Bloomberg.com: Top Worldwide: "May 31 (Bloomberg) -- Confidence in Europe's economy unexpectedly rose to the highest in five years in May as German retail sales jumped and unemployment fell, cementing the case for higher interest rates next week. Bonds fell.
A European Union index of economic sentiment in households and companies in the dozen euro nations climbed to 106.7, up from 105.7 last month and the highest since April 2001. Retail sales in Germany, the continent's largest economy, rose 2.8 percent in April after dropping in the two previous months. Both reports were stronger than forecast. "
31 May 2006
Copper may rise up to 50% on fund demand, Sucden says - Metals News - Metals Place
Copper may rise up to 50% on fund demand, Sucden says - Metals News - Metals Place: "Copper prices in London may increase by as much as 50 percent in the next year as global demand from hedge funds and cablemakers outstrips supply, according to Sucden U.K. Plc, which trades on the London Metal Exchange.
Prices of the metal have surged 87 percent this year, and reached a record $8,800 a ton on May 11, as hedge and pension funds poured money into commodities in pursuit of higher returns than those offered by stocks and bonds. Global supply may not rise quickly enough to meet demand, Jeremy Goldwyn, global head of industrial commodities at Sucden, said in Shanghai yesterday.
'Many pension and mutual funds see commodities as a natural home for three to five percent of their money,' Goldwyn told a futures conference. 'They have a massive influence on the price and use commodities as a hedge for their traditional investments' such as stocks and bonds. Sucden is one of 11 companies that trade on the floor of the London Metal Exchange, the world's biggest metals bourse.
Economic growth in the U.S. and Europe meant the high copper price hasn't eroded demand, he said. Cumerio, the copper producer spun off by Belgian metals producer Umicore SA, said last month first quarter deliveries of wire rods and shapes rose 10 percent in the first quarter.
'We don't feel there's a great deal of demand destruction' from the high prices, while copper miners haven't been able to increase output because of problems such as labor disputes, and a shortage of skilled engineers and mining equipment, Goldwyn said.
Increasing prices
'We certainly would not be surprised to see copper at $9,000, $10,000 or $12,000 in the next six, nine or 12 months,' he said. Index-linked funds and other passive investors had placed $80 billion to"
Prices of the metal have surged 87 percent this year, and reached a record $8,800 a ton on May 11, as hedge and pension funds poured money into commodities in pursuit of higher returns than those offered by stocks and bonds. Global supply may not rise quickly enough to meet demand, Jeremy Goldwyn, global head of industrial commodities at Sucden, said in Shanghai yesterday.
'Many pension and mutual funds see commodities as a natural home for three to five percent of their money,' Goldwyn told a futures conference. 'They have a massive influence on the price and use commodities as a hedge for their traditional investments' such as stocks and bonds. Sucden is one of 11 companies that trade on the floor of the London Metal Exchange, the world's biggest metals bourse.
Economic growth in the U.S. and Europe meant the high copper price hasn't eroded demand, he said. Cumerio, the copper producer spun off by Belgian metals producer Umicore SA, said last month first quarter deliveries of wire rods and shapes rose 10 percent in the first quarter.
'We don't feel there's a great deal of demand destruction' from the high prices, while copper miners haven't been able to increase output because of problems such as labor disputes, and a shortage of skilled engineers and mining equipment, Goldwyn said.
Increasing prices
'We certainly would not be surprised to see copper at $9,000, $10,000 or $12,000 in the next six, nine or 12 months,' he said. Index-linked funds and other passive investors had placed $80 billion to"
Is It Tableware or a Leading Indicator? - New York Times
Is It Tableware or a Leading Indicator? - New York Times: "But to a cadre of economists who use the price of gold as their crystal ball, those brides and grooms should not be the main object of our sympathy. The United States economy should be.
The boom in gold and silver, these economists say, is a sign that this country is finally going to pay for years of easy money, mounting debt, cheap Asian imports and trillion-dollar budget deficits. Welcome to your new job, Henry Paulson.
GOLD and silver have provided a reality check for profligate governments as far back as ancient Rome. Starting with the little-loved emperor Nero, Roman rulers began to use less and less metallic content in their coins so they could mint more money, as Peter L. Bernstein, the longtime Wall Street consultant, wrote in his book 'The Power of Gold' (Wiley, 2000).
When the Roman people figured out what was going on, the value of the coins began dropping rapidly. In one 44-year period, prices of everyday Roman items rose by a factor of 20. Only when the emperor Constantine issued a nearly pure new coin called the solidus did inflation come under control."
The boom in gold and silver, these economists say, is a sign that this country is finally going to pay for years of easy money, mounting debt, cheap Asian imports and trillion-dollar budget deficits. Welcome to your new job, Henry Paulson.
GOLD and silver have provided a reality check for profligate governments as far back as ancient Rome. Starting with the little-loved emperor Nero, Roman rulers began to use less and less metallic content in their coins so they could mint more money, as Peter L. Bernstein, the longtime Wall Street consultant, wrote in his book 'The Power of Gold' (Wiley, 2000).
When the Roman people figured out what was going on, the value of the coins began dropping rapidly. In one 44-year period, prices of everyday Roman items rose by a factor of 20. Only when the emperor Constantine issued a nearly pure new coin called the solidus did inflation come under control."
Meltdown May for Hedgefunds
: "BOSTON, May 29 (Reuters) - For hedge funds, May has been a miserable month that may mark the end of earning easy money and the beginning of tough trading conditions, managers, investors and industry analysts said.
Nothing has gone smoothly in the $1.2 trillion hedge fund industry since a sell-off in precious metals prices spilled on emerging markets and soon affected developed markets. In the absence of a real catalyst, analysts blame fears of inflation and rising rates for the sudden drop.
Many of the world's roughly 8,000 funds lost between 3 and 6 percent in the first three weeks of May with some having seen swings of 10 percent or more, investors and researchers said.
'People have given back a lot of profits and the rest of the year will be much more difficult to trade, with people becoming more sensitive to risk and making fewer bold moves,' said Philippe Bonnefoy, who runs fund of funds Cedar Partners.
Now hedge fund managers, who earned strong returns by simply being long on equities, will have to make savvier stock picks, and any bets on commodities may have to be a little bit quicker with more moves in and out, industry analysts said.
That may be a shock for the legions of managers who earned more money in the first four months of 2006 than all of 2005 simply by jumping on trends that were too good to pass up.
Several hedge fund managers said many in the lightly regulated industry held onto metals bets far longer than they should have and may now face the consequences as this month's heavy losses could trigger another round of industry closings.
'The weaker players could get knocked out and that would be a good thing, said Aaron Smith, managing director of Superfund Asset Management, wh"
Nothing has gone smoothly in the $1.2 trillion hedge fund industry since a sell-off in precious metals prices spilled on emerging markets and soon affected developed markets. In the absence of a real catalyst, analysts blame fears of inflation and rising rates for the sudden drop.
Many of the world's roughly 8,000 funds lost between 3 and 6 percent in the first three weeks of May with some having seen swings of 10 percent or more, investors and researchers said.
'People have given back a lot of profits and the rest of the year will be much more difficult to trade, with people becoming more sensitive to risk and making fewer bold moves,' said Philippe Bonnefoy, who runs fund of funds Cedar Partners.
Now hedge fund managers, who earned strong returns by simply being long on equities, will have to make savvier stock picks, and any bets on commodities may have to be a little bit quicker with more moves in and out, industry analysts said.
That may be a shock for the legions of managers who earned more money in the first four months of 2006 than all of 2005 simply by jumping on trends that were too good to pass up.
Several hedge fund managers said many in the lightly regulated industry held onto metals bets far longer than they should have and may now face the consequences as this month's heavy losses could trigger another round of industry closings.
'The weaker players could get knocked out and that would be a good thing, said Aaron Smith, managing director of Superfund Asset Management, wh"
Ronald Rosen _ Esoteric Gold Price Predictions!
Kitco - Contributed Commentaries - Ronald Rosen: "The actual highs and lows are indicated on the chart using # to indicate when they arrived. The numbers in the circle at the edge of the chart, top and bottom, indicate when the highs and lows are due. The next Delta medium turning point for gold is a high due July 12. The range for arrival is between June 28th and August 9th. In a strong bull move the highs tend to arrive late. You can see that there was a very powerful move up to the recent # 1 high. The reverse is true for powerful down moves. The colored vertical lines are the “Laser” light that Jim Sloman discovered. They produced the Holographic effect that allows us to know when the highs and lows will occur. The number of turning points is different for different groups of commodities and stocks. The four vertical colored lines repeat ad infinitum. The number of turning points between the vertical colored lines remains constant for each commodity, stock group, and index as far into the future as you want to go. There always are the same number of turning points between the colored vertical lines. The Delta turning points are truly an amazing discovery. They are not perfect accuracy. They give us the perfect order of highs and lows within an approximate period of time. The period of time has been researched using a massive computer study and going back 200 years."
Apples to Elephants
Hussman Funds - Weekly Market Comment: May 30, 2006 - Apples to Elephants: "Among the frequent bullish arguments from analysts these days is the notion that stock P/E ratios are fair or even low – an assertion that is often made so straight-faced that you get the definite impression that the analysts actually believe it. And why not? It's well known that the historical average P/E ratio is about 15, so why not compare S&P 500 valuations to that benchmark?
Unfortunately most analysts base their P/E measures on “forward operating earnings.” 'Forward' meaning next year or even two years out. 'Operating earnings' meaning a measure not even defined under generally accepted accounting principles – GAAP – that typically excludes anything that reduces the predictability of earnings, and certainly excludes “extraordinary losses” even if those losses are taken routinely. The resulting, whitewashed earnings measure can easily be 25% or more above trailing net earnings (the prior-year's earnings as defined under generally accepted accounting principles).
As Anne Casscells and Cliff Asness pointed out a couple of years ago, it's absurd to compare P/E's based on “forward operating earnings” with a historical average P/E based on “trailing net earnings.” Asness calculated that the historical average P/E on forward operating earnings is closer to 12, and is probably lower since the average includes the late-90's bubble, but excludes valuations prior to the late 1970's (which is the earliest the data is available). Given that my own measure – price/peak earnings – has averaged less than 10 when S&P 500 earnings have been close to the top of their long-term 6% peak-to-peak growth channel, my guess is that the appropriate norm for forward operating P"
Unfortunately most analysts base their P/E measures on “forward operating earnings.” 'Forward' meaning next year or even two years out. 'Operating earnings' meaning a measure not even defined under generally accepted accounting principles – GAAP – that typically excludes anything that reduces the predictability of earnings, and certainly excludes “extraordinary losses” even if those losses are taken routinely. The resulting, whitewashed earnings measure can easily be 25% or more above trailing net earnings (the prior-year's earnings as defined under generally accepted accounting principles).
As Anne Casscells and Cliff Asness pointed out a couple of years ago, it's absurd to compare P/E's based on “forward operating earnings” with a historical average P/E based on “trailing net earnings.” Asness calculated that the historical average P/E on forward operating earnings is closer to 12, and is probably lower since the average includes the late-90's bubble, but excludes valuations prior to the late 1970's (which is the earliest the data is available). Given that my own measure – price/peak earnings – has averaged less than 10 when S&P 500 earnings have been close to the top of their long-term 6% peak-to-peak growth channel, my guess is that the appropriate norm for forward operating P"
Market Observations: Building the right shoulder.
Market Observations: Building the right shoulder.: "This is turning out to be a terrific 6.5 month Head and Shoulders top. This is a major top formation and it has the abiliity to produce the next bear market. The right shoulder has started building. The sell off today is within the normal process of building that pattern.
I think it will take some more consolidation to build some serious momentum to the downside, therefore I am looking for another attempt to rally as soon as tomorrow. The high of last Friday at 1281 will most likely get retested and maybe will be marginally broken. This process can last anywhere from 4-6 weeks and we are chewing into the first week so far. The window of opportunity is closing for the longs."
I think it will take some more consolidation to build some serious momentum to the downside, therefore I am looking for another attempt to rally as soon as tomorrow. The high of last Friday at 1281 will most likely get retested and maybe will be marginally broken. This process can last anywhere from 4-6 weeks and we are chewing into the first week so far. The window of opportunity is closing for the longs."
Colonial's Shields Holds BHP Amid Selloff on China
Bloomberg.com: Australia & New Zealand: "May 31 (Bloomberg) -- Simon Shields, Australia's biggest fund manager, isn't concerned by this month's global sell-off in mining shares. He's betting it was a blip in a multi-decade rally sparked by China's industrialization.
BHP Billiton and Rio Tinto Group, the world's biggest and third-biggest mining companies, tumbled more than 10 percent in the week after reaching records on May 11 and 12 as commodities posted their biggest declines in 25 years. For Shields, the plunge made the two mining stocks even more attractive.
``BHP and Rio are extremely undervalued by the market,'' said Shields, 40, who manages $10 billion at Colonial First State in Sydney, in an interview on May 22. ``What we're seeing now is a long term upswing that could last 20 to 30 years. We're buying shares that are unashamedly geared toward a tectonic shift in global growth.'' "
BHP Billiton and Rio Tinto Group, the world's biggest and third-biggest mining companies, tumbled more than 10 percent in the week after reaching records on May 11 and 12 as commodities posted their biggest declines in 25 years. For Shields, the plunge made the two mining stocks even more attractive.
``BHP and Rio are extremely undervalued by the market,'' said Shields, 40, who manages $10 billion at Colonial First State in Sydney, in an interview on May 22. ``What we're seeing now is a long term upswing that could last 20 to 30 years. We're buying shares that are unashamedly geared toward a tectonic shift in global growth.'' "
30 May 2006
new portal for stock blogs
Home | invesLogic: "
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Dongtan Eco-city, Shanghai, China
Dongtan Eco-city | East Asia | Arup: "We are working as a strategic partner with Shanghai Industrial Investment Corporation (SIIC) on the integrated masterplanning for the world’s first sustainable city.
At three quarters the size of Manhattan and located on the third largest island in China at the mouth of the Yangtse river, Dongtan will be developed on 630 hectares of land as a sustainable city to attract a range of commercial and leisure investments.
Ecologically sensitive design will be a key element of the masterplan. The site is mostly agricultural land adjacent to a huge wetland of global importance. This will be a significant opportunity to apply our integrated sustainability and urban planning expertise to the benefit of the eco-city.
Dongtan Eco-city Location Map
Priority projects for phase 1 include capturing and purifying water, waste management recycling, reducing landfills that damage the environment, and creating combined heat and power systems, linked to the use of renewables, that will provide the technology to source clean and reliable energy."
At three quarters the size of Manhattan and located on the third largest island in China at the mouth of the Yangtse river, Dongtan will be developed on 630 hectares of land as a sustainable city to attract a range of commercial and leisure investments.
Ecologically sensitive design will be a key element of the masterplan. The site is mostly agricultural land adjacent to a huge wetland of global importance. This will be a significant opportunity to apply our integrated sustainability and urban planning expertise to the benefit of the eco-city.
Dongtan Eco-city Location Map
Priority projects for phase 1 include capturing and purifying water, waste management recycling, reducing landfills that damage the environment, and creating combined heat and power systems, linked to the use of renewables, that will provide the technology to source clean and reliable energy."
How to Buy a $450K Home for $750K
charles hugh smith-How to Buy a $450K Home for $750K: " recently came across this ad in a major American newspaper and was struck by the 'truth in advertising' which was apparently imposed on a typical real estate pitch aimed at the naive and greedy (as opposed to the experienced and greedy).
The ad went on to list 'The cutting-edge secrets to buying real estate at 30% to 50% above market value:' "
The ad went on to list 'The cutting-edge secrets to buying real estate at 30% to 50% above market value:' "
Asian Development Bank sounds alarm on dollar - Business - International Herald Tribune
Asian Development Bank sounds alarm on dollar - Business - International Herald Tribune: "Asian countries need to prepare for a possible sharp fall in the dollar and should allow their currencies to appreciate collectively if that happens, a senior Asian Development Bank official said Tuesday.
'Any shock hitting the U.S. economy or the global market may change investors' perceptions, given the existing global current account imbalance,' Masahiro Kawai, the bank's head of regional economic integration, said at a news conference.
'Our suggestion to Asian countries is, don't take this continuous financing of the U.S. current account deficit as given. If something happens, then East Asian economies have to be prepared.'
Kawai said the chances of a rapid fall in the dollar were still small, but it could cause a significant turmoil in Asia if it happened.
'If the U.S. dollar goes down in the future, it would be best for East Asian countries to allow appreciation collectively,' so that the costs of adjustment could be divided among them, he said.
'I don't think the possibility is high,' Kawai said of a dollar plunge, 'but it is like avian flu: the possibility of avian flu spreading all over Asia or the world is limited, but once it spreads, it would have tremendous impact.'
Kawai said that by East Asia, he meant emerging East Asian markets, excluding Japan.
Kawai said the Manila-based development bank's planned establishment of an Asian currency unit, made up of a basket of Asian currencies, would help monitor the collective path of regional currencies in relation to the dollar.
The benchmark has been delayed by disputes over inclusion of the Taiwan dollar.
But Kawai played down suggestions that an Asian currency unit, or"
'Any shock hitting the U.S. economy or the global market may change investors' perceptions, given the existing global current account imbalance,' Masahiro Kawai, the bank's head of regional economic integration, said at a news conference.
'Our suggestion to Asian countries is, don't take this continuous financing of the U.S. current account deficit as given. If something happens, then East Asian economies have to be prepared.'
Kawai said the chances of a rapid fall in the dollar were still small, but it could cause a significant turmoil in Asia if it happened.
'If the U.S. dollar goes down in the future, it would be best for East Asian countries to allow appreciation collectively,' so that the costs of adjustment could be divided among them, he said.
'I don't think the possibility is high,' Kawai said of a dollar plunge, 'but it is like avian flu: the possibility of avian flu spreading all over Asia or the world is limited, but once it spreads, it would have tremendous impact.'
Kawai said that by East Asia, he meant emerging East Asian markets, excluding Japan.
Kawai said the Manila-based development bank's planned establishment of an Asian currency unit, made up of a basket of Asian currencies, would help monitor the collective path of regional currencies in relation to the dollar.
The benchmark has been delayed by disputes over inclusion of the Taiwan dollar.
But Kawai played down suggestions that an Asian currency unit, or"
''Soaring Commodity Prices Point Toward Dollar Devaluation''
PINR - Soaring Commodity Prices Point Toward Dollar Devaluation: "In late 2005, the Commodity Research Bureau's broad commodity price index, known as the C.R.B. Index, quietly surpassed record high levels set in the early 1980s. By the third week of May 2006, the C.R.B. Index gained another 12 percent. Behind this year's rise in the C.R.B. Index have been unprecedented price rallies of individual commodities. In the first five months of 2006, crude oil prices have increased by a mere 14 percent followed by gains in corn and wheat of about 10 percent. Price gains for other commodities have far outpaced the gains of oil and grains.
Zinc prices have doubled in the past five months, copper prices are up 80 percent, silver has risen by 60 percent and palladium, tin, gold, aluminum and platinum have gained 50 percent, 40 percent, 39 percent, 36 percent and 35 percent, respectively. Prices for other commodities including lead, iron and scrap iron have followed a similar path this year. While these commodities have vastly varied uses from industrial to food production, they all have one common feature -- they are denominated and traded internationally in U.S. dollars. "
Zinc prices have doubled in the past five months, copper prices are up 80 percent, silver has risen by 60 percent and palladium, tin, gold, aluminum and platinum have gained 50 percent, 40 percent, 39 percent, 36 percent and 35 percent, respectively. Prices for other commodities including lead, iron and scrap iron have followed a similar path this year. While these commodities have vastly varied uses from industrial to food production, they all have one common feature -- they are denominated and traded internationally in U.S. dollars. "
Bears in the woods
The markets and the world economy | Bears in the woods | Economist.com: "IF YOU meet a bear in the woods, try not to panic or scream; on no account should you turn your back and run. As markets around the world have turned grizzly over the past two weeks, some investors seem to have forgotten the old hikers' maxim. After three years of big gains, many stockmarkets have tumbled by 10% or more in less than ten days. The loudest growls have echoed around emerging markets and commodities. Europe has surrendered most of this year's gains. Americans have so far escaped lightly, but they would be unwise to take comfort. Their housing market, the recent rock of their economy, is where a much grizzlier creature lies in wait.
Most investors tend to look first at equity markets—and they have certainly had a good run virtually everywhere. Yet a repeat of the slump after the bursting of the dotcom bubble in 2001-02 remains highly unlikely. In 2000 shares were wildly overvalued. Today price/earnings ratios in most stockmarkets are near, if not below, their long-term averages. This suggests that the slide in shares could be short-lived."
Most investors tend to look first at equity markets—and they have certainly had a good run virtually everywhere. Yet a repeat of the slump after the bursting of the dotcom bubble in 2001-02 remains highly unlikely. In 2000 shares were wildly overvalued. Today price/earnings ratios in most stockmarkets are near, if not below, their long-term averages. This suggests that the slide in shares could be short-lived."
How much longer can the dollar reign supreme?
How much longer can the dollar reign supreme?: "Saddam Hussein stopped trading his oil for dollars before Iraq was invaded. Iran gets set to open a new oil bourse and futures market that will trade in euros, while Venezuela is said to be mulling over whether to follow suit.
Now Russia has joined the bandwagon. On May 10, President Vladimir Putin announced the creation of a Russian oil and gas bourse along with his intention to convert the ruble into a convertible currency that would be used for the trade.
Russia has recently swapped some of its dollar reserves for euros.
Together Iran, Venezuela and Russia corner some 25 percent of the export market in oil. If the three countries do away with the petrodollar, this could seriously buffet the US currency, forcing up interest rates, increasing the cost of imports in the US and contributing to an inflationary economy or a recession.
William Clark writing in the Energy Bulletin says, “What we are witnessing is a battle for oil currency supremacy. If Iran’s oil bourse becomes a successful alternative for international oil trades, it would challenge the hegemony currently enjoyed by the financial centers in both London (IPE) and New York (NYMEX) . . .'
At the same time, nations in this region have been exchanging percentages of their dollar reserves for other currencies.
In March, following the Dubai Ports World debacle, the UAE Central Bank said it was considering converting 10 percent of its dollar reserves to euros. Kuwait and Qatar have hinted that they might do the same.
The Commercial Bank of Syria has exchanged all its dollar devise for euros, following a call from Washington urging US banks to cease acting as correspondents for Syrian financial institutions, ostensibly because of money-laundering concerns.
Last month, Sweden cut the dollar share of i"
Now Russia has joined the bandwagon. On May 10, President Vladimir Putin announced the creation of a Russian oil and gas bourse along with his intention to convert the ruble into a convertible currency that would be used for the trade.
Russia has recently swapped some of its dollar reserves for euros.
Together Iran, Venezuela and Russia corner some 25 percent of the export market in oil. If the three countries do away with the petrodollar, this could seriously buffet the US currency, forcing up interest rates, increasing the cost of imports in the US and contributing to an inflationary economy or a recession.
William Clark writing in the Energy Bulletin says, “What we are witnessing is a battle for oil currency supremacy. If Iran’s oil bourse becomes a successful alternative for international oil trades, it would challenge the hegemony currently enjoyed by the financial centers in both London (IPE) and New York (NYMEX) . . .'
At the same time, nations in this region have been exchanging percentages of their dollar reserves for other currencies.
In March, following the Dubai Ports World debacle, the UAE Central Bank said it was considering converting 10 percent of its dollar reserves to euros. Kuwait and Qatar have hinted that they might do the same.
The Commercial Bank of Syria has exchanged all its dollar devise for euros, following a call from Washington urging US banks to cease acting as correspondents for Syrian financial institutions, ostensibly because of money-laundering concerns.
Last month, Sweden cut the dollar share of i"
26 May 2006
Base metals volatile again - Metals News - Metals Place
Macquarie: JBM - Base metals volatile again - Metals News - Metals Place: "Another day, and another highly volatile and at times illiquid trading day on the London Metals Exchange (LME) overnight. Most LME Base Metals finished the session lower as the previous session's rally faded. – copper down by 4.6% and aluminium down by nearly 2%. Zinc was the only metal to record an increase, climbing by 1.3%. With LME inventories falling, and tightness looking especially acute in the nickel market, Macquarie Research Equities (MRE) reiterates its view on nickel producer Jubilee Mines (JBM).
Nickel softened overnight, along with most other base metals, but at $21,950, down $245, was cushioned by falling warehouse stocks and increased technical tightness. LME inventories were down 420 tonnes at 18,948, the lowest since early-November 2005, while the cash/threes backwardation widened to $600/645 at one point, the tightest since June 2005. On Tuesday nickel hit a fresh record high of $22,250, boosted by potential labour stoppages at Inco's Sudbury plant. MRE believes that this tightness in nickel is highly apparent and is increasingly getting more acute."
Nickel softened overnight, along with most other base metals, but at $21,950, down $245, was cushioned by falling warehouse stocks and increased technical tightness. LME inventories were down 420 tonnes at 18,948, the lowest since early-November 2005, while the cash/threes backwardation widened to $600/645 at one point, the tightest since June 2005. On Tuesday nickel hit a fresh record high of $22,250, boosted by potential labour stoppages at Inco's Sudbury plant. MRE believes that this tightness in nickel is highly apparent and is increasingly getting more acute."
25 May 2006
Copper Gains on Speculation That Demand Will Outpace Supply
Bloomberg.com: Latin America: "May 25 (Bloomberg) -- Copper rose on the London Metal Exchange on speculation that production may not meet demand this year because of strikes and declining output at some mines.
Mexican miners yesterday began a blockade at Grupo Mexico SA's Cananea copper mine, the country's largest. There's been a strike at La Caridad mine, Mexico's second-biggest, for two months. Codelco, the world's No. 1 copper producer, yesterday warned production will decline this year and next. Demand will rise 5.2 percent this year, HSBC Holdings Plc said yesterday.
``The fundamentals of copper are very supportive,'' Roy Carson, a London-based metals analyst at Triland Metals Ltd., which trades on the floor of the LME, said today by phone. ``Codelco will produce less and strikes are still on.''
Copper for delivery in three months on the LME advanced as much as $150, or 1.9 percent, to $7,980 a metric ton. The contract was $140 higher at $7,970 as of 9:26 a.m. in London, taking its gain this year to 81 percent. Copper reached a record $8,800 May 11.
Codelco, which supplies about 11 percent of the world's copper, yesterday said its output this year will be 1.713 million tons, or 0.6 percent less than last year. Production next year will be 1.652 million tons, Codelco forecast."
Mexican miners yesterday began a blockade at Grupo Mexico SA's Cananea copper mine, the country's largest. There's been a strike at La Caridad mine, Mexico's second-biggest, for two months. Codelco, the world's No. 1 copper producer, yesterday warned production will decline this year and next. Demand will rise 5.2 percent this year, HSBC Holdings Plc said yesterday.
``The fundamentals of copper are very supportive,'' Roy Carson, a London-based metals analyst at Triland Metals Ltd., which trades on the floor of the LME, said today by phone. ``Codelco will produce less and strikes are still on.''
Copper for delivery in three months on the LME advanced as much as $150, or 1.9 percent, to $7,980 a metric ton. The contract was $140 higher at $7,970 as of 9:26 a.m. in London, taking its gain this year to 81 percent. Copper reached a record $8,800 May 11.
Codelco, which supplies about 11 percent of the world's copper, yesterday said its output this year will be 1.713 million tons, or 0.6 percent less than last year. Production next year will be 1.652 million tons, Codelco forecast."
Why it isn't a commodity bubble
Telegraph | Money | Rare metals outstrip copper demand: "Barclays Capital cited the roaring bull market for these niche metals as proof that real demand, fuelled by Asia's industrial revolutions, is the real driver of the global commodities boom.
'When market commentators use the simplistic argument that industrial metals are being driven by investment bubbles, they would do well to look at price performance in some of the non-exchange traded minor metals markets,' said the bank's commodity analyst, Kevin Norrish.
'These metals cannot be invested in, but prices are being driven higher by the same structural changes in fundamental demand as copper, increasingly classed as a speculative bubble.'
Tungsten, used in drills and light bulbs, is up 330pc; while iridium has soared 328pc on its use in compasses and pen tips. Molybdenum is up eightfold; ruthenium fivefold; both cadmium and antimony have more than tripled.
The US fund giant Pimco also disputed claims that a dotcom-style bubble had developed in commodities, insisting that hard demand was driving the boom.
'To have a speculative bubble, you need to lose all concept of an objective measure of value.
'That doesn't hold for commodities,' said Bob Greer, vice-president in charge of commodities.
He doubted that a fresh wall of money from pension funds and big institutions pouring into commodity tracker funds - thought to be anywhere between $100bn and $200bn - was causing prices to lose touch with economic reality.
'I do not believe that index investors are driving prices. Pimco is the largest manager of commodity index mandates in the world.
'Yet Pimco does not own one barrel of crude oil, one bushel of soybeans, one ounce of gold. We"
'When market commentators use the simplistic argument that industrial metals are being driven by investment bubbles, they would do well to look at price performance in some of the non-exchange traded minor metals markets,' said the bank's commodity analyst, Kevin Norrish.
'These metals cannot be invested in, but prices are being driven higher by the same structural changes in fundamental demand as copper, increasingly classed as a speculative bubble.'
Tungsten, used in drills and light bulbs, is up 330pc; while iridium has soared 328pc on its use in compasses and pen tips. Molybdenum is up eightfold; ruthenium fivefold; both cadmium and antimony have more than tripled.
The US fund giant Pimco also disputed claims that a dotcom-style bubble had developed in commodities, insisting that hard demand was driving the boom.
'To have a speculative bubble, you need to lose all concept of an objective measure of value.
'That doesn't hold for commodities,' said Bob Greer, vice-president in charge of commodities.
He doubted that a fresh wall of money from pension funds and big institutions pouring into commodity tracker funds - thought to be anywhere between $100bn and $200bn - was causing prices to lose touch with economic reality.
'I do not believe that index investors are driving prices. Pimco is the largest manager of commodity index mandates in the world.
'Yet Pimco does not own one barrel of crude oil, one bushel of soybeans, one ounce of gold. We"
US outmaneuvered by the Chinese
Rockford's Newspaper Rock River Times | rockford illinois news information: "Question: what is the connection between building skyscrapers and economic depression? New York’s Empire State Building recently marked its 75th anniversary. Asia Times says it is a great irony, but every time a record high skyscraper has been built, it has been linked to financial collapse.
The Empire State was begun in the 1920s and finished in the Great Depression of the 1930s.
Today, the Burj Dubai is being built in the Persian Gulf city-state of that name. Parallel to that is the sharp plunge in the Dubai stock market since December. The Dubai market has slid down 53 percent in four months, a collapse a major Wall Street firm’s analyst called “an adjustment phase.”
He told a newspaper: “We believe that Dubai is the Shanghai and Hong Kong of the Middle East.” That is not a great prediction. The Shanghai Stock Index is down 42 percent from its bull-market high point almost five years ago. Hong Kong’s Hang Seng Index is down 13 percent from its peak in March 2000.
Three buildings remain on the New York skyline as reminders of the exuberant Jazz Age. They are the Chrysler Building, the Empire State Building and the Manhattan Company Building on Wall Street.
Today, there also are three contenders for tallest building in the world—one in Malaysia, one in Taiwan and the one in Dubai. The first two held the title of tallest for only a few months.
Edward R. Dewey, who studied this ironic link in the 1940s, said the “world’s tallest” sell signal for stocks comes when a tower is conceived as it takes some time to complete. A new highest skyscraper always is occupied in the wake of a bull market that prompted the building’s creation. The Malaysian project to"
The Empire State was begun in the 1920s and finished in the Great Depression of the 1930s.
Today, the Burj Dubai is being built in the Persian Gulf city-state of that name. Parallel to that is the sharp plunge in the Dubai stock market since December. The Dubai market has slid down 53 percent in four months, a collapse a major Wall Street firm’s analyst called “an adjustment phase.”
He told a newspaper: “We believe that Dubai is the Shanghai and Hong Kong of the Middle East.” That is not a great prediction. The Shanghai Stock Index is down 42 percent from its bull-market high point almost five years ago. Hong Kong’s Hang Seng Index is down 13 percent from its peak in March 2000.
Three buildings remain on the New York skyline as reminders of the exuberant Jazz Age. They are the Chrysler Building, the Empire State Building and the Manhattan Company Building on Wall Street.
Today, there also are three contenders for tallest building in the world—one in Malaysia, one in Taiwan and the one in Dubai. The first two held the title of tallest for only a few months.
Edward R. Dewey, who studied this ironic link in the 1940s, said the “world’s tallest” sell signal for stocks comes when a tower is conceived as it takes some time to complete. A new highest skyscraper always is occupied in the wake of a bull market that prompted the building’s creation. The Malaysian project to"
24 May 2006
E2020 -Crisis is now!
Seven concrete consequences for economic and political players and decision-makers
Last February, LEAP/E2020 anticipated that a global systemic crisis was to be triggered at the end of March. Today, three months later, LEAP/E2020 can anticipate that the initial phase of this crisis is about to be finished and that, as soon as the beginning of June 2006, the crisis will enter a phase of acceleration. Before detailing the main features of this new phase (described in GEAB Nr5), LEAP/E2020 would like to clarify the 4 different phases of a global systemic crisis.
A global systemic crisis develops following a complex process where 4 phases can be distinguished, overlapping one another:
• in the first so-called “trigger” phase, a variety of until then un-related factors, start converging and interacting in a way that is perceptible mostly by careful observers and central players
• in the second “acceleration” phase, a large majority of players and observers suddenly become aware that a crisis is there and that it has already begun to affect a growing amount of the system’s components
• in the third so-called “impact” phase, the system starts to transform radically (implosion and/or explosion) under the strain of cumulated factors, simultaneously affecting the whole system
• in the fourth and last “decanting” phase, the features of the new system born from the crisis begin to appear.
In the present situation, LEAP/E2020 estimates that the initial trigger-phase is about to finish and that, during June 2006, the world will enter a phase of acceleration of the crisis.
Indeed, in less than three months, many certainties as to the future were turned upside down (« inescapable » dollar-denomination, « return » to cheap oil, « peaceful » solution to the Iran/USA conflict, « sustainability » of the US real-estate bubble, US « domination » over two other key global players – China and Russia,…) and a great number of indicators now point at converging directions, all of them sources of unbalance for the current system (vertiginous rise in gold and precious metals prices, escalation of inflationary pressures, increase of the interest rates, EURUSD approaching 1.30, large amounts of central banks’ reserves being switched to Euros, rise of Asian currencies, stock market and currency crises developing in various areas in the world, growing amounts of articles published in the international and national press using words such as « krach, crisis, collapse, risk, conflict, … » ).
Last February, LEAP/E2020 anticipated that a global systemic crisis was to be triggered at the end of March. Today, three months later, LEAP/E2020 can anticipate that the initial phase of this crisis is about to be finished and that, as soon as the beginning of June 2006, the crisis will enter a phase of acceleration. Before detailing the main features of this new phase (described in GEAB Nr5), LEAP/E2020 would like to clarify the 4 different phases of a global systemic crisis.
A global systemic crisis develops following a complex process where 4 phases can be distinguished, overlapping one another:
• in the first so-called “trigger” phase, a variety of until then un-related factors, start converging and interacting in a way that is perceptible mostly by careful observers and central players
• in the second “acceleration” phase, a large majority of players and observers suddenly become aware that a crisis is there and that it has already begun to affect a growing amount of the system’s components
• in the third so-called “impact” phase, the system starts to transform radically (implosion and/or explosion) under the strain of cumulated factors, simultaneously affecting the whole system
• in the fourth and last “decanting” phase, the features of the new system born from the crisis begin to appear.
In the present situation, LEAP/E2020 estimates that the initial trigger-phase is about to finish and that, during June 2006, the world will enter a phase of acceleration of the crisis.
Indeed, in less than three months, many certainties as to the future were turned upside down (« inescapable » dollar-denomination, « return » to cheap oil, « peaceful » solution to the Iran/USA conflict, « sustainability » of the US real-estate bubble, US « domination » over two other key global players – China and Russia,…) and a great number of indicators now point at converging directions, all of them sources of unbalance for the current system (vertiginous rise in gold and precious metals prices, escalation of inflationary pressures, increase of the interest rates, EURUSD approaching 1.30, large amounts of central banks’ reserves being switched to Euros, rise of Asian currencies, stock market and currency crises developing in various areas in the world, growing amounts of articles published in the international and national press using words such as « krach, crisis, collapse, risk, conflict, … » ).
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