Dire predictions tend to grab the attention – especially when an international celebrity lends a voice.
A report released in Britain this week with the unpromising title — the UK’s Industry Taskforce on Peak Oil & Energy Security – might have found only a specialised readership, but for the inclusion of Richard Branson’s Virgin Group in the six-member task force.
(The others were Arup, Foster & Partners, Scottish and Southern Energy, Solarcentury and Stagecoach Group.)
As it was the warning that oil shortages, insecurity of supply and price volatility will destabilise economic, political and social activity within five years was splashed across the press.
Advocates of the peak oil supply theory have long argued world oil supply is nearing a peak from which it will decline, leading to skyrocketing prices. Some of them have reckoned the peak could be as early as this year.
They have had publicity in the past, but not quite on the Branson scale.
So far, the other side of the peak debate has yet to find celebrity backing, although it is quietly earning more adherents, who are asking whether demand rather than supply will be the first to run out as climate change policies change energy consumption habits.
The Paris-based International Energy Agency, which advises 28 governments including the UK — said on Thursday oil demand, rather than supply, looks to have peaked in the developed world. If true, that would ease any strain on supplies that may develop in future and is a more reassuring message – provided of course you don’t own or work at an oil refinery in Europe or you’re not a major oil exporting country.
So who is right? Time will tell, but future expectations for the oil price do not yet suggest extreme concern about supply.
Investors expect the price of crude to trade at $95 a barrel in December 2018. That is around $20 more than the present level, but still some way short of the record high reached in 2008 near $150
@7 months ago with 167 notes
#Branson’s #Virgin #Group #gets #into #peak #oil
* U.S. same-store sales up 3 pct, int’l up 8.1 pctOct 18 (Reuters) - Domino’s Pizza Inc reported a
quarterly profit that topped Wall Street’s expectations, helped
by higher sales at established restaurants around the world.Domino’s had net income of $22.1 million, or 36 cents per
share, for the third quarter ended Sept. 11, up from $16.6
million, or 27 cents per share, a year earlier.Excluding items, Domino’s profit was 35 cents per share,
topping analysts’ average estimate by 2 cents, according to
Thomson Reuters I/B/E/S.The pizza delivery chain, which competes with Papa John’s
International Inc and Yum Brands Inc’s Pizza
Hut chain, said revenue rose 8.3 percent to $376.3 million.Sales at Domino’s restaurants open at least one year were
up 3 percent in the United States and up 8.1 percent
internationally. Same-restaurant sales are a gauge of
restaurant performance.Ann Arbor, Michigan-based Domino’s changed its U.S. pizza
recipe last year to make it more flavorful.
@7 months ago with 5 notes
#UPDATE #1Dominos #profit #tops #Street #as #sales #hold #up
By Raghuram Rajan
The opinions expressed are his own.
How will the eurozone crisis play out in the next few weeks? With luck, Italy may soon get a credible government of national unity, Spain will obtain a new government in November with a mandate for change, and Greece will do enough to avoid roiling the markets. But none of this can be relied upon.
So, what needs to be done? First, eurozone banks have to be recapitalized. Second, enough funding must be available to meet Italys and SpainÂs needs over the next year or so if their market access dries up. And, third, Greece, now the sickest man of Europe, must be treated in a way that does not spread the infection to the other countries on the eurozoneÂs periphery.
All of this requires financing  bank recapitalization alone could require hundreds of billions of euros (though these needs would be mitigated somewhat if the sovereign debt of large eurozone countries looked healthier).
In the short run, it is unlikely that Germany (and Northern Europe more generally) will put up more money for the others. Germans are upset at being asked to support countries that do not seem to want to adjust  unlike Germany, which is competitive because it endured years of pain: low wage increases to absorb the former East GermanyÂs workers and deep labor-market and pension reforms. The unwillingness of the Greek rich to pay taxes, or of Italian parliamentarians to cut their own perks, confirms Germans fears. At the same time, German politicians have done a poor job explaining to their people how much they have gained from the euro.
But we are where we are. A glimmer of hope is EuropeÂs willingness to use the European Financial Stability Facility (EFSF) imaginatively  as equity or first-loss cover. Clearly, some of the EFSF funds will have to go to recapitalize banks that cannot raise money from the markets. As for the rest, the amounts that are not already committed to the peripheral countries could be used to support borrowing that can be lent onward to Italy and Spain.
There is, however, no consensus about how to do this. Some propose bringing in the European Central Bank to leverage the EFSFÂs funds. This is a recipe for trouble. Giving the ECB a quasi-fiscal role, even if it is somewhat insulated from losses, risks undermining its credibility. And if Italy were helped, the incoming ECB President, Mario Draghi, an Italian, would be criticized, no matter how dire ItalyÂs need. Moreover, financing would have to be accompanied by conditionality, and these institutions have neither the requisite expertise nor the necessary distance from the countries at risk to apply and enforce appropriate conditions.
Finally, both the EFSF and the ECB ultimately rely on the same eurozone resources for their financial strength. If markets start panicking about large eurozone defaults, they could question whether even a willing Germany has the necessary capacity to support the EFSF-ECB combine. Put differently, these institutions do not offer a credible, non-inflationary, external source of strength.
Indeed, the eurozoneÂs problems might soon become too big for its members to address. The world has a stake in their resolution. And it has an institution that can channel help: the International Monetary Fund. The IMF could set up a special vehicle along the lines of its New Arrangements to Borrow (NAB), which would be capitalized by a first-loss layer from the EFSF with the IMFÂs own capital comprising a second layer.
This NAB-like vehicle could borrow as needed from countries, including the United States and China, as well as tap financial markets. It would offer large lines of credit to illiquid countries like Italy, with conditionality intended to help such countries resume borrowing from markets at reasonable cost.
A special vehicle is required because the amounts that must be made available far exceed what IMF members can usually access, and it is only right that if the eurozone seeks such amounts for its members, it should bear a significant portion of any potential losses. At the same time, the FundÂs capital resources would back the vehicle if the first-loss buffer provided by the eurozone were eroded; that way, the market would understand that strength from outside the eurozone can be brought to bear.
The IMF is not an institution that inspires warm and cuddly feelings. But it is also not the mindless preacher of fiscal austerity that it is accused of being  and it should start taking the lead in managing the crisis, rather than holding up the rear. The eurozone needs an independent outside assessment of what needs to be done, and rapid implementation, before it is too late and the incipient bank runs become uncontrollable.
Of course, the IMF cannot act without the permission of its masters, the large countries. The eurozone should suppress any wounded pride, acknowledge that it needs help, and provide quickly what it has already promised. The US should continue pushing hard for a solution. And the emerging-market countries should pitch in too, once some safeguards for their money are in place. Unresolved, the crisis will spare no one.
As for the birthplace of the euro crisis, GreeceÂs debt will almost surely have to be restructured. But adequate funding structures for Italy and Spain must be in place before any resolution. So, while others have to step forward to do their part, it is best if Greece steps back from the brink.
This piece comes from Project Syndicate.
@7 months ago with 72 notes
#A #standby #program #for #the #Eurozone
Lee has proved to be a reliable and enthusiastic U.S. ally, lining up with Washington on North Korea, Afghanistan and anti-piracy efforts in Somalia and hosting a G-20 summit aimed at stabilizing the world economy.”South Korea really sort of stepped up, which is part of Lee’s agenda for Korea to be more of a global player at a time when the United States wanted to see allies like Korea stepping up,” said Korea expert Victor Cha of the Center for Strategic and International Studies (CSIS) in Washington.Lee’s sixth meeting with President Barack Obama since 2009 will feature a full state dinner on Thursday — following his address to a joint session of the U.S. Congress shortly after American lawmakers are expected to approve a bilateral free trade agreement that removes most tariffs between the two economies. South Korea’s parliament is also debating the pact.The Obama administration has said the trade pact signed in 2007 and modified last year will create thousands of U.S. jobs and double exports to South Korea in five years. Washington hopes the trade deal will build momentum for a wider Transpacific free trade arrangement.”The U.S.-Korea relationship now is about as strong as it’s been in a very long time, and the passage of the KORUS — the Korea-U.S. free trade agreement — is really significant not only in terms of strengthening U.S.-Korea security and economic ties, but its broader import or meaning for U.S. engagement in Asia,” said Michael Green, a CSIS Asia expert.RE-ENGAGING NORTH KOREAObama and Lee will visit Detroit, the home of the U.S. automobile industry, on Friday.The two presidents will also discuss ways to re-engage with North Korea. Seoul’s ties with Pyongyang soured after Lee took office in early 2008 with a pledge to link large-scale aid to progress in U.S.-led international efforts to end North Korea’s nuclear programs.Ties between the two Koreas further deteriorated following the North’s two deadly attacks on the South last year — the sinking of a South Korean warship and the shelling of an island near their contested maritime border.The provocations by the North, which walked away from six-country nuclear negotiations and conducted its second nuclear test in 2009, helped bring Washington and Seoul closer together.On North Korea, Lee told his parliament he would seek “principled dialogue” with Pyongyang while having “flexibility” — a position that departs from an earlier rigid stance insisting on full reciprocity from Pyongyang.”The government will make efforts to put inter-Korean relations on a normal footing and continue to prepare for peaceful unification.” said Lee, who also vowed to strengthen his country’s military to deter North Korea.Although Seoul’s outreach to Pyongyang has not borne any fruit, Cha and other analysts expect that the United States will also resume engagement with North Korea in the hopes of moderating the North’s behavior and ensuring the cooperation of the North’s ally China in future regional disarmament talks.”The longer that you do not engage with (North Korea), the more likely it is that they will carry out another provocation, whether that is a nuclear test or whether that is an armed conventional provocation against the South again,” said Cha.
@7 months ago with 37 notes
#South #Koreas #Lee #in #US #to #talk #trade #North #Korea #strategy
