Via

Financial Times;

Last week Oleg Deripaska revealed his concern over the financialisation of physical aluminium. He called for output cuts, effectively to take the place of funded “dark” inventory, in order to bring the market back to equilibrium.
Then Reuters reported at the weekend that Chinese banks and companies –which had tried to seize commodity collateral which had been pledged for loans, now defaulted upon — had found the metal in question never existed.

But read it all. (h/t Melinda Romanoff)

Will The Baltic Dry Bounce Off Satan’s Bottom?

Unregulated banks making loans on invisible inventory and now what inventory they did have isn’t moving.

Steel sector companies have found themselves particularly vulnerable as economic growth slows in China because many played games with credit lines, bank loans, inventory collateralization and multi-company borrowing schemes.
Some steel manufacturers and trading firms used product inventories as collateral for bank loans, then increased their money in hand by convincing another bank to exchange the lenders’ acceptance bills for cash.

h/t: maz2

In July, Spaniards withdrew a record 75 billion euros, or $94 billion, from their banks — an amount equal to 7 percent of the country’s overall economic output …

Via Drudge, where there’s more.

Iran, North Korea sign technology agreement (h/t Kevin)

Yeah, it seems as paranoid and nuts as it did when it was said about Bush, but this stuff is not being said in an extremist corner of the internet — it’s being said in a middle-class suburban salon in an area where 30% (or more) of the businesses are now shuttered, and houses are being foreclosed upon and then re-occupied seemingly overnight, creating what the stylist called “a neighborhood full of changes and no hope. Forget about new small businesses,” he said, gesturing across the street, where a small food shop’s “opening soon” banner had become sun-faded and worn, even as the door remained locked. “That guy is never going to open.”
“I can’t get a loan,” the woman in the next chair told me. “I want to consolidate my kid’s college loans into one loan, and the credit union says they don’t give loans to consolidate student loans. I told them, I have job-security and excellent credit — what if I just want a loan for myself, a personal loan?” She was in high dudgeon and her voice grew louder in a perfect arc of Long Island umbrage-taking. “They said they’d need to know what it was for. I said, ‘it’s my personal business what the loan is for! Maybe I want to go on vacation, throw a wedding, pay off college loans, why do you have to know?’, and they said, no, they had to know what the money was for, because they’d be paying it out for me — like I’m a child who can’t be trusted with money! So, I figure, okay, it’s a credit union, I’ll try my bank. They said they don’t make personal loans anymore! It shook me up. I felt like maybe I didn’t realize how bad things are.”

More.

Consumer confidence falls in August. Unexpectedly.

Telegraph – Unilever will adopt marketing strategies used in developing countries in order to drive future growth in Europe…

Buffett Cancels Municipal-Debt Bet Five Years Early – Berkshire’s move comes as investors are flooding into municipal debt, keeping bond prices high and yields low.
h/t John G

Ambrose Evans-Pritchard;

Container volumes arriving at European ports plunged in June, dashing expectations of a summer rebound. Imports fell 7.5pc from North America and 9pc from Asia. Flows into the Mediterranean region crashed by 16pc, reflecting the violence of the recession in Greece, Italy, Spain, and Portugal.
Buckling trade is the coup de grace for countless shippers still clinging on by their finger tips. “The market is barely paying above operating cost. If you are loaded with debt, you are in trouble,” said Martin Smith from ship operators Norddeutsche Vermögen in Hamburg.

Can anyone think of a logical reason why the Social Security Administration would be purchasing ammunition?
Via

Chinese people like to brag that if they all jumped at the same time the whole world would feel it. Well, we’ll also feel it if they all fall down at the same time.

Syd B – “Can anyone think of a logical reason why the National Weather Service would be purchasing ammunition?”

Expert Explains In Horrifying Detail How The Next Shock Will Shatter The Global Economy
The only thing to take comfort in is the word “expert”.
h/t Kevin

Bloomberg;

Stephenson Clarke Shipping Ltd., started in 1730, has been placed into liquidation, according to a statement from accounting firm Tait Walker. The Newcastle-Upon-Tyne, England- based shipper, which employed nine people, sold off its final vessel in July, according to the statement.
The Baltic Dry Index, a gauge of rates to transport dry- bulk commodities including grains and coal by sea, is down 55 percent this year and on course for a fourth annual slide in five years, data compiled by Bloomberg show. The current slump is “one of the worst experienced for many years,” the shipping company said in the statement.

h/t POK

Germany’s manufacturing industry is now in a rout. Output and new orders dove in July at a rate not seen since April 2009, the depth of the great recession. It was the 4th month in a row of lower production volumes, and the 13th months in a row (!) of declining new orders—a terror for future production. The overall PMI index crashed to the lowest level since June 2009. Exports were hardest hit, particularly to Western Europe, Asia, and the US, the three largest markets in the world! The decline in exports was steepest since May 2009. And there is talk of “job shedding.”

Royal Dutch Shell is pulling some of its funds out of European banks over fears stirred by the euro zone’s mounting debt crisis…