Either the Global Economy Is Heading Into Recession or Commodities Are About to Surge
First, I mentioned a couple days ago that
set a floor for stock prices on the benchmark exchange, moving to halt a plunge that has wiped out $36.9 billion of market value since April. Pakistan
Securities can trade within their daily limit of 5 percent ``but not below the floor-price level'' of yesterday's close.
Yes! That’s what I’ve always wanted – a stock market that can only go up. Don’t tell Bush about this solution or we may see it enacted on Wall Street.
In other news, Bloomberg really knows how to bury the lead in this next story. Check out what I’ve highlighted …
is facing the worst financial crisis since the Depression. You would never know that from the Democrats' platform in U.S. or its Republican counterpart, or from listening to Barack Obama or John McCain. Denver
XX Sean’ note – Splutter! Excuse me while I a do a spit-take, Bloomberg, but did you say the
The rest of that Bloomberg story is heavy on politics and light on economics. Seriously, I want a Bloomberg story detailing why they agree (with the folks at Weiss Research, who have been saying it for months) that the
Trade and financial linkages with the G-7 countries mean that
Asiais unlikely to remain unscathed. Asian economies dependent on exports to the US and Europe and having large current account surpluses (China, Taiwan, Hong Kong, Singapore and others) will suffer from the G-7 recession.
XX Sean's note -- unless, of course, the G-7 doesn't slide into recession. I only mention that because America's Q2 growth was revised much higher to 3.3%.
"Corn and soybeans have rebounded as reduced crop yields push
stockpiles to near five-year lows. Oil has reversed on U.S.-Russian tensions. Nickel has turned after Xstrata Plc closed a U.S. plant. Dominican Republic
The worst rout in the history of commodities may be ending, signaling a replay of the 2006 tumble that preceded a doubling of prices in the next 17 months as measured by the Standard & Poor's GSCI index. Only this time, the driver is supply cuts rather than increasing demand. Supply constraints are "coming more and more to the fore'' and that "will separate the performance of individual commodities," said Alan Heap, global commodity analyst at Citigroup Inc. in
. "We're still looking for higher prices next year and in some cases the year after." Sydney
XX Sean’s note – the same piece quotes a contrary view …
"The whole cycle that began around the turn of this century ended," said Michael Aronstein, chief investment strategist at Oscar Gruss & Son Inc. in
, who returned 15 percent a year in the 1990s managing commodity investments. "Human ingenuity creates productivity, and the real price of almost everything that's extracted or manufactured goes down over time. That's the nature of human progress." New York
Lead Climbs to Three-Week High on Speculation of Rebound in China Demand Lead rose to the highest in three weeks in London on speculation demand improved in China, the world's largest consumer and producer of the metal.
Crude Oil Rises a Fourth Day as Tropical Storm May Threaten Gulf Platforms Crude oil and natural gas rose as Royal Dutch Shell Plc, BP Plc and ConocoPhillips evacuated drilling rigs before the arrival of Gustav, forecast to become the worst Gulf of Mexico hurricane since Katrina.
Australia's Mining Boom Drives Faster-Than-Forecast Business Investment Australian business investment rose more than twice as much as economists forecast in the second quarter as mining companies spent extra on machinery and equipment to meet demand from China.