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The Backyard Market Games

Otherwise nervous and quasi-sensational, some markets gradually offer more and more opportunities for the number cruncher types as opposed to years-long catering for psychologists and prophets. Wednesday’s US Fed lackluster statement had evoked more questions than answers as far as overall market trend prediction is concerned. Pulling money out of naturally decayed MBS and putting them to the chain’s weakest link, i.e. 30 Yr Treasurys, can only draw the obstacle belt to a wary investor, but fails to address long term issues. As a matter of fact, wait-and-see attitude that evidently becoming sort of a new normal, refunds the luxury of choice to an investor – at least, temporarily. After month-long entertainment of seeing the BP stock floating against the market, now we enjoy at least a half-dozen canoes successfully paddling opposite the high river stream.
Apparently, sheer leaders remain in the camp of soft commodities. The news that the US Department of Agriculture had downgraded the world crop in 2010 sparked rallies not only in the well-spoken wheat futures, heated by Russian PM Putin’s warning concerning the grain export downsize, but in rather extravagant items like soybeans and palm oils, joined lately by Arabica coffee and sugar on concerns over the Pakistani flood. No matter how grim and hopeless are the world GDP predictions, commodities seem to have set up their own game making fun of the traditional markets’ persisting mega volatilities. It looks like metals, woods, materials and agricultural stuff are the new must-have things in your portfolio.
Meanwhile, domestic equities are also far from being uniformly dull in their downtrends. Thus, fratricidal war recharging the guns of Norilsk Nickel’s members of The Board and leading to the London arbitration court, offers a hint at ongoing stock price hikes. The most likely outcome of this mudslinging round would be the State’s attractive buyout offer to 25% stake owner tycoon Deripaska. The GMKN minority holders are in the upbeat mood.
Another headline event of the past week – rumored merger of FSU’s largest potash miners Uralkali, Silvinit and Belaruskali, that is thought to create world’s largest chemical fertilizer company, turns into a really exciting party attracting more and more flamboyant loiterers. OAO PhosAgro, the second-largest producer of phosphate-based fertilizers, wrote this week to the Russian government saying it’s interested in merging with Silvinit (SILV:RU). Global majors Rio Tinto and Potash Corp have expressed their keenness to buy into the former’s rival Uralkali (URKA:RU). Who’s next with the empty glasses?