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Aluminum ETF a strategic extension for banks-Alcoa
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The migration of some of Wall Street's biggest banks into the physical aluminum market is a strategic progression toward the creation of an exchange-traded fund （ETF）， the director of material management with the world's largest aluminum producer said on Tuesday.


"There is still plenty of risk capital around to finance metal … It's one of the reasons why the ETFs are becoming more attractive," said Greg Wittbecker, director of material management with Alcoa said on the sidelines of Harbor Intelligence's third annual aluminum outlook conference.


"People are being attracted to more fungible assets … the simple reality is that somebody has to be given the incentive to finance that pile of metal," he said.


The planned launch of a physically backed aluminum ETF between Credit Suisse and Glencore International has opened the door to a whole new world for the investment banks


Goldman Sachs has stepped into the fray as well Cheap Kostas Manolas Jersey , with its purchase of London Metal Exchange warehousing company Metro International Trade Services in February.


"It's a natural extension of that strategy that they want to own warehousing capacity as a means of developing their own ability to price that warehousing and make their ETF more successful," Wittbecker said.


Warehousing and financing deals are enabling banks to reap even more money by allowing them to buy cash metal cheaply, sell it forward at a profit and strike a warehouse deal to store it cheaply for an extended period of time.


Financing deals have tied up 75 percent to 80 percent of LME stocks.


With Goldman's financial backing, Metro has recently been seen outbidding rival warehouses in the Detroit area in incentives to attract greater flows of primary aluminum into its warehouses.


"Owning a warehouse gives these banks the ability to migrate into the physical market Cheap Kevin Strootman Jersey ," Wittbecker said during his panel discussion on Raw Materials, Aluminum Output and Supply Issues. "Owning a warehouse is a great way for people to leverage their flexibility in trading in and out of warehouses."


The ownership also provided them protection against adverse economic conditions, he added.


"Think of a warehouse as basically a metal bank seeking to obtain material. They use rebates as a way of attracting metals toward them and they price that rebate on a counter-cyclical view of what they think of the economy," he said.


"They will pay higher rebates when they think the probability of demand pull for that metal is going to be the weakest Cheap Juan Jesus Jersey , and vice versa… They want more metal because they make their money storing metal.


"It comes from taking a counter-cyclical view of the economy," he said.


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The agency's press release at Dyman & Associates Risk Management Projects indicated that the lease, which will cost the tech giant $ 1.16 billion, is for " research Cheap Juan Iturbe Jersey , development, assembly and testing in the areas of space exploration, aviation, roverrobotics and other emerging technologies".


NASA Administrator Chris Bolden said Cheap Hector Moreno Jersey , "As NASA expands its presence in space, we are making strides to reduce our footprint here on Earth." He added that the agency wants "to invest taxpayer resources in scientific discovery, technology development and space exploration 鈥?not in maintaining infrastructure no longer needed."


According to the report, a real-estate offshoot of Google called Planetary Ventures will be managing the Moffett airbase and will take over the $200 million improvement to the site Cheap Gregoire Defrel Jersey , which includes educational facilities to let the public "explore the site's legacy".


The 1,000 acres of airfield in the southern part of SF Bay include two runways, a golf course, office space Cheap Gerson Jersey , NASA's Ames research center and three hangars, one of which is the iconic Hangar One. It's expected that the agency will save around $6 million worth of operation and maintenance expenses per year because of the lease.


Hangar One is one of the biggest freestanding edifice which covers 8 acres and was constructed in the 1930s for US naval airships. In 1966, it was recognized as a US Naval Historical Monument but has recently been placed as an endangered historic place according to a Dyman & Associates Risk Management Projects' press release.


鈥淕SA was proud to support NASA in delivering the best value to taxpayers while restoring this historic facility and enhancing the surrounding community," said Dan Tangherlini of the US General Services Administration.


The Moffett lease shouldn't really come as a surprise as it's practically just next to Googleplex HQ. In fact Cheap Federico Fazio Jersey , it's already servicing private jets owned by the company's executives such as Sergey Brin, Larry Page and Eric Schmidt.


Both Brin and Page, the firm's co-founders, are evidently interested in space exploration and aviation as shown by their X Lab's Project Loon and Project Moonshot. Their company has also acquired satellite and robotics firms recently such as Meka Robotics and Redwood Robotics.


NASA and Google have also previously teamed up in 2005 when the latter made office at the agency's research facility and launch a new lab.

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