« S&P 500 +3% Days During The Bear | Main | Geithner Gone Chatter »

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8349edae969e201116900784e970c

Listed below are links to weblogs that reference The Commodity Rebate:

Comments

Norman

Great analysis. Thanks.

dj

1st the bankster Media blame the little home buyer, now they blame tiny Tim the temp....

dj

For years he called economic crises' that didn't happen. Year after year and for different reasons each year he called it. He didn't even get this one at the time it happened.

He is creating the illusion of having called it just like he is creating the illusion he has slept with any of us young women in his pictures. He may have charmed the pants of you so you saw something as big that wasn't there but I kept my pants on.

Go to google news, look at news from 2003, 2004, 2005... you will see.... The 2004 vintage, as example:

One recent paper by Nouriel Roubini and Brad Setser reported, "If current trends continue, Asian central bank reserves would have to rise from an estimated US$2.4 trillion at the end of 2004 to US$4.3 trillion at the end of 2008 to help support a rise in US net external debt from US$3.3 trillion to US$6.9 trillion." However, the report warned, as US deficits rise, private investors will likely pull back from buying into US debt – forcing the Fed to intervene massively to shore up the dollar. In a recent Economist special article, Fred Bergsten cited a projection of the current account deficit of 10 percent of GDP in 3 to 4 years – that would be US$1500 trillion per year in financing needs! Amounts of this magnitude would be impossible to finance."

Or the 2005, vintage:
In a very real sense, the U.S. economy is dependent on the central banks of Japan, China and other nations to invest in U.S. Treasuries and keep American interest rates down. The low rates here keep American consumers buying imported goods. But the lack of fiscal discipline in the United States is undermining the value of the American dollar, thereby lowering the value of the U.S. Treasuries in foreign banks. As the dollar's value drops, other nations' willingness to keep investing cannot last, says Nouriel Roubini, an economics professor at New York University.If those banks reduced their dollar holdings or were simply less willing to invest so much, it could spark a sharp fall in the value of the dollar. And that could create a host of economic problems...In the end, Roubini, Walker and others say, disaster is still avoidable, but it's going to require the American people and the country's leaders to clean financial house -- to reduce the federal deficit and the trade deficit. "

Even in 2006:
"Our ability to finance ourselves depends upon the willingness of foreign central banks to hold dollars. That willingness is going to be shrinking (this) year," Roubini says."

So, yes, Nouriel changed his tune in the second half of 2006 and started saying it would be housing that would bust. He was not the first to predict that.

And, as sure as my pubes are black, it wasn't housing or the real economy that dragged us down - it was the the credit market...

rws

If the average consumer bought wheat directly from the farmer and oil directly from the sheik, your analysis might hold up.

If cereal companies maintain supermarket prices while paying less for wheat, and refiners hold constant - or raise - the price of refined gasoline at the pump while paying less for crude, your commodities math isn't going to translate into money saved by the consumer.

The comments to this entry are closed.

Bespoke

Our View

Bespoke Premium

In The News

Premium Site

  • Morning Lineup
  • Short Interest
  • Upgrades/Downgrades
  • Sector Snapshot
  • Daily ETF Trends
  • Weekly Review
  • Economic Indicators
  • Trade of the Day
  • Bespoke Stock Scores
  • Daily Market Model
  • Daily Strategy
  • Daily Stock Odds
  • Market Studies