Bloomberg BusinessWeek, Jan 26, 2015 (III)

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Peter Coy, The US Welcomes the Good Kind of Deflation.
www.bloomberg.com/news/articles/ ... oying-the-good-kind

Quote:

(a) In US: "Job growth is running at almost 250,000 a month, creating a virtuous circle: When people get hired they spend more, putting money into the coffers of companies that go out and increase their staffing.

"There are two kinds of deflation. The good kind occurs when prices fall because efficiency and technology lower the cost of products and services. The bad kind occurs when unemployment is high and a lack of demand forces companies to cut prices.

"The US is enjoying a bit of the good deflation. The US consumer price index fell 0.4 percent in December, but it was mostly because advances in shale oil production have flooded the market with cheap oil.

(b) "Europe is fighting the bad kind of deflation. * * * The dollar’s rise vs the euro makes European goods and services cheap in the US and American goods and services expensive in Europe. That will put a dent in US employment growth this year, though how large a dent is hard to say. In effect, Europe is exporting part of its deflation and unemployment problem to the US.

(c) "Is Europe instigating a currency war, trying to depreciate its way to growth by beggaring its neighbors? Not exactly. The ECB [European Central Bank] is using low interest rates to encourage borrowing, drive up stock prices, and promote domestic growth, as is the Bank of Japan. In both cases, central bankers argue that currency depreciation is a side effect, not the objective.

Note: summary underneath the title in print: As Europe wrestles lack of demand, US consumers are optimistic

choi

Matthew Philips, Oil Traders Look for a Bonanza Like 2009.
www.bloomberg.com/news/articles/ ... a-bonanza-like-2009

Quote:

"In 2008 oil prices crashed from $146 a barrel in July to $36 in December. Traders kept buying crude * * * sat on it and waited for prices to rebound. By the end of 2009, prices had almost doubled from their lows of a year earlier, and trading companies booked fat profits as they unloaded their stored oil. Gunvor, the world’s fifth-largest independent oil trader, made a record profit of $621 million that year, according to a company bond prospectus.

"A Jan 16[, 2015] report from the International Energy Agency says that oil trading companies have already booked as many as 15 of the world’s second-largest class of oil tankers, known as Very Large Crude Carriers, each with enough capacity to store as much as 2 million barrels.

Note:
(a) summary underneath the title in print: They're buying crude and leasing supertankers to store it
(b) Gunvor, (company)
en.wikipedia.org/wiki/Gunvor_(company)
(registered in Cyprus, with its main trading office [and headquarters] in Geneva; founded in 2000; section 1 Etymology)
(c) For Very Large Crude Carriers, see oil tanker
en.wikipedia.org/wiki/Oil_tanker
(section 2 Size categories)