Now it’s semi-official. A respected financial figure, no less a central bank chief with his reputation still intact, has said in bureaucrat-speak that speculation may indeed have had something to do with recent oil price moves. That view was nearly heretical until the rapid fall in oil prices began in July. From the Financial Times: […]
Read more...Bill Gross of Pimco’s monthly newsletter, “There’s a Bull Market Somewhere?” is out and making the rounds. The title refers to a Jim Cramer dictum. The bond chief uses it to argue that asset prices are declining on all fronts, which he then contends that the US government must reverse (boldface his): because in a […]
Read more...Wow, what happened? The CFTC went from being a lapdog to developing teeth. A little late, now that oil prices are on a forced march downward, but the commission could have backed off as oil became less of a front-burner issue. (Of course, your cynical blogger wonders if there was a risk that this story […]
Read more...Whether by accident or design, we’ve just been through a wee experiment on how higher fuel prices affect growth. Admittedly, it is difficult teasing out the impact of the credit crunch versus the oil and commodities spike, but in the US, habits started to change at $4 a gallon of gas, a lower level than […]
Read more...Macro investor Marc Faber, a commodities bull until the spring of this year, says that commodities have further to fall. From Bloomberg: Oil will likely drop further in the next three to six months, according to investor Marc Faber, who reiterated his forecast that the second half of 2008 won’t be “favorable” for commodities. The […]
Read more...Reader Paul e-mailed about the special, early opening of the NYMEX to permit pre-Gustav trading. As he correctly noted: I have NEVER heard of a US market opening early due to macro events; the usual move is to CLOSE during exceptional circumstances. Neither have I. This looks pretty suspicious. Did some influential parties need to […]
Read more...Reader Michael forwarded the current issue of The Energy Report by Phil Flynn at Alaron. It contends that demand destruction is proceeding at a rapid pace. It also highlights an issue discussed in a recent research report by Deutsche Bank, that energy demand forecasts by recognized bodies such as the EIA have been high, and […]
Read more...We have noted before that oil supply and demand data is pretty poor. Let’s face it, this is a product that is traded internationally with no central mechanism for purchases and sales. And certain important actors, namely OPEC members, are less than fully cooperative. But investors and commentators, hungry for anything that passes for hard […]
Read more...Nick Butler, in “The falling oil price is a lull in the storm,” argues that the break in oil prices is likely to persist for a bit due to improvements on the supply side, but that falling into complacency would be a mistake. The bad thing about the volatility in oil prices is that it […]
Read more...We have been skeptical of the idea that a weak dollar would be the boon for US manufacturing that many thought it would. The reason? The best possible outcome would be to see a resurgence in manufacturing, since manufacturing has higher potential for productivity gains than does the service industry (although getting back some of […]
Read more...Since roughly February, a solid minority of commentarors, including this blogger, have questioned the thesis that the rapid increase in oil prices was solely the function of supply and demand. It was disconcerting to see what reactions this stance elicited. There was often an unwillingness to read what was written, and instead turn the post […]
Read more...A very good short piece at the Financial Times by Ed Morse, chief energy economist at Lehman. Readers may know that Lehman has been the staunch oil bear in contrast to Goldman’s uber oil bull posture. Note that Morse’s argument is similar, although more short-term focused, to a post we discussed, “Peak Demand.” From the […]
Read more...A post by Jim Fitch of Some Assembly Required. The real purposes of a democratic society cannotbe achieved by violence and destruction. George Kennan. Balance Sheet: The housing market continues to deteriorate. Unemployment is rising. National retailers are seeking Chapter 11. The economy is slowing, if not in recession. Auto sales are non-existent. Americans have […]
Read more...It no doubt seems absurd to question the idea that deleveraging in underway. We’ve had three heroic central bank interventions, starting in August 2007, to reverse seize-ups in the money markets. The asset backed commercial paper market has been almost in run-off mode. Leveraged buyout loans have been scarce to non-existent. Banks have cut home […]
Read more...The text that accompanies the slides from a July JP Morgan report in its Hands-On China series by Michael Goettti (hat tip reader Michael) notes that it you asked most people how quickly Chinese food consumption was growing, most people would peg it in the 7% to 10% growth range, paralleling GDP growth. This is […]
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