Tuesday, July 2, 2013

Black Swan Capital: Commodities and the path forward

"For a generation, when forced to choose between Middle America and corporate America, on NAFTA, most-favored nation for China, and free trade, the GOP establishment opted to go with the Fortune 500. In the GOP the corporate conservative rides up front; the social, cultural and patriotic conservatives in the back of the bus."  -Pat Buchanan



I think JPMorgan would be foolish (or devious) to look past the glaring problem, i.e. things ARE different this time.

Last time they made such an about-face with their view on commodities, the quantitative easing era was still in its infancy. Clearly that is not the case now. (While I don't suspect the Fed is on its way out of markets just yet, the seed has been planted by Fed tapering rhetoric and the latest BIS annual report to suggest QE cannot actually go to infinity lest its benefits become risks.) Basically, expectations have changed enough to question the relevancy of their last overweight forecast.

And things are different in China as well. First, to JPMorgan's words ... 

Currency Currents 27 June 2013

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