Oil, copper and lumber are all telling us the correct exact same issue, and it isn’t excellent information for the world economy. When financial exercise is booming, desire for commodities these types of as oil, copper and lumber goes up and that usually will cause rates to rise. But when economic exercise is slowing down, desire for such commodities falls and that commonly leads to prices to drop. In latest months, we have witnessed a drop in commodity costs unlike nearly anything that we have witnessed in a long time, and lots of are anxious that this is a very clear indication that really hard situations are ahead for the worldwide financial system.
Let us speak about oil initially. The price tag of oil peaked in early Oct, but due to the fact that time it has fallen extra than 25 per cent, and the IEA is warning of “relatively weak” demand out of Asia and Europe…
The Global Electrical power Agency claimed on Wednesday that though US demand for oil has been “very robust,” desire in Europe and developed Asian international locations “continues to be somewhat weak.” The IEA also warned of a “slowdown” in demand from customers in acquiring nations these kinds of as India, Brazil and Argentina brought about by superior oil charges, weak currencies and deteriorating economic exercise.
“The outlook for the worldwide economic system has deteriorated,” the IEA wrote.
Meanwhile, the price of copper has been declining for fairly some time now. The value of copper also fell significantly just in advance of the last economic downturn, and a lot of analysts are pointing out that “Dr. Copper” is now waving a purple flag as soon as once again…
The information of weakening demand on the oil front was reinforced by the falling rate of copper. The base metallic is typically referred to as “Dr. Copper” on its presumed ability to forecast the peaks and troughs of small business cycles since it is utilized in unique parts of the overall economy these as properties, factories and electrical energy generation. Copper has served as a foremost indicator of each recessions and economic booms.
The price of lumber is a “third witness” that indicates that big trouble is looming.
Very last thirty day period, lumber dropped additional than 10 percent, and that was the biggest regular monthly drop that we have seen in a lot more than 7 yrs…
In October, rates for softwood lumber in the U.S. dropped 10.3% – the major decline since May perhaps 2011, in accordance to the Producer Cost Index (PPI) launch by the Bureau of Labor Stats. The producer price index for softwood lumber has fallen 21.2% given that location the cycle and all-time higher in June.
If oil, copper and lumber are all telling us the similar issue concurrently, don’t you consider that we really should be listening?
At this point, even Bloomberg is admitting that the world wide financial system is heading towards “a generalized slowdown”…
These developments propose the synchronized progress that the world economic climate has liked in current decades is possible to be changed by a generalized slowdown. Just acquire a glimpse at the knowledge out of Japan and Germany this 7 days, which confirmed the world’s 3rd- and fourth-greatest economies contracted in the third quarter.
How lots of signals is it going to consider ahead of persons start out comprehension what is taking place?
Wells Fargo just notified about 1,000 personnel that they will be laid off. Career losses are starting to mount, and it is likely that we will start off to see these types of information stories on an pretty much every day foundation now.
And as the shaking on Wall Avenue accelerates, we are going to see much more fiscal firms get into hassle. In reality, we just witnessed the full collapse of OptionSellers.com. The pursuing will come from a notice that they despatched to traders informing them that they misplaced all their dollars and that the firm is remaining liquidated…
I am producing to give you an update on the condition right here with your account.
We have spent the 7 days unwinding our quick all-natural gas call posture as expediently as attainable.
Today which was to be the final day of liquidation, the current market flared as costs look to have been caught in a “short squeeze.”
The speed at which it took location is really over and above anything I have seen in my profession. It overran our danger management units and still left us at the mercy of the industry.
In short, it was a rogue wave and it overcome us.
Regretably, this has resulted in a catastrophic decline.
Our clearing organization, FC Stone now demands us to liquidate all positions. We hoped to have this completed these days. If not, it will be accomplished tomorrow.
Your account could probably be dealing with a debit stability as of tomorrow. OptionSellers.com will be processing fee credits above the system of the coming days to help reduce debit balances. What these will be will be decided right after all positions are cleared.
This has in effect, crippled the business. At this issue, our brokers at FC Stone have been assisting us in liquidation.
Our places of work will stay open and we will all even now be here to remedy your thoughts and process account closings. We will do every thing in our ability to relieve what irritation we can.
I am really sorry this has occurred.
I will be updating you again by means of memo in 24 several hours.
People investors are among the the to start with to be fully wiped out, but they certainly will not be the final.
The ironic issue is that Individuals are much less involved about yet another crisis than they have been at any position considering that 2008 at a time when they really should be much more focused on finding well prepared than ever.
You know that it is definitely late in the video game when even Jim Cramer of CNBC is saying that the U.S. overall economy is genuinely slowing down. A couple of of my readers wrote me immediately after that posting for the reason that they didn’t like the point that I experienced quoted Jim Cramer. But I don’t feel that they seriously got my place. I was not endorsing Jim Cramer as some kind of fiscal guru. Rather, I was pointing out that even mainstream media stars that have been earlier cheerleaders for the economic system are now recognizing the reality of what we are struggling with.
International financial exercise is slowing down, and things are shifting extremely rapidly now. The temperature is now acquiring pretty chilly, the mood of the country is very darkish, and it would only just take a extremely compact press to deliver us fully tumbling around the edge.