Brahm

Friday Outlook: Commodities, Global Markets

You hit it right this time! Most of the maladies we have been encumbered with can go away with something like the old Glass-Steagle in place again. However, you are also right that this will never happen. We have the best set of politicians (and surprisingly this "people's" administration) and lobbyists on K Street that Wall Street money can corrupt.

Geopolitical Energy: Centered on the Caspian Sea (Part 2 of 2)

Good analysis, but perhaps somewhat skewed in parts. You failed to mention that besides the oil/gas concessions in Iraq for BP, Exxon, Shell and Chevron, the current Iraqi govt has also given concessions to Chinese companies and others. Future Iraqi governments are unlikely to skew their energy policy, especially issues on exploration and production rights, solely in favour of Western companies. Other nations' (state companies) have not been aggressive bidders yet due to fluid and unsettled circumstances in Iraq currently.

As Europe's dependence on Russia and Central Asian energy increases with time, a divergence in approach to Central Asia and Iran will most likely increase between the US and the Europeans. One can see the nuances of this divergence even now.

Tuesday Outlook: Commodities, Emerging Markets, More

David Fry presents excellent analysis as usual. However, dumping on the speaker ain't cute at all. Perhaps, dumping on the scrumptious crowd that implicitly said "She hurt our feelings and exposed our hypocrisy of the last 25 years of pinhead economics" is probably more to the point.

Waiting for Financials' Other Shoe to Drop

Bill Chara is an astute observer/commentator without the usual verbosity that often comes with analysis provided by many. The other shoe is yet to fall, and understandably a few others before the burdens are fully removed from the financial sector and the economy. Financial companies do not usuallydispose off their crown jewels when markets are limp. And, as has often been observed off and on crown jewels of a diverse nature and in diverse sectors.

Is the Commodities Bull Market Over?

For commodities other than food, I prefer to forget Jim Rodger's 18 year cycle theory. The conditioins are quite different now with regard to supply and demand. Prior to 2000, the major consumers were primarily the US, Japan and Europe. These regions, more or less, had predictable demand, economic cycles, and growth rates. Despite their growth rates, supply was always ample, or new capacity could be created expeditiously in a predictable manner.. Potential mines/fields were relatively plentiful to meet the demand, except if at all during brief periods. And the potential resources base were rich also, and needed less investment and shorter lead times to develop for new production..

Conditions have changed dramatically. There are many more consuming nations growing at very high rates, and demanding supply to respond to growing consumption rates and even still much higher investment rates for development of national infrastructure for which some of these commodities are essential.. At the same time.available new resource sources are of lower quality and smaller squantity with regard to total extraction potential. Nationalism is also rampant now, and access to these new sources is not that easy or even attrative as it used to be quite often. Long lead in relation to the urgency of demand for developing known projects are almost legend now.

Intuitively I surmise the changed circumstances and conditions should have a profound effect on the applicability of Jim Rodger's commodity cycle theory in the context of the prevalent reality.. I agree with the author that the fundamentals are still there, and at this moment sentiment is a better explanation for the major part of the recent slide in commodities.