Commodities Essential - November 30, 2011

Another major financial crisis: 


Is it more than a year away? 


 


I suppose investors are looking for a reason to get bullish, since central bank easy money has been a popular driver of financial markets. But in looking back to December 2007 and September 2008 to see how these previous coordinated actions influenced markets for the weeks that followed, it seems investors may have a reason to get bearish, instead.


The optimism surrounding past central bank coordinated credit market injections lasted mere days, at best, and was followed up by sharp declines that lasted a few months. What’s to say it will be any different this time around now that the fragile state of the global economy is better known?


I suppose this combination of things: a renewed crisis and market collapse could still take some time to materialize since emergency measures (ala the bank bailout described above) can still be implemented by the Fed. And when you add in a US Presidential election year, the market’s fundamentals may be deferred until 2013. This is why we have to remain open to price action that does not validate the pitiful fundamental/economic outlook. 


But … 


Commodities Essential. 30 November 2011