It has been prophesied that the electricity price rapture will precede drought apocalypse in Brazil

Alcoa has stopped aluminum production in Brazil in order to divert power from thermal plants used in smelting to the spot electricity market. It is guessed in the FT that it costs Alcoa $18/megawatt hour to produce power which can now be sold for up to $377/megawatt hour in spot market.   70% of Brazil’s electric power is hydro.  Reservoir levels in the state of Sao Paulo are expected to fall below the outflow mains next month. On the positive side, there’s the World Cup.

The luck of the Irish

Ireland's financing costs have fallen below Britain's for the first time since the crisis. Get out your magnifying glasses: 2.656% (Ireland) vs 2.683% (UK) for 10-year bonds.

Steel yourselves: base metals are looking up

ArcelorMittal reported better results than expected. The first quarter loss was $250 million compared to $345 million last year.  The company is now expecting steel demand to rise to 2%-3% this year. They had been expecting a 1.5%-2.5% only a couple of months ago.   At the same time iron ore prices have fallen to a 20-month low of $102.80 a tonne.  Are we seeing a favorable conjunction with price and volume leverage going forward?  Is the economy approaching escape velocity?

Inebriation of the press is the best defense against tyranny

Journalists in India fear a nationwide alcohol ban. Prime ministerial candidate Modi’s home province of Gujarat has banned alcohol since 1960. Would an India-wide ban lead to an exodus of the best journalistic minds?

Everything an Italian prime minister needs to know he learned in kindergarten:

"I learned from my mother that doing good deeds is the best way to elevate oneself," remarked Silvio Berlusconi, beginning his one year community service sentence in a home for elderly dementia patients.

European parliament elections from a UK perspective

Blimey! While the UK’s leaders quail before the rise of the UK Independence Parties, even the most affected average chaps seem indifferent.  The FT reports that there are 300,000 registered and 600,000 unregistered British citizens living in Spain, for a total of 900,000.  Only 16,000 are enrolled to vote in British elections.  Few seem aware of the May 25 election. According to a Brit in Annie's Irish Pub on the Spanish coast, “most people down here just want to get together and have a laugh.". 

Americans exit stage left, pursued by weird tax rules

American citizens are running away. In 2013, 2,999 Americans renounced their citizenship, up 211% from the previous record in 2011. The Foreign Account Tax Compliance Act of 2010 (FATCA), now being phased in, not only makes it unadvisable for foreign banks to accept American taxpayers as customers (UBS, DB, etc. already don’t) even if the Americans in question are living abroad. Not only that, compliance is difficult for the 6 million Americans living abroad; those who can find banking services face onerous reporting requirements and criminal penalties for errors.

As for American corporations, will the US politicians’ opposition to Pfizer’s move to the UK prompt a rush for the exits? Ron Wyden, chairman of the Senate finance committee is threatening retroactive legislation to prevent this. It would certainly be prudent for multinational corporations to get while the getting is good.

The government seems to assume that no one has any legitimate reason to be abroad, nor to do business there. The concept of globalization is foreign to them.