vanity: massive fall in commodities across the board

various | 9-11-06 | self

[staytrue]

Commodities of all types are falling big today.

Oil down over a dollar.

Gold down 23 dollars.

Silver down a dollar.

Grains and meats are down.

sugar, cotton, orange juice, lumber down also.

Cocoa and live hogs are about even.

[Protagoras]

True, but grossly overpriced oil based on speculators and politics is a fun that needs to be ended.

Politics perhaps. That is if you consider OPEC moves to be political.

The speculation angle is nonsense. It reflects a fundamental misunderstanding of the long term macro price movement.

And "overpriced" is a word that is defined by each person based on their opinion or whether they are a buyer or seller of oil.

People will only pay what it is worth to them. Sellers will always get the highest price possible. It's not that hard.

[pissant]

Since I'm a BUYER of oil, it is grossly overpriced. The increase in consumption in the last couple of years worldwide has not even outstripped the increase in supply. Speculation is rampant. Oh,,,,could Iran cause more trouble. Oh,,,,will OPEC cut production to keep prices high. Oh,,,,will ANWR be opened to drilling. Oh,,,,,will the hurricane season wipe Louisiana off the map due to global warming. It goes on and on.

http://www.gasandoil.com/goc/features/fex53581.htm

[finnigan2]

"I'm somewhat amused by the notion that, because these commodities' prices are falling, folks are losing their shirts. Of course it's true, but what about the ones scoring big at the same time?"

- Yes, the market is a zero sum game. From the sounds of the commodities most effected (gold, platinum), these are speculative investments so speculators will be the most hurt. Also, gold is a traditional investment hedge against concern over high inflation. Perhaps the market feels that the inflation fears are exaggerated and everybody's bailing.

[pointsal]

What did ROVE do now?

[jmq]

I'm buying a Hummer....

[NordP]

I like your attitude!

I'm still curious as to why this is happening...somebody know something we don't? and if "they" do, and it's for terror-related reasons...why aren't they sharing, to help keep America safe instead of worrying about their own $$ behinds alone.

[rhombus]

It's the vast right wing computer empire. Diebold, diebold, diebold. :-)

[Cicero]

Check the seasonal averages. Gold normally rises in September, mostly ahead of Christmas shopping and, more important, the wedding season in India.

But not this year.

[Cicero]

For what it's worth, the price of basic energy at the wholesale level or on the commodity exchanges has just fallen over a cliff these past few days, after oscillating for month or two.

[Cicero]

For a pretty good picture of the waterfall these past few days in gold and energy shares, see these charts by Jack Chan:

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID530404

[FastCoyote]

my copper stock in Phelps Dodge dropped $7.00 Ouch

[griswold3]

Price war in Urbana,OH. All prices at $2.19, will the Clark Station go lower?

[proud American in Canada]

I was thinking about buying some gold trees for my own use..

LOL! I'd like one or two of those myself. :)

Your post puts a new spin on my parents' old expression: "Money doesn't grow on trees." :)

[billhilly]

"Price war in Urbana,OH. All prices at $2.19, will the Clark Station go lower?"

For once we can agree with the democrats theme song. Happy days are here again. The democrats may not think so, however.

[JasonC]

Oil peaked in July. It is down 15%. Silver has dropped 16% in the last 3 trading days alone. There was a huge security premium in commodities prices on war fears over Iran. Those are fizzling, and the doomster longs are capitulating. Oil could drop to $40 very quickly on fundamentals - it never needed to be this high to balance supply and demand, and stocks have built continually at the recent high prices.

Easy money out of Japan especially, and low interest rates world wide, have spawned bubble after bubble in speculative assets. Stocks cratered 5 years ago and have been sane for the last 3, as earnings have risen to justify recovered prices. Houses were next but have topped. Commodities went parabolic a little less than a year ago and are now crashing. Commercial real estate is still going for the moment, and government bonds remain the most overpriced stuff on the planet.

There has also been massive politically motivate doom mongering out there, with people trading a fine economy like it is the end of the world. It isn't, and markets will adjust and take their money.

[prairiebreeze]

At least some of these commodities had gotten waaay over-inflated. The commodity markets have been slumping for about 3 weeks, I believe.

[JasonC]

People feared a war with Iran over the nuke stuff. It hasn't happened, they are "long and wrong". So much of the past year's craziness in commodities was scaremongering stuff and politically motivated, it was not sustainable.

[ElTiante]

It sounds perfect to me. Specially that oil drop. May it continue its downward spiral until I'm paying 1.35 again for gas.

Tru dat!

I've been just dying to get a lightly used 77-79 Lincoln Mark V. Stright Pimpin!

[pissant]

LOL. And to think of all the $$ we can then spend on a real precious commodity....beer.

[fortunecookie]

This across the board massacre smells like someone or something big is in trouble and needs to liquidate.

I think it probably had more to do with the 9-11 Anniversary and oil price/barrel down a bit. The Dow and Nasdaq finished with small gains, although declines led over advances for both, and other industries, notably home furnishings, were up. I don't know if that's a massacre.