Posts filed under “Commodities”

The Daily Show on Goldman Sachs’ Aluminum Manipulation

Hilarious:

Goldman Sachs bets on the future price of aluminum while simultaneously goosing the future price of aluminum by creating a supply bottleneck in its aluminum warehouse.

John Oliver’s Arcane Details of Boron-Group Metals Pricing Update

(05:13)

Category: Commodities, Crony Capitalists, Federal Reserve, Video

Category: Commodities, Investing, Think Tank

Commodity Prices and Inflation: The Perspective of Firms

Commodity Prices and Inflation: The Perspective of Firms Mike Bryan, Brent Meyer and Nicholas Parker July 16, 2013     We’ve been thinking a lot about commodity prices lately. In case you haven’t noticed, they’ve been falling. And with inflation already tracking well under the Federal Open Market Committee’s (FOMC) longer-term objective of 2 percent,…Read More

Category: Commodities, Inflation, Think Tank

The orange juice crop report:
tradingplaces

Enjoy:

Episode 471: The Eddie Murphy Rule, also known as The economics of Trading Places 

Source: NPR

Hat tip: kottke

Category: Commodities, Film, Video

Have We Seen the End of the Commodities Bull Run?

On today’s “Futures In Focus,” Bloomberg News commodity reporter Elizabeth Campbell looks at whether the bull market in commodities is over and what is pressuring prices. She speaks on Bloomberg Television’s “Market Makers.”

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Category: Commodities, Video

Agricultural and Farm Update

Summary: As the season progresses, we see corn production estimates declining, and corn prices declining. Indeed, the early information suggests yields will be less than government forecasts, and that the USDA estimates will decline starting in June. Higher corn prices and increased worries about yields should drive accelerating sales of fertilizers, pesticides and higher yielding…Read More

Category: Commodities, Think Tank

Wrong Like It’s Their Job

@TBPInvictus here. Things have not been going well of late for the ideologues who also wax economic regarding inflation, interest rates, austerity, etc. They’ve been wrong at every turn. Luskin, Ferguson, Bowyer, Laffer, Kudlow, the WSJ editorialists, and so on. Been a bad five or so years. As Barry has repeatedly pointed out, it is…Read More

Category: Commodities, Really, really bad calls

Medicinal marijuana markets: Weed goes legit

Medicinal marijuana markets: Weed goes legit Source: USAToday

Category: Commodities, Legal

The New Great Rotation: Commodities into Bonds

You probably heard the chatter over the past few quarters: “The Great Rotation” was about to unleash a new leg up in Equities. Bonds were going to be sold, equities purchased, and a new leg up was starting.

The story goes something like this: U.S. Treasury Bonds had enjoyed a 30 year bull market, and it was now coming to an end. Paul Volcker rebooted fixed income, taking rates to 20% to break inflation, and in the three decades since bonds have seen their prices inflate as rates normalized, then fell precariously low, then were driven to zero by QE. That cycle is over, we are told, as rates now have nowhere to go but up, and investors will soon become sensible and rotate into equities.

Except, of course, that it hasn’t.

Why? Perhaps we should consider an alternative explanation to the sector rotation story, which is rapidly being revealed as little more than wishful thinking.

The story that is not getting told nearly as much: The investment community noticed the success of Endowment funds (e.g., Yale’s David Swensen). The monkey-see-monkey-do community, ignoring valuations and prior gains, hired new consultants to shake it up. “Make us look like Yale” they pleaded to the mostly worthless community of consultants. No fools they, the overpaid consultants happily complied, and the next thing we know, these Whiffenpoof Wannabes are up to their eyeballs in private equity, hedge funds, structured products, real estate, and commodities/managed futures.

Gee, late-to-the-party investors in illiquid, pricey investments — who ever could have imagined that this was not going work out particularly well.

Time for a change: Fast forward a disastrous decade. As managers and consultants were replaced/fired, the new guys wanted to start unwinding the work of their priors. Since most of these alternative asset classes are illiquid, there is not a lot of wiggle room without severe haircuts (penalties for early withdrawal). What to do.

One of the few that is not are the Commodities/Managed futures bucket. My guess, based on prices and logic, is that these new managers are selling what they can — and that is commodities.

What do the charts (after jump) say?

Gold and Silver flat for 2 years. Energy for even longer. Agricultural products back to 2010 prices. Industrial metals near 2010 lows.

Commodities started the 2000s so promising — what with rampant inflation and the dollar losing 41% of its value, have since gone nowhere. So the new guys are sellers, and the money is going into less esoteric, liquid assets.

That means traditional assets: Munis, Treasuries and Corporates for the safe money, stocks for their risk assets.

The great rotation is already underway. Just not the way the stock bulls have been hoping for.

 

 

 

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Category: Asset Allocation, Commodities, Fixed Income/Interest Rates, Investing, Markets, Sentiment

National Gas Prices

Click to enlarge Source: WSJ     Interesting graphic on gas prices nationally . . .

Category: Commodities, Digital Media, Energy