Commodities

Copper Confirmed

By |2019-09-03T19:33:19-04:00September 3rd, 2019|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

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 [...]

Gold: Big Difference Which Kind of Hedge It Truly Is

By |2019-08-30T16:16:19-04:00August 30th, 2019|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

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 [...]

Monthly Macro Monitor: Market Indicators Review

By |2019-08-29T16:08:52-04:00August 29th, 2019|Alhambra Research, Bonds, Commodities, Currencies, Markets|

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 [...]

The Corroboration and Costs of Fear Gold

By |2019-08-27T17:02:18-04:00August 27th, 2019|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

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 [...]

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

By |2019-08-07T10:57:12-04:00August 7th, 2019|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

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, [...]

Monthly Macro Monitor: Market Indicators Review

By |2019-07-19T18:19:10-04:00July 19th, 2019|Alhambra Research, Bonds, Commodities, Currencies, Economy, Markets|

The markets we use to monitor the economy (and those that influence it, which amounts to the same thing) have been tracking an economic slowdown since the 4th quarter of last year. That's when interest rates, real and nominal, long term and short term, started to decline, credit spreads started to widen and the copper [...]

The Lying Statistics Behind Globally Synchronized Growth, And What It Could Mean For The Globally Synchronized Downturn

By |2019-07-12T16:08:40-04:00July 12th, 2019|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Numbers really don’t tell us much all by themselves. Context always matters. That’s why 19th century British statesman Benjamin Disraeli claimed there are three kinds of lies; lies, damned lies, and statistics. Numbers employed in isolation are either misleading or useless. In the 20th century, Darrell Huff wrote in his classic How To Lie With [...]

Copper And Oil Walked Out On The Last Puppet Show

By |2019-06-05T16:07:26-04:00June 5th, 2019|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Where have you gone, green shoots? The Fed turned dovish, a bunch of transitory factors, and, above all, so much Chinese stimulus. That’s what got everyone through the winter. Markets were truly harsh to end 2018, a sharp slap in the face after all year the unemployment rate. One of the big ones that seemed [...]

Chart (Deluge) Of The Month

By |2019-05-24T16:44:54-04:00May 24th, 2019|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

In Europe, the ECB’s minutes for its April 2019 meeting claimed: Financial market developments, which were typically more forward looking, were more upbeat. In the US, the Federal Reserve’s minutes for its April 2019 meeting claimed: Participants noted that even if global economic and financial conditions continued to improve, a patient approach would likely remain [...]

What About Copper?

By |2019-05-22T16:38:44-04:00May 22nd, 2019|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The FOMC hates the bond market. Hates everything about it, especially how it tells these Economists they don’t know what they are doing. Monetary policy being little more than a vanity project, that’s not going to work for the people practicing it. OK, if you don’t like bonds then how about something else besides the [...]