep 02, 2008
More than 100 disabled or elderly people may have been murdered by a gang in Puning , Guangdong province, and their corpses sold for cremation to families wanting to bury their dead.
Puning government and police spokesmen said yesterday wealthy people who did not want their dead relatives cremated had bought the corpses of the murder victims to replace their relatives’ bodies, which were later interred according to traditional customs.
Burial was a widespread tradition in China for several thousand years, and many Chinese believe it demonstrates a respect for the deceased that will be repaid with blessings and protection for the living.
But the mainland outlawed the tradition in the 1950s and enforced cremation to eradicate superstitions and save on farmland, a move that many critics blame for the rise in the black-market corpse trade. They also say the policy shows no respect for folk customs and values.
An officer from the Puning Public Security Bureau who declined to give his name said about seven suspects were arrested three weeks ago when police discovered the gang during a homicide investigation. A bureau spokesman said the suspects were being interrogated and the case was still under investigation.
A Hong Kong newspaper reported yesterday that nine people from Nanxi town in Puning were arrested, and that the victim toll could exceed 100.
The report said suspects would trail victims, usually mentally disabled or elderly, drag them into vehicles in remote areas and either strangle or poison them.
Corpses would be sold for 10,000 yuan (HK$11,438) each and substituted for cremation.
The report said the Jieyang funeral home confirmed it had collected many bodies from a site since identified by police as the gang’s headquarters.
Liu Hongbo , a newspaper columnist based in Wuhan , said the strict cremation system violated traditional cultural values, and encouraged corpse sellers and buyers.
“Obviously, buyers knew those bodies were people murdered by the suspects, but both parties simply treated life as a commodity to be used in their interests,” Liu said.
“Being afraid of cremation can never be a reason to murder someone ... It exposes a gruesome side of our society and deserves careful examination by authorities and the people.”
In 2004, a man from neighbouring Jiexi county in Guangdong was arrested for murdering 10 people and selling the corpses to the rich.
Oil tumbles below $109 as Gustav concerns recede
* Oil slumps $3 to nearly five-month low below $109
* Gustav fears ease as refinery, field damage seen limited
* ExxonMobil, Shell said to tap US emergency crude stocks (Updates prices)
By Chua Baizhen
SINGAPORE, Sept 2 (Reuters) - Oil plunged almost $3 a barrel on Tuesday to its lowest since mid-April, extending the previous day's rout on initial signs that a weakened Hurricane Gustav spared major Gulf oil facilities.
Early checks by some U.S. refiners reported no damage from Gustav, which weakened to Category 2 before roaring ashore near Port Fourchon, Louisiana, on Monday. At least two others were expected to dip into the U.S. Strategic Petroleum Reserve, helping ensure steady gasoline and diesel supplies.
U.S. crude CLc1 fell to $108.55 a barrel by 0647 GMT, extending Monday's $4 slide to stand almost $3 below trading levels late on Monday and down almost $7 from Friday's close as traders discounted Gustav, which had been called the biggest threat to the sector since 2005's devastation.
Because of the U.S. public holiday a day ago, the New York Mercantile Exchange did not issue any official settlement prices.
London Brent crude fell $1.86 or 1.7 percent to $107.55.
With Gustav now just a tropical storm as it churns further inland, energy companies were starting to assess the potential damage as they looked to restart the 1.3 million barrels per day of offshore oil production and over 2.1 million bpd of refining throughput that was shut ahead of the storm.
But some oil traders are already looking past the storm toward more bearish factors such as the rising dollar and weakening demand, hopeful that operators were better prepared than in 2005, when Katrina and Rita wrecked more than 100 offshore platforms in 2005 and shut several refineries for months.
"There is another month of peak hurricane season to go, and there will be other threats," Michael Wittner, global head of oil research at Societe Generale, said in a research note.
"However, the market reaction to Gustav has confirmed our opinion that when the disruption threats fade, the underlying factors are bearish," he said.
The Gulf is home to a quarter of U.S. oil output and more than a third of U.S. refining capacity.
SPARED?
Valero Energy Corp said an initial check of its 250,000 barrels per day (bpd) refinery at St Charles, Louisiana, refinery showed no significant structural damage from Gustav, and that the plant had electrical power.
ConocoPhillips said remote sensors showed that its Magnolia platform in the Gulf of Mexico had suffered no damage from the hurricane.
Elsewhere, area sheriff offices said no flooding had been seen at the Exxon Mobil Chalmette, Murphy Meraux and ConocoPhillips Alliance refineries south and east of New Orleans.
About a dozen oil refineries representing about 15 percent of the nation's fuel production capacity were shut and another 10 refineries cut production rates, according to company officials, trade sources and a report from the U.S. Department of Energy.
The Louisiana Offshore Oil Port, the only U.S. port capable of offloading the biggest oil tankers, also halted all operations due to high winds and waves.
Chevron Corp said production was cut at its 330,000 barrel per day (bpd) refinery in Pascagoula, Mississippi, due to the closure of the ship channel, but expected output to resume as soon as the channel opens. The channel was expected to reopen once weather from Hurricane Gustav clears.
The U.S. government has said it is ready to release crude from the nation's 700 million barrel emergency stockpile if Gustav triggers a prolonged disruption to supply.
Louisiana Governor Bobby Jindal said on Monday that Exxon Mobil Corp would ask for crude oil from the U.S. emergency supply on Tuesday and Shell Oil Co was expected to make a similar request.
Atticus Capital said to have lost $5 billion on financials
By Marietta Cauchi
Sept. 1, 2008
LONDON (MarketWatch) -- New York-based hedge fund Atticus Capital has lost over $5 billion so far this year, as its funds have been hit by plummeting financial stocks, a person familiar with the situation told Dow Jones Newswires Monday.
The activist investor saw its Atticus European fund fall 32.9% in value from the start of the year to the end of August, while its Atticus Global fund was down by around 25%.
Atticus takes positions in global securities on behalf of its clients. It has been especially active in the financial sector, notably using its stake in Deutsche Boerse AG to block the acquisition of the London Stock Exchange PLC and resisting Barclays PLC's plan to buy ABN Amro Holding NV.
However, declining stock prices in the sector - the FTSE Global Financial Sector Index is down 16.5% over the last 12 months - has led to heavy falls in the value of Atticus' funds.
As a result assets under management have declined to $14 billion, down from a high of $20 billion last July. The funds have experienced only a limited number of redemptions.
It is an oil nightmare
Investors may lose $65 millionfrom alleged pyramid scheme
ESTHER FUNG
August 29, 2008
INVESTING in oil and gas seems to be the in thing these days, but a group of South-east Asian investors risk losing about US$46 million ($65 million) after investing in scheme offered by a United States firm which is alleged to have engaged in fraud.
Over 2,000 investors from Singapore, Malaysia and Indonesia have fallen victim to this alleged US pyramid scheme, said OilPods Singapore, which claims it innocently marketed the scheme here. The bulk of the investors come from Singapore.
The investors bought working interests in oil and gas leases offered by a US company called Powder River Petroleum International and were expecting to receive high yields from its operations.
But earlier this month, an initial US official receivers’ report showed Powder River had misled OilPods and others by making monthly payments to investors using fresh funds received from new investors — not profits generated from oil and gas as expected.
OilPods, which marketed the leases in Singapore, is suing the Oklahoma firm for investments made in the last four years. The petition, lodged in the US, alleges that Powder River’s “‘programme’ ... is nothing more than an illegal pyramid scheme utterly dependent on an ever increasing number of new investors to pay existing ones,” and that “the defendants have employed schemes, artifices and practices of business which have operated as a fraud and deceit”.
OilPods told Today that it did not lodge a police report in Singapore because it had been advised by the authorities here that there were jurisdictional issues that would be better addressed is in the US.
Powder River is currently under investigation by the Oklahoma Department of Securities and the receiver’s report dated Aug 7 claimed that the firm’s chief executive Brian Fox had acted in a fraudulent manner: “During 2007, a total of US$4.4 million in interest payments were made to those investors, of which US$3.3 million came from funds received from subsequent investors, not profits generated by the company from oil and gas production.”
Such investment practices are called Ponzi schemes — a term used last year to describe the alleged operations of the controversial multi-level marketing firm Sunshine Empire here. The firm is under police investigation and is on the Monetary Authority of Singapore’s investor watchlist. Ponzi are dependent on an ever-increasing flow of new money from investors in order to keep going.
OilPods chief executive Mark Chang alleges in his firm’s petition that the Powder River made false and misleading statements about its securities in oil and gas leases since 2003, which convinced the Singapore firm to market these securities to investors here. When asked what it is doing to assure investors, OilPods said, “The investors had entered into contract with Powder River directly to purchase working interest from Powder River. OilPods is in no position to assure investors of Powder River’s obligation to (them).”
Mr Thong Chee Kun, a lawyer from Rajah and Tann not involved in the case, said, “Such cases of alleged fraud of an overseas firm (either directly or through an agent) is not unheard of, but this is one of the larger scale ones.”
Australia Cuts Key Rate for First Time Since 2001
By Jacob Greber
Sept. 2 (Bloomberg) -- Australia's central bank cut its benchmark interest rate for the first time in seven years amid signs the nation's $1 trillion economy is slowing.
Governor Glenn Stevens and his board reduced the overnight cash rate target by a quarter point to 7 percent in Sydney today, as forecast by 22 of 23 economists surveyed by Bloomberg News.
The biggest slump in retail sales in six years, a slide in business confidence and concern about the global credit squeeze meant ``there was now scope for monetary policy to become less restrictive,'' Stevens said. A report tomorrow will show gross domestic product expanded by the least in two years in the second quarter, according to a survey of economists.
``This is a huge psychological step,'' said Hans Kunnen, head of investment market research in Sydney at Colonial First State Global Management, which holds about $128 billion of assets. ``It's taken a bit of the pressure-cooker atmosphere off the consumer and off business.''
Traders, who had been betting Stevens would cut rates again in October, pared those positions after economists said today's statement suggested the central bank won't aggressively reduce interest rates. The implied yield on the 30-day interbank futures contracts due in October rose 3 basis points to 6.84 percent.
``Stevens has stepped away from signaling outright that further rate cuts are on the way,'' said Katie Dean, a senior economist at Australia & New Zealand Banking Group Ltd. in Melbourne. ``The timing of the next cut will depend on economic reports.''
Bank Stocks
The Australian dollar, the worst performer among the 17 most-active currencies since June 30, rose immediately after today's decision to as high as 85.33 U.S. cents. It later fell to trade at 84.14 cents at 4:56 p.m. in Sydney.
Shares in Australia's four largest banks, which have fallen more than 25 percent this year, rose today on speculation lower rates will buoy lending. National Australia Bank Ltd., the No. 1 lender by assets, added 0.6 percent, Westpac Banking Corp. gained 1.5 percent, Commonwealth Bank of Australia rose 1 percent and ANZ Bank increased 1.9 percent.
All four said they will pass today's quarter-point cut to mortgage holders.
``Weighing up the available domestic and international information, the board judged that there was now scope for monetary policy to become less restrictive,'' Stevens said in a statement.
Mortgage Repayments
Policy makers will ``continue to assess prospects for demand and inflation over the period ahead, and set monetary policy as needed to bring inflation back to the 2 percent to 3 percent target over time.''
Prior to today's decision, the nation's major lenders added an average 105 basis points to mortgage rates in 2008 as the global credit squeeze drove up funding costs. The central bank raised its benchmark by a total of 50 basis points in that time.
Today's cut will reduce repayments on an average A$250,000 ($211,000) home loan by A$42 a month, according to the Real Estate Institute. A report yesterday showed households spent 39.8 percent of their incomes on mortgage payments in the June quarter, the most in the 22 years the institute has measured affordability.
The reduction is welcome and will provide ``some modest relief'' to borrowers, Prime Minister Kevin Rudd told parliament after the decision. Still, ``interest rates took a long time to rise and they will take a long time to come back down,'' he said.
`Tough Times Ahead'
``There will be more tough times ahead as we continue to experience economic turbulence abroad and high inflation and interest rates at home.''
Policy makers raised borrowing costs 12 times between May 2002 and March this year, adding 300 basis points to the benchmark rate as it fought to curb consumer prices that jumped 4.5 percent in the second quarter of this year. The bank last cut the benchmark in December 2001, when it was 4.25 percent.
Since the bank's last meeting on Aug. 5, reports have shown new home sales fell to a two-year low and lending to consumers and businesses rose at the slowest annual pace since 2002. Companies including Qantas Airways Ltd., Ford Motor Co. and Starbucks Corp. have announced job cuts.
The government will publish a report tomorrow at 11:30 a.m. in Sydney showing second-quarter gross domestic product rose 0.4 percent from the previous three months, when it expanded 0.6 percent, according to the median estimate of 23 economists surveyed by Bloomberg.
Inflation Threat
``Given the opposing forces at work, considerable uncertainty has surrounded the outlook for demand and inflation,'' Stevens said today. ``On balance, however, it is looking more likely that household demand will remain subdued and overall economic growth slow over the period ahead.''
Inflation ``is likely to decline over time, provided wages growth remains contained,'' said Stevens, who forecasts consumer-price gains will fall to below 3 percent during 2010.
Central bank policy makers ``are signaling that each coming meeting is a month-to-month proposition,'' said Stephen Walters, chief economist at JPMorgan Chase & Co. in Sydney. ``We expect another cut this year, but probably not in October. They are in no rush.''
Stevens, along with his counterparts in Europe, Asia and the U.S., faces the challenge of balancing slowing household spending, which accounts for about 60 percent of Australia's economy, with the threat that inflation will accelerate amid rising energy costs and a shortage of skilled labor.
Bodies dug up for cash in scam
Agence France-Presse
September 02, 2008
HONG Kong cemetery officials took bribes to allow bodies buried in the overcrowded city to be dug up from temporary graves before they were fully decomposed, the city's corruption body says.
A total of 18 senior cemetery managers, tombstone contractors and funeral agents had been arrested in connection with the racket, the Independent Commission Against Corruption (ICAC) said.
"ICAC enquiries revealed that the arrested serving and former staff of Board of Management of the Chinese Permanent Cemeteries (BMCPC) had allegedly conspired together to solicit and accept monetary advantages from a number of tombstone contractors and funeral agents,'' it said.
"In return, the BMCPC staff were alleged to have allowed exhumation to continue improperly despite the fact that the human remains of the deceased were not fully decomposed.''
The case highlights the shortage of land in Hong Kong, where permanent cemetery plots are rare and costly.
Cremation is unpopular in Chinese culture, and many families choose to bury their dead in government-run cemeteries where they lease a plot for 10 years, after which the corpse is either cremated or re-buried in a smaller plot.
Cemetery supervisors are meant to bury the body for another six months if they find it has not fully decomposed.
But the ICAC investigation - codenamed "Mid-Summer Night'' --found this rule was being ignored if bribes were paid, so the sought-after plots could be cleared and re-leased.
In some cases, the supervisors were also alleged to have brought forward the date for exhumation in return for cash, the ICAC said.
The scam had been going on for up to two years with funeral agents and tombstone contractors offering substantial cash bribes, an unnamed source told the South China Morning Post newspaper. worth hundreds of dollars.
Iran considers lopping zeros off currency
By ALI AKBAR DAREINI
Sep 1, 2008
TEHRAN, Iran – Iran is considering lopping three to four zeros off its currency, a top official said Monday, in an apparent effort to fight out-of-control inflation that many critics blame on the country's hardline president.
The governor of the Central Bank of Iran, Tahmasb Mazaheri, told state-run radio that monetary experts are studying three options: Cutting three zeros off the rial, cutting four zeros, or boosting each rial's value to one-hundredth of a gram of gold, or about 2,500 rials at current rates.
"We are studying all these three options," Mazaheri said on state-run radio.
The Iranian rial is now traded at 9,600 rials to one U.S. dollar. That compares with 70 rials against the dollar in 1979, the year an Islamic revolution toppled the pro-Western Shah Mohammad Reza Pahlavi.
In June, Iran's government put the inflation rate at a whopping 26 percent. Independent economic experts say the actual inflation rate is even higher, at more than 30 percent. Prices for vegetables have tripled and housing prices have doubled since last summer.
The sharp rise in inflation has provoked fierce criticism of hardline President Mahmoud Ahmadinejad — not only from his reformist opponents, but also from senior conservatives who helped bring him to power but now accuse him of mismanaging the economy.
The currency proposals are seen as an effort by the central bank to reassert control over the country's monetary supply from Ahmadinejad and supporters. Critics blame the president for unwisely investing Iran's oil windfall and pressuring banks to lower interest rates, leading to the inflation.
But private economists say lopping zeros off the currency won't resolve the underlying economic woes, unless the government also adopts measures to boost production and move toward liberalization and a market economy.
"The solution to contain inflation is economic liberalization, absorbing foreign investment and boosting production," said economist Morteza Allahdad in Tehran.
The central bank's vice president, Hossein Ghazavi, had told several newspapers earlier this week that a special committee had already been set up to study the proposed currency reforms. In those interviews, Ghazavi acknowledged a 10,000 rial note now has the same purchasing power as 25 rials did three decades ago.
Mazaheri, the bank's governor, noted that the use of coins in Iran has become irrelevant because of the rial's low value. "If anybody wants to spend coins, he or she has to carry a kilogram of coins (to purchase food)," he said.
Mazaheri set no date for the currency reform but said the study would take at least a year before the bank could come up with a clear proposal. Any currency reform plan would need parliament's approval.
In recent weeks, Iran has issued higher-denomination notes to try to ease transactions, which can be complicated and time-consuming with smaller-denominated bills. The central bank issued 500,000 rial and one million rial notes that carry the figures 50 and 100 on their backs, prompting speculation that the rial might lose four zeros.
Both conservatives and reformists have blamed high inflation on Ahmadinejad's mismanagement of the economy.
Top conservative cleric Ali Akbar Nateq Nouri, a confidante of Iran's supreme leader, warned Saturday that Ahmadinejad's economic policies threaten to keep Iran from its goal of becoming a regional superpower by 2025.
Three years ago, Iran embarked on a 20-year plan to become a regional superpower and a leader in technological and economic know-how. In particular, the plan is focused on development in nuclear technology, science, industry and education.
The high inflation is blamed mostly on a huge increase in liquidity, caused by oil revenues' impact and Ahmadinejad's insistence on lowering bank interest rates, say independent economists. The central bank privately opposed his efforts to lower rates.
Iran earned around $80 billion from crude oil exports last year. Ahmadinejad's government converted most of that into Iranian rials and injected it into the country as loans, often to political favorites, some critics say.
Many economists had warned that such policies would lead to inflation, but they view fixes such as removing zeros as little help.
Mohammad Tabibian, an Iranian economist, said bringing discipline to monetary policies is the only true solution.
The troubled African nation of Zimbabwe drew attention to its chaotic economy this summer when it slashed 10 zeros from its currency. Private financial institutions say Zimbabwe's inflation rate was an astonishing 12.5 million percent in May and estimate it has climbed higher since.
Although Iran is less troubled, many people there, like in Zimabwe, have attempted to hedge by putting money into outside accounts in dollars or euros.
Gold tumbles nearly $40 in commodities sell-off
By Moming Zhou
Sept. 2, 2008
NEW YORK (MarketWatch) -- Gold futures slumped nearly $40 on Tuesday to below $800 an ounce for the first time in almost three weeks, following a broad sell-off in commodities as a weaker-than-feared Tropical Depression Gustav undermined oil prices, which fell by as much as $10 a barrel.
Gold for December delivery slumped $38, or 4.6%, to $797.20 an ounce on the Chicago Board of Trade. It fell to $795.20 an ounce earlier.
Meanwhile, the benchmark crude-oil contract tumbled as much as $10 to $105.46 a barrel, the lowest in five months.
"The massive commodities sell-off that resumed on the heels of a weakening Gustav brought values back to $800 in the case of gold, and to near $105 for black gold," wrote Jon Nadler, senior analyst at Kitco Bullion Dealers.
The Reuters/Jefferies CRB Index, a key gauge for the prices of major commodities, fell by 3.8%.
Gustav weakened to a tropical depression early Tuesday and further weakening is forecast over the next 24 hours, the National Hurricane Center said. Crude and other energy commodities moved lower.
A sharp fall in oil prices and rising worries about the economic outlook in Europe and Asia boosted the U.S. dollar. The dollar rose to its highest in almost seven months against the euro.
The dollar index, a measure of the greenback against a trade-weighted basket of currencies, was 1.2% higher at 78.208 in recent trade.
A rising dollar tends to put downward pressures to dollar-denominated commodities prices.
"In the present environment, with a strong and rising U.S. dollar, and with wheat, sugar, and crude oil under pressure, gold cannot stand up on its own and be counted bullishly," wrote Dennis Gartman, author of London-based newsletter the Gartman Letter. "For the gold bulls times are hard and getting harder."
The precious metal lost $89.20 in August, the biggest monthly loss in dollar terms since at least 1984, according to FactSet.
"It will be interesting to see how long gold can remain at these depressed levels especially with physical demand so robust in India and internationally," said Mark O'Byrne, executive director at Gold and Silver Investment.
A report by the Commodity Futures Trading Commission showed that as of Aug. 5, three unidentified U.S. banks held 86,398 short positions, or bets that gold prices will fall, in the gold futures market. That's 10 times more short positions than a month earlier.
Other metals commodities also dropped. December silver lost $1.04, or 7.6%, to $12.67 an ounce, October platinum slumped $104.80, or 7%, to $1,385 an ounce, December palladium fell $17.8, or 5.8%, to $289 an ounce, and December copper dropped 16.2 cents, or 4.8%, to $3.23 a pound.
In other commodities, December corn slumped 5.1% to $5.55 a bushel, and December wheat lost 4.2% to $7.68 a bushel.
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