Commodities – Buyer Engagement

From a seller or a seller mandates point of view, the biggest time waster is the illusion that we are actually talking with a buyer, an authorised buyer mandate or agent.

Note all agents for publicly listed companies have to be lodged with the appropriate judiciary, the SCC for the USA or ASIC for Australia

However, normally we are taking to someone who says they are one of these, the end buyer, the authorised mandate or agent, but isn’t.

To combat this we have instituted a simple change, when asked we simply follow the process below.

1         Yes we can supply Crude and refined Oil products.

2         Yes we supply products CIF delivery at a discount (usually quantity dependant) below a local  benchmark (Except for Mazut which is generally sold at a fixed price)

3         But No, we won’t send an offer until the buyer has approved (in principle) our Conditions of contract

4         We then send out a file which includes our conditions of contract, upon which on agreement in principle to, we generate a fully authorised offer.

Silence usually follows, and Yes I would rather have silence than a full inbox and many deals, none of which are real.

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Clear evidence of the end of the USD$ as dominant International Trading currency

This caught my attention recently …. an interesting read

http://www.sovereignman.com/finance/another-kick-in-the-groin-more-european-allies-join-china-led-bank-despite-us-frustration-16618/

After the UK announced that it will join the new China-led Asian Infrastructure Investment Bank (AIIB) as a founding member late last week, Germany, France and Italy decided yesterday to follow Britain’s lead and join as well….

This is part of an important transition from the old domination of the USD$ in Internal Trade, particularly in commodities, where up to now, the USD$ has been dominant. Recently there has been an increasing trend to trade commodities in the buyers or sellers currency – for instance in the case of transactions in the Chinese Yuan and the Russian Ruble.

These changes may well be detrimental to the United States in how it pays for overseas debt, that isn’t held in US Dollars. In that case it can no longer just print the necessary currency, it would have to buy the overseas currency at the prevailing exchange rate …. and with the liquidity of the United States already in question, with a estimated net solvency of approximately minus USD$60 trillion – the long term view is not positive, especially when the financial speculators start selling the USD aggressively.

The USA has no way of paying out its current deficit of in excess of USD$18 trillion dollars, accumulated by putting wars on credit card so to speak.  The United States, financially speaking is like a dead man walking …. I am not a financial specialist, but I cannot see a way out for them, unless they seriously cut their spending and increase income currently avoided through taxation loopholes. Surely if corporations are people then like the normal citizens of the USA, they should be taxed on the world wide income, regardless of the tax evasion strategies which they have in place.

A personal strategy would be not to leave funds in USD$ … to ruthlessly minimize your debt, and to put what funds you do have into “safe” (if there is such a thing) currencies, but preferably into hard assets like real estate or gold / silver, the actual metal not the paper equivalent. My personal strategy will be primarily real estate and keeping a minimum amount in liquid assets – and in setting up a simpler life style, whatever that means for you.

One thing that has had a marked effect on the value of the USD$ has been the confidence, Yes confidence that the world has in the currency, everything changes, that perception has changed in no small way due to the war that the American Republican party has been waging against President Obama, holding the USD economy as hostage … this in my view has been a major reason for the loss of face which has led to the loss of faith in this currency.

Good Luck .. just know everything changes and we are always in transition from what was, to what will be.

Stercoll Energy Service – an Oil buyer

We were recently approached by a company acting for Stercoll Energy Services Ltd …  (Stercoll details below)  … we agreed to issue the FCO once we received a categorical confirmation of the acceptance of the offer including the procedures for such .. below is their confirmation of their acceptance, received ..on the 20th of July 2012

++++++++++++++++++++++++++

Attn: Mr. David Sanders
Subj: D2 Gas Oil CIF Philippines

Status: Buyer, ready to proceed

Buyer has accepted all condition and oil specification offered by the seller, he is now ready to proceed. Please issue FCO a.s.a.p as per advised company and name of buyer via buyer’s designated information as stated below:_

Company Name: STERCOLL ENERGY SERVICE LTD.  INDONESIA
ATTENTION:        Mr. Datuk MYR UGUNG SIDYU
                            Director Asian Regional Head Quarters

Email:                  info@stercoll.com

++++++++++++++++++++++++++

The Buyers Website is :   www.stercoll.com

The Full Corporate offer was issued to this address on the 24th  of July 2012, it was valid for 5 days.

We were approached shortly after issuing the Full Corporate Offer from the Skype address, of chief.emeka kalu a person who said that they were the buyer for the main company Stercoll .. corporate details available on the above website.

Just before the end of the validity period this same contact sought to vary the procedures, despite receiving confirmation of their agreement to them as above.

We gave the buyer all help necessary within the procedures to move forward … the FCO expired on July 30th, 2012

No further contact was received from the buyer by way of explanation as to why they failed to proceed. This behavior is unprofessional and was unexpected, especially after they agreed to the whole offer including procedures before we would even consider issuing the offer.

For us this whole exercise was a waste of time … and an expensive one, as it meant that the oil was not available to other buyers during the preparation and validity period of the FCO.

The “buyer” proved to be a time waster … at the very least.

The end of business as usual …

Life is good for many of us, so that it’s hard to confront the change that is here, and with that the inevitable end of the quality of life that we see around us.

So it strikes me as obvious that the world is going down a road, in some ways where civilizations have gone before, but not for the same reasons, we are in fact going down a one way road, to the destruction of what is, that we have come to consider as normal.

The reasons are self evident, they come back to greed and the need for ever more growth, leveraged growth, more .. more …  all are unsustainable flawed strategies –  I ask you how can one achieve continual growth in a finite world … this insatiable need for more … we have been all living in a fantasy land, especially the Politicians, who are convinced as they focus on statistics and spin, that they are doing a great job when all around, their citizens are paying the price for their inability to have a real original thought – their incompetence, their lack of leadership, their focus only on re-election, their terror at the inevitability of change – drives them to makes nice little touches around the edge of policy whilst the heart of the country decays and we lumber forward, down the wrong path.

This insatiable greed of a few, has brought us beyond the brink of a global financial meltdown, we are in fact toppling over the edge into oblivion as we speak … whole countries and regions are already suffering in the Euro zone, but the whole world will be within the inevitability of what is to come … our mindless pursuit of the status quo .. has indebted the majority of those in the present to virtual serfdom whilst those in control … known colloquially as the 1% .. but who are in reality probably more like just 10,000 people around the word, are so afraid of change that they have convinced our Politicians (who are only driven by the need to be re-elected) that they need to maintain the status quo, this flawed and failed financial structure – which has little benefit to the majority 99+%, except more of the same. 

It is time we allowed the system to fail, we no longer have the ability to prop it up –  we have to stop, mortgaging future generation to pay for our mistakes or steal their birthright … our beautiful home, this spaceship called earth.

When I walk around cities, I see the crumbling structures, both in stone and in systems that are struggling to maintain what we once were, I see lots of papering over the cracks, whilst the infrastructure rusts and crumbles away in silence.

Within the decade we are in, what is hidden now, will become visible to all, in the first instance with the failure of the Euro$, where whole governments are desperately trying to hang on by their finger nails … they will fail … the inevitable collapse will spark a world wide financial meltdown that has never been witnessed in history. In the United States, cities and states are even now technically bankrupt … what will happen when the Euro zone of some other key point in the chain fails .. the banks will fail … there can be no bailout .. change will be here –  this global correction will affect everyone in every country, those who think they are immune are living in fantasy land – this new reality will inflict misery and unrelenting hardship on everyone.

It will not be fun … in fact I cannot see an upside in the short term … it may take a couple of decades perhaps a generation before we can get back on our knees … maybe as long as a 50 years to a century before we can stand up and face the future with any sort optimism … the only way we have any chance of a future, is by changing what we value.

The OWS … the Occupy movement is a symptom, and a necessary one …. in American the Constitution has been and is being continually being walk into the mud, whilst those in power seek to silence those who would say … we have a problem .. sadly, the world economy is past the ability to be healed … change is here Ladies and Gentlemen, hang on, because we are in for the ride of our lives, the destination, the abyss … some of us will come out the other side … but very few … for us to survive, and have the capacity to we will have to have the ability to think outside of the box and really work together without agendas, and realise that economies are not about numbers … they are about fully utilizing all of us, for the benefit of all of us ….

I have spoken of this before back in between 2008 and now … then it was a warning .. now it is too late … money will be irrelevant to our future … the accumulation of wealth for its own sake, is now past its use by date … when it happens, from then on, and in the short to medium term, the only thing that will matter is being able to be sustainable in food, in shelter and energy …

Good Luck …

Greece and the Euro Zone

It hardly matters why Greece is in the mess they are in … they just are …

What is the future … whatever the way forward it is serious stuff … every which way you turn there are serious consequences.

What is sure is that the current situation cannot continue …

If Greece stays in the Union, the future for the people of Greece is dire … already there is severe unrest … and unless a political solution is found the only way that this will be resolved is on the streets. From the information I have been able to glean the average person, especially those who are on fixed income and pensions are in severe financial straits .. with no likely hood of a positive outcome in the foreseeable future …

Why is the Euro Zone trying so hard to keep Greece in the Union, aside from the obvious far from small crack it shows in the community, there is a benefit to the manufacturing countries within the Euro Zone because of the perceived financial problems of countries such a Greece, Portugal, Spain, Ireland and even Italy … on the world markets this keeps the overall value of the Euro$ itself depressed ….

This has benefits for countries such a Germany, Italy and France with significant manufacturing sectors … by the virtue of Greece being part of the Union, the lower exchange rate works for these manufacturing countries …. as it makes their products competitive on the world stage …

If Greece and others leave the Union, aside from the financial meltdown that will affect Greece … it will strengthen the Euro and make their products more expensive … and less competitive … how do you think that this will affect those manufacturing countries  .. it will take them into a financial slowdown …

Really the future financial health of those manufacturing countries within the Euro zone … is in the hands of the Greek people ..

This is the reason I think that the Euro Zone wants to keep Greece in the Union …

Why is it that countries are beholding to the banks … all the assets of Greece will be sold off in a fire sale to placate the numbers me … what did the people of Greece do to deserve this …

Frankly I do not see the Greek people voting to stay within the Union …

Bonuses – This looks like a good idea

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Now with the European Union likely to legislate to specify how bonuses will be paid, for instance a large benefit is only able to have a 20% cash bonus… I am sure the affected people are even now re-structuring their pay to counteract this… perhaps by increasing the fixed component of the pay package…

In the United States it seems is not going to legislate, but issue guidelines… which I am sure that they will be bent, sidestepped and outright broken as a result.
However staying in the USA for a moment, something new has come to my attention…. a new basis for paying bonuses… as we know once of the companies, formerly a major casualty of the sub-prime fiasco and their own corporate greed at that time, has come up with what I believe is a solution… that Compensation for those who receive bonuses should be tied more closely to corporate debt rather than equity… what a resounding good idea, as well as responsible one… how unlike a Corporation.!

I am speaking here of AIG (American International Group) who announced that it will link incentive pay to the value of their insurer’s bonds.

This makes cowboy activities less likely, especially as a short term tactical strategy, and I hope this will turn the train around and move it back to responsibility not only to the company, the industry but also the shareholders – but also to the Corporate world in general.  I believe that these types of incentives protect the interest of bondholders and the ultimate value of the company… this will come to be a good strategy especially in uncertain times, and more particularly when a company’s solvency is in question.

Perhaps the rest of the world, particularly The European Union as well as all markets affected by this disease should take notice

Australian Political Reality

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The fact that Julia Gillard is now the first Australian Women Prime Minister is a momentous event for Australia… one that I predicted all the while Rudd & Swan kept on shooting themselves in the feet through their non-consultative approach to leading the country – with the final nail being the RSPT. Even today Rudd seemed to be in shock.

Julia Gillard maybe if she and more pertinently the Labour party does not self-destruct between now and the next election the first elected woman Prime Minister. That would be great, that Australia could elect a Prime Minister, representative of the majority of Australians (by sex).
Now if only they could find a decent treasurer who had some practical knowledge of Macro and Micro Economics with some out of the box original thoughts and the gravitas to deliver them Labour might have a good team.

So Political reality is here… hopefully the Coalition may take the opportunity to refresh their current loosing team, but they won’t… they need to lose the election first …. lose the opportunity again … before they try and sort through the the very few quality leaders they have to choose from.