Commodity Bubble Proponent

Think the Commodities/Mining Boom Is Over? Insiders Don't

I can point you to homebuilder quotes in 2006 where they thought their slowdown in demand was a temporary blip.

Phase I of the bubble bursting is denial

The Commodity Conundrum: Securitization and Systemic Concerns (Part III)

nice piece

The Commodity Conundrum: Securitization and Systemic Concerns (Part I)

Interesting article. I give you kudos for hitting the nail on the head

While I think that some of the rise in commodity prices is justified in terms of supply/demand, to say that derivatives trading has thrown gasoline on this fire would be the understatement of the century. All of the governmental reports, from the EIA to the IEA show inventories of all products within to slightly above the five year averages and effective spare capacity of 2.3-2.5 million barrels per day. This coincidentally, is the least tight the oil market has been since the Iraq war in 2004. More oil projects are in the pipeline and new drilling equipment is being built to meet demand. Additionally, any supply forecast that tries to predict market conditions beyond 2-3 years would be somewhat unreliable and maybe understated somewhat because companies tend to play their cards close to the vest in order to prevent others from getting in on their oil finds.

As a land acquisition manager for a major homebuilder, this market reeks of the same kind of bs that Wall St pulled with the real estate market.

While we all might be rooting for a commodities bubble to burst, I think that the unintended consequences might be far worse than $120 oil. If this market were to unwind rapidly, it would cause a fundamental breakdown to the counterparty risk models set up by Wall St, leading to more horrific writedowns and lots more pain for the financial industry and a bigger credit crunch than the one we had prior.

The deflationary problem with all of this is that the fed can't print enough money to resolve these market problems. Trillions of dollars of writedowns are far more deflationary than the billions that the fed can give banks