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Macro Economics Macro Viewpoints

Third Stage Growth in Agri-Business

Andy WaldockComment on Third Stage Growth in Agri-Business

The run up in food prices this year has, hopefully, shined a bright light on the oligopoly that controls the world’s grain markets. An oligopoly is a market that is controlled by a small number of
producers, which allows them to collaborate and set prices for the market as a whole. OPEC is the most common textbook example. The U.S., Brazil, Argentina and Australia dominate the grain industry.
There is grain production in every country but these four control the vast majority of the export market. That may be about to change and bring new, long-term investment possibilities …

Currencies Current Markets Trading Strategies

The Value of the U.S. Dollar

Andy WaldockComment on The Value of the U.S. Dollar

Despite the best efforts of Quantitative easing and artificially suppressed rates, the U.S. Dollar is exactly where it was four years ago. Perhaps the bigger surprise is that commercial traders are building a huge long position in the Dollar Index futures contract. We’ll examine the reasons why as well as the effect this may have on other markets related to the U.S. Dollar.

Current Markets Trading Strategies

Who is Pushing the Stock Market?

Andy WaldockComment on Who is Pushing the Stock Market?

We turned bearish on the stock market rally near the end of August, as a result, we’ve missed out on the last leg of the rally from 1400 to 1450 in the S&P
500. The August highs presented us with a fundamental picture that was becoming increasingly bearish and combined with the European unrest, stepping aside seemed like the appropriate action.
The primary analysis simply stated that the forward returns didn’t justify the added risk necessary to capture …

Energies Macro Economics Macro Viewpoints

Energy Fork in the Road

Andy WaldockComment on Energy Fork in the Road

One economic topic that isn’t getting the attention it deserves is the energy policy. The drought of 2012 along with the expiration of subsidies paid to ethanol blenders will make it nearly impossible to reach the Renewable Fuels Standards (RFS) as early as next year. The standards that were put in place to increase this country’s energy independence were based on protectionist interests and were only viable as long as ethanol produced by the U.S. was subsidized while Brazilian ethanol was simultaneously taxed.

Current Markets Macro Viewpoints

The Fed, the Ultimate Commercial Trader

Andy WaldockComment on The Fed, the Ultimate Commercial Trader

Based on what I see in the CFTC’s Commitment of Traders reports, it appears that the small traders, the ordinary citizens of this country are going to be the ones left holding the bag when Rogoff and Reinhart’s, “Bang Moment” from, This Time it’s Different triggers the fire alarm and the market tumbles. In some ways, this is simply how free markets work. In other ways, this may be the single biggest fraud ever perpetrated on the average U.S. taxpayer.

Uncategorized

Iranian Sanctions do More Harm than Good

Andy WaldockComment on Iranian Sanctions do More Harm than Good

The Iranian petroleum industry has been crippled by the economic sanctions we have imposed on Iran along with the European Union and other countries in July. Iran is exporting less than 1 million barrels per day and that’s a 20-year low. This knocks them from third place on the global exports list down towards India and Brazil at 23rd. It also makes for good press and sound bites by the President on September 11th. Unfortunately, his actions on this embargo are actually separating us from global trade with the very partners we need to pull our economy out of the doldrums. Furthermore, it is galvanizing the Iranian citizens’ resolve against us.

Current Markets Trading Strategies

Arabica Vs. Robusta Coffee Spread

Andy WaldockComment on Arabica Vs. Robusta Coffee Spread

The move towards cheaper coffee drinks has shifted the normal balance of supply and demand by closing the gap between Robusta and Arabica coffee beans. Coffee blenders have been using more Robusta in their blends to try and hold consumer prices down. This shift picked up steam after last summer’s Arabica prices soared due to the weak Columbian Arabica harvest. This shift has caused Arabica’s premium over Robusta to decline from $1.45 per pound at the end of last year to around $.70 currently. Much of the recent gains came from a weak Vietnamese Robusta harvest.