1. Federal Reserve Bank of Dallas President Richard Fisher's speech today offers evidence that lower commodity prices are already being passed through to consumers and/or exporters are realizing that American consumers can absorb no more price increases at this time, courtesy of Real Time Economics.
2. Bloomberg reports that the finance ministers of the European Union rejected a joint economic stimulus effort yesterday. Meanwhile, Eurointelligence reports that the European Commission yesterday forecast "zero rates of growth for Germany, France and Italy, -0.2% for Spain, and 0.1% for the euro area as a whole." The same issue of Eurointelligence reports that the Spanish government will extend two year bridging loans to try and stem foreclosures.
"The scheme will be effective for the two years, 2009 and 2010, will cover half the monthly mortgage payments up to €500 (~ $639) per month, or €12,000 (~ $15,300) for the two-year period, and will have to be repaid in the subsequent ten year period."The foreign ministers of the European Union were also meeting yesterday, in Marseilles, and Edward Cody at the Washington Post reports that they drew up a road map of policy priorities to work on with the United States following the election today.
"The list of priorities included reinforcing multinational diplomacy in the United Nations, paying more attention to the Israeli-Palestinian dispute, and improving coordination between military and reconstruction efforts in Afghanistan, according to French officials. In addition, they said, the European initiative called for intensified diplomatic contacts with Russia, now projecting a sense of renewed power and prominence on the world stage, to prevent confrontation with the United States and Europe."Dan Bilefsky at the New York Times reports that Sarkozy has dropped his plan for extending the French presidency of the EU and endorsed the incoming Czechs on Friday.
3. Robert Wielaard at the Associated Press reports that EU Energy Commissioner Andris Piebalgs will travel to Azerbaijan and Turkey Wednesday to underscore the union's support for the Nabucco pipeline--a natural gas pipeline which would be 3,300 km long ad run from the Caspian Sea through Turkey, Bulgaria, Romania and Hungary to Austria. Potential suppliers include Kazakhstan, Turkmenistan, and Iran. The EU is interested in it as a way to diversify natural gas supplies from Russia.
4. John Kingston at Platts' blog "The Barrel" has the interesting report from Russia, where the internal price for crude had dropped to $10/b prior to the recent reduction in the export tariff. Previously the tariff had been $50/b and with the market price of Urals at $60/b, many producers decided to keep the crude at home instead of pay the transport costs. Evidently, when small volumes got out of Russia, it was often because it was being purchased at a premium to Brent--a better quality crude. Kingston lays reduced production from Russia at the feet of the taxation policies of Moscow, which would controvert the Peak Oil thesis that this is a result of the natural decline of old fields. It may well be that both share responsibility. Russian manufacturing contracted again in October, as per Edward Hugh at Russian Economy Watch.
5. Edward Wong at the New York Times reports that China and Taiwan signed new accords today "expanding charter flights, maritime shipping and cooperation on food safety issues."
"The new transportation agreement raises to 108 from 36 the number of weekly round-trip charter flights, according to a summary of the agreement posted on a Web site run by the Taiwanese government. The flights are expected to run daily, with 21 cities on the mainland and eight in Taiwan receiving service.6. Leslie Moore Mira at Platts reports that ADM plans to form a JV with Brazilian sugarcane producer Grupo Cabrera. Ethanol production volume from the venture is slated to be 6 million tonnes/year (130.5 kb/d). ADM's CEO and Chair, Patricia Woertz, said that perhaps the US will drop its tariff on ethanol, but that the long term strategy is to provide ethanol wherever there might be demand, including Japan and inside Brazil itself.
The planes will also fly in a direct line between cities over a route north of Taiwan. Charter flights between China and Taiwan currently take a longer route through Hong Kong airspace because of security concerns.
China and Taiwan will add direct cargo charter flights as well, with 60 scheduled per month.
The two governments will also open direct shipping channels for passengers and cargo. China will open a total of 63 ports and Taiwan will open 11. To avoid political sensitivities, ships will not fly national flags."