Thursday, January 26, 2006

Shine on!

It’s coming. Despite roadblocks put up by the Silver Users Association, the Securities and Exchange Commission (SEC) in conjunction with the American Stock Exchange, has proposed new rules that will guide the trading of the upcoming silver exchange traded fund (ETF).

Let’s be clear – the proposed rule from the SEC governing trading of the silver ETF (Rule Change Relating to the Listing and Trading of Shares of the iShares® Silver Trust) should not be confused with the pending registration of iShares Silver Trust (SLV) shares with the SEC. These are separate matters. However the SEC action indicates the very clear intention of the SEC and AMEX to prepare for the eventual trading of the silver ETF. The proposed rule will take at least until February 7, 2006 to be approved, and possibly, it could be subject to further delays and/or changes.

Tuesday, January 10, 2006

Metals go zing!

Shortfall of metals risks China's rise

HOLD tight, it's going to be another belter of a year for metals.

In fact, so critical is the supply situation, according to one local analyst, that China's growth could be compromised because it cannot get its hands on enough raw materials.

The starkness of the situation is illustrated by copper. While stocks of the red metal have been rising in recent weeks, the London Metal Exchange's holdings account for just two days' worth of world consumption.

Merrill Lynch's US operation sent a note to clients last week that copper, aluminium, nickel and steel would be in tight supply for 2006.

Monday, January 09, 2006

Savings? We don't need no stinkin' savings

Americans saving less than nothing / Spending could outstrip income in 2005, which hasn't happened since the Depression:

When the Commerce Department recently tallied up consumer finances for November, it found that Americans shelled out more money than they took in. It was the seventh such month of red ink during 2005.

Kevin Lansing, an economist with the Federal Reserve Bank in San Francisco, tracks the personal savings rate -- the Commerce Department's measure of how much consumers have left after spending is subtracted from income. In November the savings rate was a negative 0.2 percent.

Given how much red ink households racked up in the first 11 months of last year, Lansing said the nation's personal savings rate could well be negative for all of 2005.

That, he added, would be "the first such occurrence since the Great Depression."

RFID (sniff, sniff)

Mastercard has a new commercial out touting their new PayPass™ technology. It's an RFID key fob that you swipe at the counter:

Texas Instruments today announced plans to deliver ISO/IEC 14443 compliant radio frequency identification (RFID) chips designed to meet the stringent security requirements for MasterCard International's PayPass™ line of RFID payment cards and tokens. TI expects to submit this product for MasterCard certification in the second quarter of 2005. Full production is planned to start in the second half of this year.

Stalky pointed out why it might not be a Good Thing™:

The Texas Instruments DST tag is a cryptographically enabled RFID transponder used in several wide-scale systems including vehicle immobilizers and the ExxonMobil SpeedPass system. This page serves as an overview of our successful attacks on DST enabled systems.

Saturday, January 07, 2006

Deficits don't matter

OPEC, Russia to pick up US deficit slack:

THE principal source of money to finance the cavernous US current account deficit is shifting from Asia to Organisation of the Petroleum Exporting Countries members and Russia, a move that may undermine world financial stability.

An analysis of global payments balances by ANZ chief economist Saul Eslake concludes that it cannot be assumed that the surpluses of the oil-producing nations will be recycled back to the US as smoothly as have Asia's surpluses.

The US has consistently defied the doomsayers by running ever-larger deficits without the least flicker of concern on bond markets.

Eslake notes that the Organisation for Economic Co-operation and Development warns every six months that the global payments imbalances are unsustainable. Its latest forecast is for the deficit to surpass $US800 billion ($1.05 trillion) in 2005, rising to $US980 billion by 2007.

Friday, January 06, 2006

That sound you hear?

It's the other shoe:

China indicated on Thursday it could begin to diversify its rapidly growing foreign exchange reserves away from the US dollar and government bonds – a potential shift with significant implications for global financial and commodity markets.

Economists estimate that more that 70 per cent of the reserves are invested in US dollar assets, which has helped to sustain the recent large US deficits. If China were to stop acquiring such a large proportion of dollars with its reserves – currently accumulating at about $15bn (€12.4bn) a month – it could put heavy downward pressure on the greenback.

Wednesday, January 04, 2006

Dollar slips

Dollar Falls on Speculation Fed Closer to Halting Rate Policy

The dollar had the biggest two-day drop against the euro in five years after the Federal Reserve suggested it is closer to halting its interest-rate increases.

A shift in Fed policy may prevent a further widening of the yield advantage on U.S. assets that pushed the dollar up more than 14 percent against the euro and yen in 2005. A European Union report today showed inflation exceeded the European Central Bank's target for an 11th consecutive month.

``There's a dollar-bearishness out there right now,'' said Peter Lorraine, a managing director of foreign-exchange trading at Brown Brothers Harriman & Co. in New York. ``Once the Fed says they're getting near the end, the dollar is falling.''

Heh. No kidding, Pete?