So VT's shipbuilding division, once something of an embarrassment, has actually generated a £5.4m profit in the last six months, up four-fifths on the same period a year ago. It has been making the bow sections (about one-third of the ship) of the new Type 45 destroyers for the Royal Navy. Call it an old-fashioned credit squeeze if you like.j.warner independent.co.uk. It is possible to make decent money out of shipbuilding in the UK. VT Group, still better known as Vosper Thornycroft, moved last year from its creaking old yards in Southampton to state-of-the-art new facilities in Portsmouth, and has been winning new orders and working more productively there ever since. All over the shop, credit card limits are being quietly capped or reduced.
This is one of the major unwritten reasons why consumer spending is so depressed. On top of this the interest rate charged to new borrowers once this three-month revised deal expires is being increased by 3 per cent from 12.9 per cent APR to 15.9 per cent APR.This hardly counts as an earth-shattering tightening, but it does mean that from being top of the Moneyfacts bestbuy table for credit cards, Halifax now falls out altogether. The backdrop is that lenders are becoming more worried about bad debt experience, as well they might be with about 6 per cent of consumers thought to have more unsecured credit outstanding than their annual salaries. Yet it is not altogether implausible that the whole thing was orchestrated, as China is now far and away the biggest consumer of commodity metals in the world. The country plainly has a big interest in driving prices lower.Even Bond might struggle to get to the bottom of this one.Easy credit is being slowly withdrawnIt can hardly yet be called a credit squeeze, but the big lenders are steadily cutting back on the easy money environment of a year ago.
It is not known for sure how much copper the Strategic Reserve Bureau holds, but it may be rather less than the estimated 200,000 tonnes Mr Liu has sold.Was Mr Liu authorised to conduct this shorting strategy, or did he do it off his own back? Or was he just an outright conman who has now disappeared into the vastness of the Chinese hinterland? The Strategic Reserve Bureau says the trades were nothing to do with them. In the latest sign of it, Halifax/Bank of Scotland has announced that with effect from 14 November, it will cut the 0 per cent term on their "One" credit card for purchases from 12 months down to only three months. Unfortunately for him, the price continued to rocket, reaching an all-time high on Monday, and leaving either Mr Liu, his employers, or his counter parties seriously out of pocket.Shorting is the sale of stock you haven't got for delivery at some stage in the future. The hope is that the price will then fall so that it can be bought against delivery at a lower price than it was sold for. This is Liu Qibing, who, despite some initial confusion, appears to be employed by China's State Reserve Bureau.Mr Liu's apparent intention was to drive the price down, not up, for he had taken out short positions through the London Metal Exchange over up to 200,000 tonnes of copper, or approximately three times the LME's entire stock of warehoused copper.
He wouldn't recognise the latest addition to the gallery of rogue commodity traders either. Most attempts to manipulate the commodity markets, fictional and real, involve driving the price up, not down. He might even have realised his ill-gotten gains but for the fact that the New York Metals Market changed the rules and bankrupted him.Sumitomo's chief copper trader, Yasuo Hamanaka, successfully squeezed the copper market over a 10-year period, only he had no authorisation for his trades and was eventually jailed. In the movie Goldfinger the plan is to detonate a nuclear device inside Fort Knox, thus rendering its contents radioactive for generations to come and hugely increasing the value of any gold held outside, of which Goldfinger owns the lion's share.Back in the real world, the Texan billionaire Nelson Bunker Hunt tried and largely succeeded in cornering the silver market - at one stage he accounted for more than a half of the world's deliverable supplies - and the price soared. Unfortunately for him, patience is a virtue almost unheard of in capital markets.
