http://www.businessinsider.com/floating-chinese-dead-pigs-rise-to-over-7500-2013-3
http://www.zerohedge.com/news/2013-03-13/hogwash-spreading-floating-pig-carcasses-are-found-second-chinese-river
Floating Chinese Dead Pigs Rise To Over 7500 — Here's What It Means For China's Food Industry
Thousands of dead pigs in a Shanghai river have cast a spotlight on China's poorly regulated farm production, with the country's favourite meat joining a long list of food scares.
As of Friday, the number of carcasses recovered in recent days from the Huangpu river -- which cuts through the commercial hub and supplies over 20 percent of its drinking water -- had reached more than 7,500.
Shanghai has blamed the farmers of Jiaxing in neighbouring Zhejiang province for casting pigs thought to have died of disease into the river upstream, but officials from the area have admitted to only a single producer doing so.
The city has stepped up inspections of markets to stop meat from the dead animals from reaching dining tables of its 23 million people.
From recycled cooking oil to dangerous chemicals in baby milk powder, a series of food scandals in China has caused huge public concern.
Pork is king in China, accounting for 64 percent of total meat output last year, and urban residents with growing wallets and waistlines ate 20.63 kilograms (45 pounds) of the meat per person in 2011.
Images of Shanghai's dead pigs have hit the nation's collective gut, but in Zhulin village, a major hog-raising centre in Jiaxing, the farmers claim their innocence in the scandal.
"The government is very strict. We give our pigs vaccinations. If they are sick, they can't be sold," said Pan Juying, 57, as she hoisted two baskets of freshly cut grass to feed her eight pigs.
But a bloated piglet lying by the roadside a hundred metres (yards) away from a stream showed that not all dead animals are properly disposed of.
Wang Wei, a veterinarian for the Hengyuan Company which produces medicines for farm animals, said a large number of pigs died from unknown causes in Zhejiang just before and after the Chinese Lunar New Year in February.
"It must have been a big pig farm" that was responsible for events in Shanghai, he said in Zhulin's main street, which is lined with animal medicine and feed stores. "They can't control an outbreak of infectious disease."
Despite laws against the practice, animals that die from disease in China can end up in the food supply chain or improperly disposed of.
In Wenling, also in Zhejiang, authorities announced this week that 46 people had been jailed for up to six-and-a-half years for processing and selling pork from more than 1,000 diseased pigs.
China was rocked by one of its biggest-ever food safety scandals in 2008 when the industrial chemical melamine was found to have been illegally added to dairy products, killing at least six babies and making 300,000 people ill.
Across China, cheap recycled cooking oil is available made illegally from leftovers scooped out of restaurant drains. Amid public disgust authorities arrested more than 30 people over its sale, but it remains commonplace.
In another recent incident, US fast food giant KFC was hit by controversy after revealing some Chinese suppliers provided chicken with high levels of antibiotics, in what appeared to be an industry-wide practice.
Zhu Yi, a professor at China Agricultural University, said that the country's vast number of small-scale farmers were "hard to supervise and regulate".
"Food safety is an issue that requires continuous efforts, you simply cannot put everything right once and for all," she said. "The current livestock breeding model is too crude, and the standards too low."
But large-scale production also carried risks of its own, she added.
"Every country has its own problems," she said. "The highly industrialised European Union was caught up by the horse meat scandal."
http://www.zerohedge.com/news/2013-03-13/hogwash-spreading-floating-pig-carcasses-are-found-second-chinese-river
Hogwash Spreading - Floating Pig Carcasses Are Found In Second Chinese River
Submitted by Tyler Durden on 03/13/2013 07:38 -0400
While the media is transfixed with the final figure of floating dead pigs found Shanghai's Huangpu River, which at last check was crossing 6000, a bigger problem has emerged: pig carcasses have now been spotted in a different river, which means that the worst case scenario could be in play. From Shanghai Daily: 'Pig carcasses now found in Hubei river: Around 50 pig carcasses were today discovered in a tributary of the Yangtze River in Yichang City, Hubei Province, China Central Television reported. Some of the bodies were highly decomposed, said the report. The carcasses were spotted floating near Wulong Village. The local government has launched an investigation and dispatched officials to the scene. The news has attracted much public attention as it follows the discovery of thousand of dead pigs in Shanghai's Huangpu River, a branch of the Yangtze. By late yesterday, almost 6,000 pig carcasses had been fished out of the river and an investigation into where they came from is ongoing."
Recall our prediction from yesterday:
The bad news: what happens if China were to uncover that whatever ailments were present in the current batch of "hog wash" has become an epidemic? Just how high will the most important price tag in all of China - pork meat - soar to if quality controls were to be enabled? And what happens to food inflation which in China is actually indicative of reality due to its component as a percentage of CPI being one of the highest in the entire world?
So yesterday one river; today two rivers; tomorrow ... ? And if this is what the media isrevealing, one can imagine how big the "hogwash" scandal must be behind the carefully controlled media scenes.
The bigger question remains: just what is really going on with the Chinese pork industry, which in 2011 was responsible for nearly half a billion pigs produced, or more than the entire rest of the world, and is the primary source of food for a vast majority of the population.
How long until the local population starts demanding real answers ?
and........
http://www.zerohedge.com/news/2013-03-13/china-down-fifth-day-row-means-us-alone-yet-another-forced-market-ramp-attempt
China Down Fifth Day In A Row Means US Is Alone In Yet Another Forced Market Ramp Attempt
Submitted by Tyler Durden on 03/13/2013 06:48 -0400
- Bank Index
- Bank of Japan
- Bond
- Borrowing Costs
- China
- Equity Markets
- Eurozone
- Foreclosures
- France
- Germany
- Gross Domestic Product
- High Yield
- Hong Kong
- Italy
- Japan
- Jim Reid
- Markit
- Medicare
- Monetary Policy
- Nikkei
- Nomination
- POMO
- POMO
- Precious Metals
- President Obama
- Real estate
- Reality
- Recession
- recovery
- SocGen
- Sovereigns
- United Kingdom
- Yen
This is the third day in a row that an attempt to mount an overnight ramp out of the US has fizzled, with first the Nikkei closing down for the second day in a row and snapping a week-long rally, and then the Shanghai Composite following suit with its 5th consecutive drop in a row (perhaps it was drinking piggy water?) as the rumblings out of the PBOC on the inflation front get louder and louder, following PBOC governor Zhou's statement that inflation expectations must be stabilized and that great importance must be attached to inflation. Stirring the pot further was SAFE chief Yi Gang who joined the Chinese chorus warning against a currency war, by saying the G20 should avoid competitive currency devaluations. Obviously China is on the edge, and only the US stock market is completely oblivious that the marginal economy may soon force itself to enter outright contraction to offset the G-7 exported hot money keeping China's real estate beyond bubbly. Finally, SocGen released a note last night title "A strong case for easing Korean monetary policy" which confirms that it is only a brief matter of time before the Asian currency war goes thermonuclear.
Moving to Europe, it should surprise nobody that the only key data point, Eurozone Industrial Production for January missed badly, printing at -0.4% on expectations of a -0.1% contraction, down from a 0.9% revised print in December as the European recession shows no signs of abating.
Shortly thereafter, Italy followed up with a disappointing bond auction, selling just €6.99 billion in 2015/17/18/28 bonds, below a maximum target of €7.25, and where the bid-to-cover of the 2.75% 2015 bond auction was 1.28, the lowest since January 2012 as demand continues to drift. Yields rose across the board, with the 2015 BTP pricing at 2.48% compared to 2.30% previously, the 2017 CCTeu at 2.95%, vs 2.55%, the 2018 CCTeu at 3.03% and the 2028 yielding 4.90%. The broadly weak auction sent Italian yields to overnight wides as the market was very much unimpressed with the first debt take up following the Italian elections.
The Italian auction was in broad contrast to the German 2015 Schatz issuance, which priced at 0.06%, down from 0.21%, at a 1.7 BTC, and 14% retention. Not all news out of Germany was good, however, following confirmation from Commerzbank of yesterday's news that it would proceed with a €2.5 billion capital raising plan to repay funds, sending the stock more than 10% lower on the day. Looks like the Great Un-Rotation from the periphery to the core, and from stocks to bonds is once again starting to pick up.
So while the rest of the world did bad or worse than expected for the third day in a row, it will be up to the POMO and seasonally adjusted retail sales data in the US to offset the ongoing global contraction, and to send the perfectly manipulated Dow Jones to yet another all time high, in direct refutation of logic and every previous market reality ever.
Such is life under central planning.
News headline bulletin from the overnight session via Bloomberg:
- Treasuries steady, with 10Y yields declining for a second day. Yen gains vs U.S. dollar, EUR/USD falls.
- Chinese stocks fell, dragging the Shanghai Composite to a two-month low, as real estate and construction companies tumbled on concern policy makers will step up property curbs
- Borrowing costs rose at Italy’s sale of 2.75% 2015 notes, with an average yield of 2.48% vs. 2.30% at a Feb. auction; bid-to-cover was lowest in over a year
- Homeowners with underwater mortgages in U.S. states worst-hit by foreclosures are leading refinancings after the government expanded programs to aid borrowers, strengthening the weakest link in the housing recovery
- Haruhiko Kuroda will appear before parliament again even if he’s confirmed this week as Bank of Japan governor as a technicality in the nomination process means lawmakers will vote twice on his candidacy
- The Swedish krona’s appreciation hasn’t left the currency strong enough to threaten the central bank’s inflation target, Deputy Governor Barbro Wickman-Parak said
- Treasury sells $21b reopening of 2% Jan. 2023%; yield 2.02% in WI trading. 3Y notes sold yesterday drew 0.411% with mixed bidder participation metrics
- BofAML Corporate Master Index OAS holds at 145bps as $10.4b priced yesterday. Markit IG at 80bps, near YTD low 79bps. High Yield Master II OAS steady at 476bps; $1.05b priced yesterday. CDX High Yield closed at 104.19, near highest since Feb. 2011
- EUR/USD trades at 1.3019. Nikkei falls 0.6%, other Asian stock markets fall. European equity markets and U.S. index futures decline. Global sovereign yields mostly lower, while Italy/Germany spread widens. Energy gains, precious metals lower
Quick view of where the markets stand:
- S&P 500 futures down 0.07% to 1545.7
- Stoxx 600 down 0.2% to 294.77
- US 10Yr yield at 2.01%
- German 10Yr yield at 1.48%
- MSCI Asia Pacific down 0.55% to 135.42
- Gold spot down 0.1% to $1591.21/oz
- MSCI Asia Pacific down 0.55% to 135.42
- Nikkei 225 down 0.61%, Hang Seng down 1.46%, Kospi up 0.32%, Shanghai Composite down 0.99%, ASX down 0.5%, Sensex down 0.91%
DB's Jim Reid summarizes the full overnight action:
We always say that the week after payrolls should be fairly quiet as there is usually a lack of tier one data. Often something then comes along to focus the market's mind and liven things up. Well not this week so far. It’s been pretty dull to date. Maybe today's US retail sales or the first post election sitting of the Italian parliament this Friday might provide some interest.
One of the main talking points yesterday was a disappointing UK industrial production print. Industrial and Manufacturing Production in the UK fell -1.2% and -1.5%, respectively in January. This fell short of broadly flat expectation. On the back of that, our own Dr. Buckley took a look at the outlook for Q1 GDP (initial reading is due on the 25th April) and he is of the view that the output contraction in Q412 and a high margin of error around his Q113 forecast have raised the prospect of a “triple-dip” in the UK (ie. 2008-09, 2011-12 and 2012-13). It seems the UK is at risk of making our shorter business cycle theory look too optimistic!
Watch out for today’s Euroland Industrial Production number with markets expecting a -0.1% mom and a -2.0% yoy decline.
Sterling reacted badly to the IP release and gapped from around 1.491 to a 33-month low of 1.483 against the Dollar before recovering most of this ground to finish the day unchanged at 1.490. Interestingly for the UK, the 10-year bond breakevens also edged higher to 3.347%, a level not seen since September 2008. So there is some risk that inflation expectations are being un-anchored. We've said many times that the UK is a fascinating market to watch as it is ahead of the cycle in many areas in this post Great Recession world. It seems us poor citizens are lab rats!!
Elsewhere, the lack of any major market catalysts basically saw European equities trade sideways/lower throughout most of yesterday. The DAX, FTSEMIB and IBEX finished -0.23%, -0.42% and -0.26%, respectively. Equally soft was also the Stoxx600 Bank Index (-0.42%) which wasn’t helped by news that Commerzbank plans to raise fresh equity to increase its capital by as much as 10%. Away from equity markets, Financials were a major underperformer in European credit with the iTraxx Financial Senior index out by +5bp versus a +2bp move in iTraxx Main. In peripheral sovereigns, Spanish bonds extended further gains with the 10-year yield down nearly 4bps to 4.726% at yesterday’s close – all in all wrapping up a 64bp decline over the last 10 days.
In the US, the S&P 500 (-0.24%) snapped a 7-day rally that drove the index to within 9 points of its all time high, mainly led lower by Financials (-0.63%), IT (-0.57%) and Industrials (-0.54%). The softer tone in equities added some support to Treasuries as the 10-year yield edged 4bps lower to 2.016%. Interestingly in commodities we saw the national average gasoline prices rise on Monday for the first time in 13 days. We highlighted this as one of the interesting indicators to watch in yesterday’s EMR given the ‘tax’ effects of higher energy prices on disposable incomes and the intense focus on the US recovery. As a rule of thumb, a one cent change in gasoline prices reduces annual non-energy consumption by roughly $1billion.
The softer market tone is extending into the Asian session overnight with bourses across Japan, Hong Kong and China down -0.5%, -0.3% and -0.3%, respectively. The JPY has been firmer over the last 24 hours as political opposition emerged towards the nomination of Iwata as the Bank of Japan’s deputy governor. Chinese equities are down for the 5th straight day led by declines in industrial and financial companies.
In other news, the Bundesbank’s Jens Weidmann was on the tape yesterday saying that the Eurozone sovereign crisis is not over and still represents the most significant risk for the German economy - despite recent improvements in financial markets. He added that there was uncertainty about the reform course in Italy and Cyprus and added that the reform course in France seems to have ‘floundered’.
Turning to the latest fiscal debate in the US, House Budget Committee Paul Ryan yesterday released a budget plan which aims to balance the budget in ten years. The plan also includes a partial privatisation of medicare and a repeal of Obama’s health-care law. Specifically his proposal aims to reduce spending from 22.8% of GDP in 2012 to 19.1% of GDP in 2023. The deal was quickly criticised by the President and in the meantime Democrat Senate Budget Committee Chairman Patty Murray is working on a competing plan (to be released today) that would raise taxes by nearly $1 trillion over the next 10 years and spend nearly $100 billion on a new jobs package – both of which are ideas that have been firmly rejected by Republicans (Washington Post). President Obama plans to release his own budget plan in April. It doesn't seem that the sides are getting much closer but it hardly seems to trouble markets at the moment.
In terms of today, US retail sales will likely be the main data point to watch. The market is expecting a +0.5% headline print up from +0.1% in the previous month. That aside, we have business inventories and the monthly budget statement for the month of February. We also have a $21bn 10-year UST auction. In Europe we also get non-farm payrolls from France and IP numbers already discussed. We're also promised warmer weather here in London today! This is good news as a trip to get lunch over the last couple of days has been like mounting a polar expedition. Riding a bike to work has been brutal. Things I’ll do to be able to get into my wedding outfit later this year!
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