drtdrums Posted May 8, 2011 Share Posted May 8, 2011 Warning: This ain't light reading. This is one of the better articles I've read in a while. There are probably some folks here that will appreciate this. It could use a "For Dummies" version, but it's worth slogging through if you're into this kind of stuff. And there are charts. Lots of them. Click here for the rest of the article. Under Two Flags However firmly we hold to the view that the hypertrophic, state-coddled, fractionally-based financial markets in which we must operate are not exactly the embodiment of dispassionate rationalism in their workings, it is nonetheless true that, over time, commodity prices can be shown to trace out a path not wholly divorced from that followed by the real-world processes which utilise them—especially industrial production and the internationally-dispersed network of outputs best reflected by global trade flows. In making a claim for the influence of what might be broadly termed 'fundamentals', this is not to assert the patently indefensible proposition that commodities — much like stocks, bonds, houses, classic cars, vintage wines, or antique furniture—are not also subject to alternating waves of avarice and abhorrence—the 'temperamentals', if you will—which may occasionally swamp the underlying pull of such mundanities as supply, demand, and inventory. In fact, given our global system of unanchored (and frequently unhinged) money and credit, even this ostensible distinction between price movements supposedly soundly based on metal in the warehouse, or barrels at the refinery and those caused by the wilder, speculative herding founded on chart patterns, lever¬aged groupthink or blind computer algorithms is much less definitive than it appears. (Article continued at link -- this was the tip of the iceberg) Click here for the rest of the article. Link to comment Share on other sites More sharing options...
zoony Posted May 8, 2011 Share Posted May 8, 2011 The author's bias and intellectual immaturity reads through halfway through the first sentence. No thanks This is exactly the kind of intellectual dimwit who writes with a thesaurus. Reminds me of somebody, lol Link to comment Share on other sites More sharing options...
alexey Posted May 8, 2011 Share Posted May 8, 2011 Since we must always be aware that the field of battle is not the pristine sandbox of the officer training school, but rather a dead ground-riven labyrinth of swamps, ravines, and gulliesOh what pristine form of pure joy must this author experience upon reading his own writting Link to comment Share on other sites More sharing options...
techboy Posted May 8, 2011 Share Posted May 8, 2011 I'm having a hard time taking this seriously. I'm not sure if it's the ridiculously exaggerated prose, the known hysteria/fearmongering of zerohedge, or the fact that the author uses a pseudonym of a character from Fight Club. Probably all three. The comments on the article make it worth readfng, though. Link to comment Share on other sites More sharing options...
Corcaigh Posted May 8, 2011 Share Posted May 8, 2011 Was that written by an actual person, or machine-generated? Link to comment Share on other sites More sharing options...
TimmySmith Posted May 8, 2011 Share Posted May 8, 2011 Cliff's Notes: Asia is now 1st in the pecking order for commodities. We will get the scraps, and pay a premium. Sadly for us, it seems to be a pretty reasonable conclusion. Link to comment Share on other sites More sharing options...
drtdrums Posted May 9, 2011 Author Share Posted May 9, 2011 I'm having a hard time taking this seriously. I'm not sure if it's the ridiculously exaggerated prose, the known hysteria/fearmongering of zerohedge, or the fact that the author uses a pseudonym of a character from Fight Club.Probably all three. The comments on the article make it worth readfng, though. ZH is pretty chicken little, but you've never struck me as one to immediately reject an assertion based solely on the source. In addition, the Tyler Durden SN is used by tons of contributors to the site (perhaps all of them). Agreed on the comments. Any thoughts on the substance of the article? I realize that the style is pretty tough to slog through (I read it while dosed up on pretty strong prescription meds -- on a second glance, Corrigan could have made his points in 4 paragraphs), but what he actually managed to say in an overly verbose manner is poignant and crucial (I think). Namely... "Furthermore, this has brought about a pronounced shift in the relative pricing of raw inputs and finished manufactures, reversing the previous two decade decline of the former vis-à-vis the latter into a steep, sustained rise in the ratio between them. " and... "As a consequence, here, too, does pressure on stock:use ratios seem bound to persist, reducing the cushion we all need to protect us from the capricious buffeting of meteorology and man-made malfeasance, a feature which not only tends to keep prices elevated, but also makes them far more subject to sudden spikes and the optionality of sharp backwardations." and... "While this situation persists, it implies that commodities should continue to enjoy robust demand and advantageous pricing power, amid a struggle to maintain an adequate supply—fully incentivised though this may be—and with a level of inventory cover which becomes rapidly depleted when the engine is firing upon most (if not all) of its cylinders." and... "In fact, a glance at what the central banks and their favoured coterie of TBTF clients have been up to these past 2 1/2 years shows that - yes, Mr. Chairman - the blame rests squarely with them and with them alone." Link to comment Share on other sites More sharing options...
Corcaigh Posted May 9, 2011 Share Posted May 9, 2011 What real actionable information or measurable predictions are in the article? Link to comment Share on other sites More sharing options...
TimmySmith Posted May 9, 2011 Share Posted May 9, 2011 What real actionable information or measurable predictions are in the article?This came to mind. Asia (China) is in a prime position to start stockpiling goods. If they start a buying and storing tear, particularly with oil and steel, the world market will drastically change. It will hurt the US and cause great pain in Europe, but it will devastate places like Africa, South & Central America, Australia. Link to comment Share on other sites More sharing options...
zoony Posted May 9, 2011 Share Posted May 9, 2011 I heard Rush Limbaugh reference Tyler Durden postings on internet message boards last week on his show, specifically, in reference to latest jobs data. This guy is a GOP hack posing as a random internet guy. Link to comment Share on other sites More sharing options...
JMS Posted May 9, 2011 Share Posted May 9, 2011 The author's bias and intellectual immaturity reads through halfway through the first sentence. No thanksThis is exactly the kind of intellectual dimwit who writes with a thesaurus. Reminds me of somebody, lol I too had problems with the first sentence. I had even larger problems with the second sentencee. commodity prices can be shown to trace out a path not wholly divorced from that followed by the real-world processes which utilise them Wasn't the concensus of the commodity analysts during the last run up of oil prices during the bush administration that speculators were causing the spike in prices? That the inelastic nature of the oil commodity and the tight control of that commodity openned up a window for investors to exploit. Effectively decoupling cost from the market? Hell isn't OPEC a cartel? Isn't the very nature of the oil market thus decopuled from the actions of the free market? Seems like idealistic dribble to decry the intervention of the government into the market place when that marketplace is by it's very nature not free. Consumers should be at the mercy of trusts is about the most agregious anti free market ideal I can think of. Link to comment Share on other sites More sharing options...
mardi gras skin Posted May 9, 2011 Share Posted May 9, 2011 I heard Rush Limbaugh... Link to comment Share on other sites More sharing options...
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