World Economic News
Worldwide 'Sad September' for Auto Sales
Oct. 3 (EIRNS)The impact of the accelerating mortgage meltdowns and banking crisis in many countries on their real economies, showed clearly again in September data on auto sales, an important indicator of economic growth or its reverse.
In the United States, the biggest market for automobiles was a "Sad September," with sales down 3% from September 2006 and 12% from August. After falling by 3% from 2005 to 2006 as a whole, U.S. auto sales have fallen by at least that much from 2006 to 2007, in every month except August, in spite of sales "incentives" which now average 10-12% of the total cost of a vehicle. September sales were only about 1.25 million cars and light trucks, indicating an annual rate of less than 16 million sales. Sales were over 17 million two years agoa level below 16 million, which would take the industry back to 1995-96 levels, is considered a possible "red line" for bankruptcy of one of the "Big Three," most likely, Ford.
This pattern was found in the biggest national markets outside China. Japan's sales were down 9% from a year ago, the 19th consecutive month of decline for Japanese auto sales.
Korea's "Big Six" sold 16% fewer cars worldwide than one year earlier. Total Canadian car sales were 2.9% down from September 2006; and Germany, Europe's biggest national car market, experienced an 11% drop.
Iran Cuts Oil Deals in Dollars
Oct. 3 (EIRNS)Under increasing pressure from the United States, which is waging financial warfare against the country, Iran has decided to further reduce the share of oil transactions conducted in dollars. As reported by AFP and Iranian wires today, only 15% will be in dollars. Mohammad-Ali Khatibi, deputy head of the National Iranian Oil Company in charge of marketing, was quoted on state television saying, "Iran is selling about 85% of its oil in the non-dollar currencies. Currently, about 65% of the oil sale income is in euros and 20% in yen," Khatibi added.
Japan, which buys 20% of Iran's crude oil, recently agreed to pay in yen, he said. Khatibi also cited the United Arab Emirates dirham as one other possible currency for use in oil transactions.
Khatibi said the main reason for the move was fluctuations of the dollar on the currency markets and the depreciation of its value since 2004. It should be added that, due to U.S. pressure on foreign banks dealing with Iran, the country has had difficulties in making dollar transactions.
Lord Oxburgh of Shell Projects $150 Per Barrel Oil
Oct. 2 (EIRNS)Sir Ernest Ronald Oxburgh, former chairman of Shell Oil, a Knight of the British Empire, issued a stark warning in a Sept. 17 interview with the Independent of London, that the price of oil could hit between $100 and $150 per barrel. In this environment, he asserted, investment in prohibitively expensive alternative fuels would be appropriate.
With oil prices at those levels, Lord Oxburgh and the British Crown's Royal Dutch Shell assert, alternative fuels, such as ethanol and bio-diesel, could become profitable. "And once you see oil prices in excess of $100 or $150 a barrel," Oxburgh told the Independent, "the alternatives simply become more attractive on price ground if no others." Oxburgh, who is a fanatical supporter of global warming, heads D1 Oils, a firm that produces "bio"-diesel.
Europe Not Immune to Financial Fallout
Sept 29 (EIRNS)Europe may still hold some delusions that it is immune from the financial turmoil shaking the U.S. financial marketsthat the bailout of Northern Rock Bank in Britain was just a coincidencebut continuing shocks hitting the European economy may bring it to its senses:
* The strengthening of the euro against the dollar is "threatening to choke" economic growth, according to the Sept. 29 Financial Times. The euro hit a record of $1.42 against the dollar last week, leading to fears of inflation and loss of exports. The European Central Bank has declined to raise interest rates.
* In Germany, the retail sector is being hit by widespread pessimism among German consumers, who are not buying enough goods to prop up the flagging export markets, according to the FT.
* The credit crunch and oversupply have hit the real estate market in parts of Europe hard, especially in the price of second homes. From Spain to Estonia, to the U.K., property values are dropping, while mortgage payments for many with ARMs are due to risea timebomb for overstretched borrowers.