Roseman's Eruptions

Commodities Enter Super-Spike Phase

Montreal, Canada

Since hitting a low last July, the benchmark Reuters-CRB Index of 19 commodities has surged 29%. The widely followed CRB Index is now at its highest level since the credit crisis but remains 29% below its all-time high recorded in July 2008.

Commodities are hot, red hot. You could say we’ve entered the “super-spike” phase over the last six months, triggered by the Fed’s desire to print more currency and grow inflation. Just about everything in the complex has been rocketing since last August.

Founding Co-Father of EUR Bearish on Monetary Union

Montreal, Canada

Anyone following the EUR’s advent in 1999 knows his name. He’s as ubiquitous among European currency pundits as the Big Mac is to millions of people worldwide who consume the famous burger every single day.

Otmar Issing, one of the founding fathers of the European Monetary Union (EMU), just released an essay on the future of the single currency and is not optimistic about its viability.

First Potash, Now Danisco as Food Inputs Head into Bull Market Overdrive

Montreal, Canada

DuPont Corporation (NYSE-DD) is setting the bar pretty high as the food mergers and acquisitions theme heads into bull market territory in early 2011.

Flood of Supply Hits West Texas Crude as Brent Oil Dominates Performance

Over the last 12 months the price of London-traded Brent crude oil has outpaced New-York traded West Texas Intermediate crude oil (WTI) by ten percentage points. That’s a serious divergence in performance, considering both contracts trade the same commodity.

Lessons from Ancient Rome

Montreal, Canada

The global exchange rate system as we know is a pathetic mechanism that relies on an outdated monetary regime that must be replaced. The U.S. dollar is no longer a reliable anchor and other majors, like the EUR, the pound and the yen, are the equivalent of a “bunch of drunks” sharing the same drink as the United States. The system is no good.

Every year, a host of currencies — both developed and emerging economies alike — are devalued or revalued. Currency volatility is out of control.

The Natural Resource Flip-Flop: Materials Expensive, Energy Undervalued

Montreal, Canada

The materials sector is now frothy. For value-based investors in the natural resources complex, now is the time to switch from expensive basic materials stocks into energy stocks – especially the oil drillers and junior and mid-cap oil and gas companies.

Copper, which ranks as the most widely followed among base metals, has begun a correction along with most of the complex since Tuesday. The correction has been quite modest by historical standards, with most companies still only a few points below their all-time highs recorded last month.

Shrewd Swiss National Bank (SNB) Excludes Irish Government Bonds

Montreal, Canada

The Swiss National Bank (SNB) isn’t helping to calm jittery European government debt markets.

This morning, the SNB announced that it would exclude future Irish government securities from its portfolio. That marks the first time a European central bank outside of the eurozone has officially refused to own a sovereign debt instrument.

The news didn’t affect Irish government yields.

ExxonMobil’s Multi-Billion Dollar Wager

Miami Beach, Florida

Don’t Buy Commodities Now

Miami Beach, Florida

Commodities and common stocks continue to show a strong correlation to each other since 2007. And that might be bad news for commodity bulls if stocks head sharply lower in January as virtually every sentiment indicator I track flashes “overbought.”

Since the advent of the credit crisis in mid-2007, the “risk on” and “risk off” trading relationship has forced these two asset classes into the same bed. That means more often than not that their performance is intertwined.

Tight Supplies Pushing Commodities Higher; Portugal Runs out of Sugar

Montreal, Canada

Breakfast used to be inexpensive. Not anymore…

Increasingly, farmers will struggle to meet the growing demand for grains and soft agricultural commodities. Several foodstuffs are now in record territory as we shortly close out 2010 and more will turn into net supply deficit as the world continues to outgrow its food supplies.