India Not Buying Gold; European Auto Sales Down; Corrupt Growth in China
Indian Gold Purchases Way Down Even in Traditional Buying Season (Reuters)
Even though this is the time of year in which Indian gold traders traditionally stock up on gold, buyers are not doing so because the price of the barbarous relic is sitting at a three-week high of around $1,280. The result is that Indian gold buying is off by 81 percent in June to just 31.5 tonnes. Part of the reason for this is that the Indian government just raised import duties and stopped consignment imports. The other half of the equation is that there’s simply no demand at this price from the world’s top buyer of gold. State-run trading houses such as MMTC, STC, PEC and banks are waiting for the next series of guidelines in a seemingly ever-changing set of rules governing the purchase of the world’s most popular defensive investment. Perhaps once the U.S. economic position, vis-à-vis the Fed’s continued stimulus, is known, India and the world can have a better idea of what needs to happen investment-wise. Until then, expect gold demand to flag…
European Automotive Sales Another Nail in the Coffin? (CNBC)
Just how many nails can be put into an economic coffin before the job is finished? Europe’s trying to find out. Figures for June car sales were just released, and they show yet another reason for concern that an economic recovery is nowhere in sight. New car sales in the European Union fell to their lowest point since 1996, and there are fears that the bottom hasn’t yet been reached. Europe’s automotive industry regulating body, ACEA, reports that June new car registrations dropped 5.6 percent from a year ago to just 1.175 million cars. May’s figures were even worse, hitting a 20-year low. And don’t look for an improvement any time soon. According to Petter Fuss, senior advisory partner for Ernst & Young’s Global Automotive Centre, “We anticipate the decline in car sales to slow down in the second half… Further, growth in car sales is likely to be flat in 2014.” So, if you’re still investing anywhere near the European auto industry, get ready for another 18 months of bad news.
Making Money the Old, Old Fashioned Way… Sexual Favors (Bloomberg)
With apologies to the venerable Smith Varney television ads featuring John Houseman, GlaxoSmithKline’s Chinese sales unit is really making money the old fashioned way: by trading bribes and sexual favors for deals. At least, that’s according to China’s Public Security Ministry, which claims the global drug maker was able to quadruple the pace of growth in other emerging markets by actively seeking out better deals through the use of bribes and prostitutes. To accomplish this level of growth via illegal means was no small task either, according to a Chinese police probe. The effort took three years and an additional 3,000 Glaxo employees to set up and then execute a series of bribes and sexual liaisons that resulted in about 1 billion pounds of additional business. While Glaxo calls the allegations “shameful” it didn’t exactly refute the claims. Investors in Glaxo might want to consider that non-denial when deciding what to do with shares.