Setting of the Rising Sun
Japan’s reconstruction costs will hurt their debt rating, increases their servicing costs and drain the current oil surplus. This may be pin to prick the bubble of the United State’s recent economic upswing.
Blog
Trading the Tsunami
The tsunami’s effects will be felt economically, much further than Japan. It will have a massive impact on food and energy prices. Fortunately, through futures trading, there’s the potential to make far more trading commodities than one will ever spend on them.
Crude, Cocoa or Democracy?
The events over the last few months in the Ivory Coast and Libya have provided us with an apples to apples comparison of exactly how the current administration intends to position the United States in respecting the national sovereignty of foreign leaders versus the protection of global financial interests in those same countries.
Over Priced Crude – Not Our Problem
The question we should be asking ourselves is why we spend between $50 and $100 billion a year to protect roughly $35 billion dollars worth of the oil we import.
The Vagaries of Option Vega
The trouble in Libya is one of those external market shocks that take everyone by surprise. Gaddafi has been in power since he seized it in a 1969 coup. His rule has been similar to most autocrats,
full of hero worship and enmity. The important thing is that his country has been relatively stable for quite a long time. Therefore, the largest oil reserves in Africa and the 9th largest oil
reserves in the world have never been questioned. Additionally, Iran is using the chaos across north Africa to assert their power as a dominant force in the …
Crack Spread and High Gas Prices
The price of gasoline is holding above $3.00 per gallon and bouncing its way higher. This is happening even though the price of crude oil remains fairly well capped technically at $90 per barrel
in spite of the Egyptian conflict and concern over control of the Suez canal. The price of crude oil is also showing fundamental weakness at these levels. The weekly commitment of traders report
shows a record net short position by commercial traders who are expecting the market to decline from these prices. Furthermore, the gap in prices between current crude oil and crude for …
Long Only is Not Diversification
The new vogue in leveraged assets has been the creation of commodity funds. Commodity funds have provided a long only investment entry into the futures markets for the novice investor. These funds have gone from non-existent to more than $370 billion in equity at the top of the first commodity bubble in 2008. We have since surpassed that total.
Defending the Global Slowdown
I’ve taken a bit of heat over the last few weeks as I’ve suggested that we may be nearing the end of a very good bull run in all tangible markets. These include the stock and commodity markets
which are at levels we haven’t seen since before the economic crisis began. More and more data has come out on the negative side of things going forward and it’s being discussed and given weight to,
by several economists, central bankers, traders and hedge fund managers.
Here is a consensus survey of their bearish take on the global …
The Politics of Cocoa
The Ivory Coast is caught in the middle of a major struggle. They are the world’s largest cocoa producer and are believed to have some of the largest untapped oil fields in the world. The country
should be laying the groundwork and creating the infrastructure to capitalize on their natural resources and developing as a nation. Instead, their nation is on the unsafe to travel list by the CIA
and they are on the brink of declaring marshal law.
Laurent Gbagbo has ruled the former French colony for the last ten years. He has been accused …
Food Inflation is Here to Stay
Food prices are beginning to soar. Just as decent nutrition is the most basic of luxuries in a developing economy, so is it the most primal of necessities. We are already seeing riots in many third world countries over the price of sugar and grains. Any planting issues in the U.S. this spring would douse the global embers of unrest with gasoline.