Commodities fall on worries about future demand - BusinessWeek

By SANDY SHORE

Commodity prices fell Thursday after fresh economic reports added to concerns about a weak global economy. Gold was a notable exception as it hit a new record near $1,830 an ounce.

U.S. economic news was discouraging: consumer prices and claims for jobless benefits rose, existing home sales fell and manufacturing weakened in the mid-Atlantic region. Overseas, Japan's exports fell for the fifth straight month in July and European leaders continued to grapple with sovereign debt problems.

Investors sold contracts for everything from oil to wheat and industrial metals as they worried about the potential for future demand if the global economy continues to slow.

Kingsview Financial analyst Matt Zeman said debt issues are key concerns for investors. "Add to that these just extremely weak economic numbers that we're seeing and it spells trouble and that's what we're seeing," he said.

The government said the number of people applying for unemployment benefits rose last week. The Consumer Price Index increased 0.5 percent in July as Americans paid more for necessities like fuel and food.

Gold prices rose for a fourth day. The precious metal is considered a relatively stable asset during economic turmoil. Gold for December delivery rose $28.20 to finish at $1,822 an ounce after hitting $1,829.70 an ounce earlier in the day. That was a record in dollar terms but still below the 1980 peak after adjusting for inflation.

Several analysts have predicted that gold could reach $2,000 an ounce if economic troubles deepen.

Gold's increase benefited silver and platinum, which are traded both as precious and industrial metals.

September silver rose 33.7 cents to end at $40.688 an ounce and October platinum increased $6.90 to $1,847.70 an ounce.

In other trading, September copper fell 6.6 cents to finish at $3.966 a pound and September palladium fell $18.90 to $757 an ounce.

Oil and other energy products dropped. Benchmark West Texas Intermediate crude for September delivery declined $5.20, or 5.9 percent, to finish at $82.38 per barrel on the New York Mercantile Exchange.

In other Nymex trading for September contracts, heating oil fell 8.68 cents to end at $2.8748 per gallon, gasoline futures lost 8.71 cents at $2.7832 per gallon and natural gas fell 4.1 cents to $3.892 per 1,000 cubic feet.

Wheat for September delivery fell 19.75 cents to $7.0775 a bushel, December corn lost 12.5 cents at $7.13 a bushel and November soybeans fell 5.75 cents to $13.61 a bushel.

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Former envoy tells of US worries over Japan's quake response - Los Angeles Times

A pile of vehicles destroyed in the March 11 earthquake and tsunami remains five months later in the Rikuzentakata area in northern Japan. (Kim Kyung-hoon, Reuters / August 14, 2011)

Relations between the U.S. and Japan, already strained over the delayed relocation of an American military base on Okinawa, received no help this week after a retired U.S. envoy publicly criticized Tokyo's initial response to its March nuclear crisis.

Comments by Kevin Maher, a former director of the U.S. State Department's Japan Office, shed light on Washington's behind-the-scenes mindset during the early days of the crisis at the Fukushima Daiichi nuclear power plant.

Photos: Japan earthquake and tsunami

Speaking to reporters in Tokyo, Maher said U.S. officials worried over the lack of leadership shown by Prime Minister Naoto Kan's government after damage from the March 11 earthquake and tsunami that led to meltdowns of several reactors at the coastal atomic plant.

At one point, Maher said the Obama administration considered a worse-case scenario of evacuating tens of thousands of U.S. citizens from the Tokyo metropolitan area.

"There was nobody in charge," Maher said Thursday at a speech at the Foreign Correspondents Club of Japan. "Nobody in the Japanese political system was willing to say 'I'm going to take responsibility and make decisions.'"

The former envoy, who coordinated U.S. assistance to Japan during the crisis, said progress was made only after Tokyo and Washington launched a joint task force. Before that, Maher said, "nothing was taking place at Fukushima Daichi in terms of the government solving the problem."

Kan is due to step down under a flurry of criticism that his government mishandled the crisis. Among alleged miscues were downplaying the radiation risk in Tokyo following the nuclear disaster and allowing officials at Tokyo Electric Power Co., the utility that runs the crippled plant, too much leeway in dealing with the evolving crisis.

Japanese government officials did not respond to Maher's comments.

The outspoken Maher is no stranger to controversy. The day before the March earthquake, he was dismissed for insulting comments he reportedly made in December about Okinawa residents during an off-the-record State Department briefing for U.S. university students.

Fluent in Japanese, with nearly two decades' experience there, Maher was asked to stay on to direct a crisis task force being assembled in Washington that consisted of 100 U.S. nuclear and defense experts.

Reconnaissance from a remotely piloted plane flown over the ailing nuclear plant immediately troubled U.S. officials, especially photos that suggested high temperatures inside the reactor buildings that signaled a possible meltdown, Maher said.

"When you looked at the information we did have, it was very clear to me early on that there had probably been at least one, probably two meltdowns," he told reporters. "We were very worried about what was going to happen to Japan."

Worse, he added, critical information about the unfolding crisis was not being shared among Japanese governmental agencies.

He said the once-considered withdrawal of U.S. troops from Japan as a safety measure during the crisis could have caused a "tremendous negative impact:" on an already complicated U.S.-Japan security alliance.

Maher also denied referring to Okinawa residents as "lazy" and "masters of manipulation and extortion," saying that his comments, first reported by Japan's Kyodo news agency, were misquoted.

Now a consultant, Maher has also released a new Japanese-language book titled, "The Japan That Can't Decide."

He said Japanese government officials eventually came to an even footing in their response to the nuclear disaster.

"There was a point where we told the Japanese government 'Look, you guys have got to take this seriously. This is a real serious situation. The government needs to respond to this,'" Maher said. "And I think the [Japanese] government eventually came to that conclusion itself."

Photos: Japan earthquake and tsunami

john.glionna@latimes.com

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