Making Unique Observations in a Very Cluttered World

Wednesday, 10 February 2010

Terrifying elevator ordeal at Burj Khalifa tower, the world’s tallest building -

Reading - Terrifying elevator ordeal at Burj Khalifa tower, the world’s tallest building -

Terrified passengers were left stranded between floors in the world’s tallest building after a lift broke as they were descending in the Burj Khalifa tower in Dubai.

Visitors queueing to descend from the observation deck on the 124th floor of the recently opened 828-metre (2,717ft) tower heard a crash and the sound of breaking glass from the lift shaft. Dust then billowed back into the room through the small gaps in the lift shaft doors.

The 15 passengers inside the lift were left stranded for 45 minutes before they were rescued by staff who dropped a ladder into the shaft and helped them to climb out to the observation deck. About 60 tourists who had heard the incident were left on the deck without explanation as security guards said that nothing was wrong. They were eventually joined by hysterical and dazed passengers from a second lift, who had been descending the tower when the incident occurred in the adjacent shaft. Their lift also stopped but was later safely returned to the observation deck, which was eventually evacuated via a service lift.

One visitor said that the initial lift failure sounded like “a small explosion”. It is still not clear whether anyone was injured. The Burj, which opened on January 4 with an extravagant firework display, was closed on Sunday after the incident.

Public access to the observation deck has been halted indefinitely, leaving hundreds of disgruntled tourists queueing for refunds for what should have been a highlight of their visit to the Gulf state. Emaar, the building’s developer, declined to comment on the incident but initially blamed its closure on “unexpectedly high traffic” in the tower. It later added that unspecified electrical problems could be to blame.

The lifts were promoted as one of the highlights of the tower. The fastest public lifts in the world, they reach more than 25mph (40k/ph), climbing to the top in about a minute. The observation deck was the only part of the tower to be opened so far. Saturday’s incident throws fresh doubt on the opening of other parts of the building.

The launch of the world’s tallest building was intended to be the crowning achievement of this small city-state, drawing a line under its financial difficulties. Instead it highlighted the emirate’s dependence on its neighbour’s support. It was renamed the Burj Khalifa instead of the Burj Dubai, in honour of Sheikh Khalifa bin Zayed bin Sultan al-Nahyan, the ruler of Abu Dhabi.

Read more -http://www.timesonline.co.uk/tol/news/world/middle_east/article7021145.ece

The Dumping Begins: Chinese Reserve Managers Notified That Any Non-USG Guaranteed Securities Must Be Divested

Reading - The Dumping Begins: Chinese Reserve Managers Notified That Any Non-USG Guaranteed Securities Must Be Divested

It appears that this time China's posturing is for real. Following up on our earlier post that Chinese military officials want to "punish" America by selling Treasuries, Asia Times Online is reporting that an explicit directive by the Chinese government has notified reserve managers to sell all risky US assets, including asset backed and corporates, and just hold on to explicitly guaranteed Treasuries and Agency debt. And from following TIC data we know that China's enthusiasm for MBS/Agencies over the past year has been matched solely by that of one Bill Gross.

From Asia Times:

Dollar-denominated risk assets, including asset-backed securities and corporates, are no longer wanted at the State Administration of Foreign Exchange (SAFE), nor at China’s large commercial banks. The Chinese government has ordered its reserve managers to divest itself of riskier securities and hold only Treasuries and US agency debt with an implicit or explicit government guarantee. This already has been communicated to American securities dealers, according to market participants with direct knowledge of the events.

It is not clear whether China’s motive is simple risk aversion in the wake of a sharp widening of corporate and mortgage spreads during the past two weeks, or whether there also is a political dimension. With the expected termination of the Federal Reserve’s special facility to purchase mortgage-backed securities next month, some asset-backed spreads already have blown out, and the Chinese institutions may simply be trying to get out of the way of a widening. There is some speculation that China’s action has to do with the recent deterioration of US-Chinese relations over arm sales to Taiwan and other issues. That would be an unusual action for the Chinese to take–Beijing does not mix investment and strategic policy–and would be hard to substantiate in any event.

Furthermore, demonstrating just how seriously China is approaching a populist-driven adversarial stance with the US, was earlier speculation that instead of unpegging its currency (a move much desired by the US administration in its goal to further weaken the dollar and make China less competitive in the export market), China would reduce its trade balance not by the traditional way of currency inflation, but by the economic textbook footnote approach of raising salaries.

Higher labor costs would cut Chinese export competitiveness while boosting domestic spending power and sustaining economic growth, according to the bank. Premier Wen Jiabao’s government has been pressed by U.S. and European officials to end a 19- month yuan peg to the dollar to help diminish trade and investment imbalances that contributed to the credit crisis.

“Wage increases are a better option because they largely benefit Chinese workers,” Tao Dong, a Credit Suisse economist in Hong Kong who has covered the Chinese and Asian economies for more than 15 years, said in an interview yesterday. “Currency appreciation will only result in Chinese exporters losing out to competitors in countries such as Malaysia and Mexico.”

The strategy may limit gains in the yuan to 3 percent this year, according to Tao. This month’s 13 percent increase in minimum wage in eastern China’s Jiangsu province indicates that higher pay will play an important role in officials’ efforts to rebalance growth in the fastest-growing major economy, Tao said.

The wage decision “argues against a large one-off yuan revaluation,” Ben Simpfendorfer, an economist with Royal Bank of Scotland in Hong Kong, wrote in a note this week.

One thing is certain - China will now focus on doing precisely the opposite of what America would urge Chinese authorities to do, in order to establish itself as the focal point of negotiating leverage and increasingly humiliate the Obama regime. If this involves selling USTs or corporates (both fixed income and equities) so be it. This is further confirmed by carefully worded disclosure in today's copy of China Securities Journal:

The China Securities Journal, a government-backed daily, accused the U.S. in a tough-worded front page editorial of playing the "exchange rate card."

It said that, just as China didn't interfere with Federal Reserve purchases of U.S. Treasuries, "the U.S. has no right to interfere in China's exchange rate policy."

"Whether or not to appreciate is our own business," the newspaper said.

"Whether it will appreciate, when and by how much is an integral part of China's monetary policy."

It is not clear when the asset divestiture directive takes place or if it is already being enforced. Juding by the afterhours action in futures and the currency markets, some dumping may already be taking place. Alternatively, we now know just who it is that sell into every rally (yes, even in this market, every buyer is matched with a seller).

Magnitude 4.3 Quake Wakes Up Chicago Area -

Reading - Magnitude 4.3 Quake Wakes Up Chicago Area -

A rare moderate earthquake struck northern Illinois Wednesday morning, waking up residents in the Chicago area.

The 4.3 magnitude quake, centered 48 miles west of Chicago near the city of Sycamore, hit at 4 a.m. local time at a depth of about 3 miles, the USGS reported.

Geophysicist Amy Vaughn told the Chicago Sun Times the earthquake was "very widely felt" and the USGS phone lines were flooded with calls from residents asking about the shaking.

"It's mostly people who said 'we woke up and we thought we were going crazy,'" Vaughn said. "Mostly it’s rattling people awake."

Kane County sheriff's spokesman Lt. Pat Gengler told the Associated Press dispatchers have been flooded with calls from startled residents, though no injuries or damage have been reported.

Gengler said several residential and business alarms were triggered, but deputies haven't been called for assistance.

Residents reported being shaken out of bed and finding books and tools scattered across the floor after falling from shelves.

Walter Mockus of St. Charles told the Chicago Tribune. "The whole house shook. The chimes that hang were all ringing. It was so loud, I thought a plane had gone down."

On Twitter, user RosaMCabrera wrote: "Earthquake woke us! In ravenswood it was a second or so."

And Terryamerson said: "Thought it was the biggest snow plow ever that woke me up this morning. No it was 4.3 earthquake!"

Early reports suggest the quake was felt across three states: Illinois, Indiana and Wisconsin.

Read more -http://www.foxnews.com/story/0,2933,585337,00.html