The difficulty with the bubble moniker is determining exactly how much of the price is being driven by purely speculative factors. With Crude, a variety of forces are driving prices: A combination of both fundamentals (increasing demand, constrained supply, pipeline problems), technicals (Trend, money flow, etc.), along with the geopolitics of two Middle East wars — as well as some speculation.
Additionally, we have seen the general perception of commodities shift, where they are now seen as a more legitimate asset class for portfolio managers, along with Equities, Fixed Income, REITs, cash, etc. than it has been previously.
Even If I disagree with the bubble thesis, I love any report festooned with lovely charts, and this one is no different:
An oil bubble to rival the internet boom (PDF)
FactSet, 3 May 2008
Unlike the Federal Reserve, Trichet and the EC are very concerned with high Inflation:
Remember, the EC has a single charge — maintaining price stability — and is not concerned with maximizing growth . . .
Trichet Sees `Rather Protracted’ High Inflation
Gabi Thesing and Christian Vits
Bloomberg, May 8 2008
Yesterday, I wrote: “David Leonhardt’s NYT columns are oftentimes insightful and illuminating. Unfortunately, today’s column is not one of those times . . .” I promised readers (and David) an explanation. Consider this it. First off, I interpreted Leonhardt’s column as really two distinct issues — one psychological, one statistical. He got the first one…Read More