Toyota

• World on track for record food prices 'within a year' due to US drought (Telegraph)
• Foxconn halts production at plant after mass brawl (BBC)
• Germany Losing Patience With Spain as EU Warns on Crisis Effort (Bloomberg)
• Fed Recovery Doubts Spur Investor Bid for Treasuries (Bloomberg)
• Japan protests as Chinese ships enter disputed waters (Reuters)
• In Shark-Infested Waters, Resolve of Two Giants Is Tested (NYT)
• China jails Wang Lijun for 15 years (FT)
• China closes in on Bo Xilai after jailing ex-police chief (Reuters)
• European Leaders Struggle to Overcome Crisis Stalemate (Bloomberg)
• Politicians 1: Austerity 0 - Portugal Gives Ground on Worker Contributions (WSJ)
• Obama Controls Most of His Money as Republicans Have More (Bloomberg)
• Coeure Says Not Clear That Further ECB Interest-Rate Cut Needed (Bloomberg)
• France Seeks Labour Overhaul (WSJ)

Global gold production remains at its level of the late '90s, even though prices have risen to over $1,700 per ounce from $252 per ounce in 1999 or roughly 16% per annum in dollar terms. Only Rio Tinto and Ivanhoe's Oyu Tolgoi mine in Mongolia stand out as a major new gold mines expected to begin production in the near future. Bulls note that global production has remained impervious to the price of gold. This may continue to be the case due to the increasingly obvious geological constraints being seen in the gold mining sector. Resource nationalism is beginning to become an important factor again. This will also almost certainly affect supply at a time when demand is increasing from people throughout the world and many hedge funds, pension funds and central banks’ due to geopolitical, systemic and monetary risks. The lesson of QE is that fiat currencies increasingly grow on trees. Gold does not.  This is the primary reason that gold will continue to protect investors in the coming months.

When you have central planners printing inverse-wealth (because money printing dilution by definition means less wealth for everyone), who needs that cornerstone of old school economics: trade. Certainly not Japan (which has been diluting its futures to prosperity for the past 30 years and somehow failing each and every time) and China, both of which are now starting to feel the consequences of the collapse in political relations as a result of the senseless spat of the Senkaku Islands (recorded in its full visual glory here). As the NYT reports, "major Japanese companies closed factories in China and urged expatriate workers to stay indoors Monday, after angry protests flared over a territorial dispute, which threatened to hurt trade ties between the two biggest Asian economies." What does the idiotic escalation in unprovoked Japanese tensions over a rock in the East China Sea (note: not West Japan Sea) for the bottom line of Japan? In a word: Lots.

Over the past 48 hours we have written much, describing the perfectly expected surge in nationalist fervor and anti-Japanese sentiment, as the Senkaku Islands Snafu hits its boiling point (a Japan whose GDP is now declining in real terms, whose economy has been crippled by years of deflation, whose infrastructure is impaired due to anti-nuclear power sentiment, and one which generally can not afford an all out diplomatic, political and economic conflict with China, and may thus ask itself: why escalate and just who prompted it do so now?). Instead we'll let the pictures do the talking.

A courageous act in face of the punishment the Fed inflicts on them. But it doesn't bode well for the economy.

Financial magazine Euromoney, which in addition to being a subscription-based publication appears to also rely on bank advertising, has just held its 2012 Awards for Excellence dinner event. And in the "you can't make this up" category we have Barclays winning the Best Global Debt House, Best Investment Bank, And Best Global Flow House Of The Year Awards. Specifically we learn that "the bank’s commitment to the US is exemplified by the addition of another global senior manager to the country – Tom Kalaris is now going to be splitting his time between New York and London as executive chairman of the Americas as well as overseeing wealth management. Jerry del Missier, who has overseen the corporate and investment bank through its Lehman integration and was recently appointed COO of the Barclays group, says the bank is well positioned. "We came out of the crisis in a stronger strategic position and that has allowed us to continue to win market share and build our franchise. Keep in mind that the US is the largest investment banking, wealth management, credit card and investment management market in the world, and in terms of fee share will remain the most dynamic economy in the world for many years. As a strong global, universal bank operating in a competitive environment that is undergoing significant retrenchment, we like our position." That said, with the Chairman, CEO and COO all now fired, just who was it who accepted the various award: the firm's LIBOR setting team? And if so, were they drinking Bollinger at the dinner?

• Most Germans Reject Ceding Sovereignty to EU, Stern Poll Shows (Bloomberg)
• How Stockton went broke: A 15-year spending binge (Reuters)
• Manchester United Shoots for $100 Million IPO (WSJ)... with 4x leverage and Jefferies as underwriter
• Iran says can destroy U.S. bases "minutes after attack" (Reuters)
• Poison claims spark call for Arafat exhumation  (FT)
• Diamond Would Be Catch for Investment, Private Equity (Bloomberg)
• Investors may shun big Libor lawsuit and go it alone (Reuters)
• New Particle Found, Consistent With Higgs Boson (WSJ)
• Chinese riot police clash with protesters  (FT)
• Euro-Area June Manufacturing, Services Output Contracts (Bloomberg)
• Utilities Struggle to Restore Power in East (WSJ)
• Dark economic clouds gather anew over Obama campaign (Reuters)

For how much longer can they try to hide it?

All you need to read.

Rampant overproduction, channel stuffing, and an inventory glut: the China auto bubble is hissing.

All yopu need to read.

Investing in an uncompetitive company in the ugly EU auto market to bail out its own failing subsidiary.

• With a 2 Year delay, both FT and WSJ start covering the shadow banking system. For our ongoing coverage for the past 2.5 years see here.
• Trouble in shipping turns ocean into scrapheap (Telegraph)
• First-Quarter Home Prices Down 20.7% in Capital (China Daily)
• Bernanke Says Banks Need Bigger Capital Buffer (Reuters)
• Monti’s Overhaul Can’t Stop Pain From Spain: Euro Credit (Bloomberg)
• Spain Confronts Crisis Threat as Rajoy Seeks Deficit Cuts (Bloomberg)
• Japan’s Noda Announces Anti-Deflation Talks as BOJ Sets Policy (Bloomberg)
• White House makes case for Buffett Rule (CNN)
• Cameron to Make Historic Myanmar Trip (FT)
• 'Time for Closer Ties' With India (China Daily)

All you need to read.

As Iran tensions mount, even the US Military needs a break and where better than The Hamptons to practice desert-driving skills? As SouthamptonPatch notes, a military spokesman said M1117s that drove through Southampton, East Hampton and Southold were not on the East End for a funeral, as previously reported. Perhaps its nothing more suspicious than a cabal of FX traders and hedge fund managers building their own fortification to protect their champagne but we must all appreciate them filling up with gas and helping our economy recover (credit or debit?).