Gold ETF demand doubles in the first quarter Demand for gold exchange-traded funds doubled from the first quarter of last year, but demand for the precious metal in terms of tonnage dropped 16% to its lowest quarterly figure in five years, the World Gold Council said Tuesday. "Continuing instability in the equities markets, ongoing fears over the dollar and rising inflation and increased understanding of gold's investment attributes helped spur demand" for ETFs, the Gold Demand Trends report, complied by precious-metals consultancy GFMS Ltd. for the WGC, showed. Gold ETF demand climbed to 73 metric tons for the first quarter of this year to represent $2.2 billion in dollar terms.
Crude soars to new highs on demand worries Crude-oil futures on Tuesday traveled to a new record high above $129 a barrel after hedge fund manager and Texas oil man T. Boone Pickens said he expects oil will hit $150 a barrel before the year is through. Speaking on CNBC-TV, Pickens said world oil supplies are declining and prices will continue to rise because output is not keeping pace with demand. Speculators, Pickens said, have "nothing" to do with record prices. The June crude contract, which expires at the end of trading Tuesday, was recently up $1.79, or 1.4%, at 128.84 a barrel on the New York Mercantile Exchange, after hitting a high of $129.31 earlier on. July crude futures climbed $1.63, or 1.3%, at $128.35 a barrel on Nymex.
Producer prices rise tame 0.2% in April Wholesale prices rose a smaller-than-expected 0.2% in April after seasonable adjustments, with food prices flat and energy prices falling, the Labor Department reported Tuesday. The producer price index has risen 6.5% in the past year, the government said. The PPI had risen 1.1% in March. The core PPI - which excludes food and energy prices - rose 0.4% in April, more than expected. Core prices are up 3% in the past year, the biggest year-over-year rise since late 1991. "The trend in core PPI inflation remains uncomfortably high," wrote Zach Pandi, an economist for Lehman Bros. "This release is likely to keep inflation concern relatively high" at the Federal Reserve.
'Numbers racket' exposes potential disaster for economy, markets Remember that big ah-ha moment in the 1939 classic "The Wizard of Oz?" Dorothy wants to see the Wizard. His voice booms: "Do not arouse the wrath of the Great and Powerful Oz! Come back tomorrow!" Afraid, Lion, Tin Man, Scarecrow shake. Dorothy's dog runs up, tugs on a curtain. She chases Toto, pulls curtain open: "Who are you?" Dr. Marvel stutters: "Well, I - I - I am the Great and Powerful, Wizard of Oz." Dorothy: "You are? I don't believe you!" He replies: "No, it's true. There's no other Wizard except me." Dorothy's miffed: "Oh, you're a very bad man!" Wizard: "Oh, no, my dear. I'm a very good man. I'm just a very bad Wizard."
Economic Tide Is Rising for Repo Man So many people have so many things they can no longer afford. This is an excellent time to be a repo man. When a boat owner defaults on his loan, the bank hires Jeff Henderson to seize its property. The former Army detective tracks the boat down in a backyard or a marina or a garage and hauls it to his storage area and later auctions it off. After nearly 20 years in the repossession business, Mr. Henderson has never been busier. "I used to take the weak ones," he said. "Now I’m taking the whole herd." Boating was traditionally the pastime of the well-off, but the long housing boom and its gusher of easy credit changed that. People refinanced their homes and used the cash for down payments on a cruiser, miniyacht or sailboat.
US denies report on plan to attack Iran The White House on Tuesday flatly denied an Army Radio report that claimed US President George W. Bush intends to attack Iran before the end of his term. It said that while the military option had not been taken off the table, the Administration preferred to resolve concerns about Iran's push for a nuclear weapon "through peaceful diplomatic means." Army Radio had quoted a top official in Jerusalem claiming that a senior member in the entourage of President Bush, who concluded a trip to Israel last week, had said in a closed meeting here that Bush and Vice President Dick Cheney were of the opinion that military action against Iran was called for. The official reportedly went on to say that "the hesitancy of Defense Secretary Robert Gates and Secretary of State Condoleezza Rice" was preventing the administration from deciding to launch such an attack on the Islamic Republic for the time being.
Citigroup Hedge-Fund Loss Weighs on Three Banks The downward spiral of a Citigroup Inc. hedge fund has caused steep losses for at least three large U.S. banks that hoped it would rev up returns on a controversial type of employee life insurance. Besides triggering a lawsuit against an insurer and brokerage firm that arranged the hedge-fund investment for Fifth Third Bancorp, the losses may pressure Citigroup to give the banks some of their money back, as it has agreed to do for individual investors. Such a bailout would be costly, because the clobbered banks sank more than $1.6 billion into the hedge fund, according to the lawsuit and people familiar with the matter.
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