Sunday , November 17 2019
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Tag Archives: commodities

The Oil Mystery Undermining An Aramco IPO

Lambert here: Hard to imagine buying an enormous store selling hard goods without taking a physical inventory, it is true. Over-simplified? By Kurt Cobb, a freelance writer and communications consultant who writes frequently about energy and environment. His work has also appeared in The Christian Science Monitor, Resilience, Le Monde Diplomatique, TalkMarkets, Investing.com, Business Insider and many other places. He is currently a fellow of the Arthur Morgan Institute for Community...

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Monthly Macro Monitor: Market Indicators Review

Is the recession scare over? Can we all come out from under our desks now? The market based economic indicators I follow have improved since my last update two months ago. The 10-year Treasury rate has moved 40 basis points off its low. Real interest rates have moved up as well but not quite as much. The difference is reflected in slightly higher inflation expectations. The yield curve has also steepened as the 10-year Treasury yield rose faster than the 2-year. This is not the type of...

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Tidbits Of Further Warnings: Houston, We (Still) Have A (Repo) Problem

Despite the name, the Fed doesn’t actually intervene in the US$ repo market. I know they called them overnight repo operations, but that’s only because they mimic repo transactions not because the central bank is conducting them in that specific place. What really happened was FRBNY allotting bank reserves (in exchange for UST, MBS, and agency collateral) only to the 24 primary dealers. These were repos only between those entities and the Federal Reserve. It had nothing directly to do with...

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Copper Confirmed

Copper prices behave more deliberately than perhaps prices in other commodity markets. Like gold, it is still set by a mix of economic (meaning physical) and financial (meaning collateral and financing). Unlike gold, there doesn’t seem to be any rush to get to wherever the commodity market is going. Over the last several years, it has been more long periods of sideways. That’s what makes any potential breakout noteworthy. Dr. Copper’s place in the hierarchy is already assured because of its...

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Gold: Big Difference Which Kind of Hedge It Truly Is

It isn’t inflation which is driving gold higher, at least not the current levels of inflation. According to the latest update from the Bureau of Economic Analysis, the Federal Reserve’s preferred inflation calculation, the PCE Deflator, continues to significantly undershoot. Monetary policy explicitly calls for that rate to be consistent around 2%, an outcome policymakers keep saying they expect but one that never happens. For the month of July 2019, the index increased 1.38% year-over-year....

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Monthly Macro Monitor: Market Indicators Review

This is a companion piece to last week’s Monthly Macro report found here. The Treasury market continues to price in lower nominal and real growth. The stress, the urgency, I see in some of these markets is certainly concerning and consistent with what we have seen in the past at the onset of recession. The move in Treasuries is by some measures, as extreme as the fall of 2008 when we were in a full blown panic. That to me, is evidence that this move is overly emotional since the...

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The Corroboration and Costs of Fear Gold

Gold is the ultimate hedge, but it is far from perfect. Unlike, say, sovereign bonds there should be no expectation for a negatively correlated price. You can buy a UST or German bund even at negative yields and at least expect the price to rise when things are at their worst. Flight to safety or flight to liquidity. You can’t with gold. One big reason is its seemingly opposing uses. I got a chance to sit down once again with Erik Townsend of MacroVoices to talk about gold, negative rates,...

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The Amazon is Burning at a Record Rate

Jerri-Lynn here. This Real News Network interview with Amazon Watch’s Christian Poirier discusses Bolsonaro’s policies that prioritize agribusiness over people – especially indigenous people. DHARNA NOOR: It’s The Real News. I’m Dharna Noor. The Amazon Rainforest is burning at a record rate. The fires are so big that you can see the smoke from NASA space satellites. On Monday, the sky turned black over the city of Sao Paolo, Brazil and meteorologists found that the smoke...

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China’s Ultimate Play For Global Oil Market Control

Lambert here: “Both MBS and MBZ consider the last-minute cancellation of the US retaliatory strike [for Iran shooting down a US drone] a personal affront and humiliation because Trump did not accept and follow their positions and demands for action. Both MBS and MBZ are now convinced that not only the US demonstrated weakness and lack of resolve, but that Pres. Trump was personally not committed to fighting Iran on behalf of Saudi Arabia and the Gulf sheikhdoms.” Oh, let’s you and him fight!...

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COT Black: Not Transitory, The Landmine In Crude Means A Lot More Than Crude

Supply glut or demand disappearing? We are back to asking that question again after four years. In late 2014 and early 2015, the conventional answer was shale. The US had begun producing so much oil there was a glut of supply. Without an outlet for it, all the crude began building up primarily in Cushing, OK. All that was true but also never came close to explaining the oil crash. What changed wasn’t supply it was demand. The oil futures market had known about the onrush of additional crude...

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