Roseman's Eruptions

Mighty Franc not a Curse on Exports

Zurich, Switzerland

Leaving Montreal weather with temperatures hovering around minus 20 degrees centigrade is easy. Most Canadians head south to avoid the cold; I head to Switzerland.

Of course, Zurich isn’t exactly Miami Beach. But the moment you step outside Zurich Klöten Airport, you immediately inhale that fresh, soothing Alpine air. The Swiss are so environmentally conscious that Lake Zurich is clean enough to drink. Now that’s clean.

Retail Managed Futures Funds a Bad Deal

Montreal, Canada

What you see is not necessarily what you get. Beware of recently introduced managed futures funds. They’re not what they appear to be.

Managed futures, or Commodity Trading Advisors (CTAs), oversee about $300 billion dollars worldwide and have been popular among high net-worth investors since the 1980s when Richard Dennis pioneered a trend-following strategy called “Turtle Trading.”

Most Stocks a Bad Bet if Inflation Surges

Montreal, Canada

Unless you’re over-weighted in commodity equities, the majority of stocks will struggle to stay above water ahead of the next inflation jolt. Yesterday’s market action might be a sign of tougher times ahead as we eventually shift from slowing disinflation to rising inflation.

Speaking just ahead of me at the Agora Wealth Symposium last July in Vancouver, Dr. Marc Faber delivered an excellent presentation.

Grains Revisited

- Dugald Malcolm, Montreal, Canada.

Last November I took a look at the various grain indices and subindices to examine whether or not the correction at the time presented investors with a buying opportunity. Sure enough, despite its then 60% gain from its lows in June, the Dow Jones/UBS Grains Index continued its upward trend. in fact, following the November correction the Index went on to climb a further 32% to its intraday high put in earlier last month.

The Grain Contra Trade

Montreal, Canada

The time might be approaching for a short-term trade betting against the hysteria enveloping the agriculture complex.

Until last week, the majority of macro and quant-strategy hedge funds were heavily long the grain trade. Reports late last week in The Financial Times show a slew of traders dumping the grains as financial markets tumbled; corn, soybeans, wheat and other grains rallied sharply on Friday following a big sell-off earlier in the week.

World’s Largest Palm Oil Processor Crushed by Soaring Costs, Chinese Food Controls

Montreal, Canada

Not every commodity bull market is created equally. And China isn’t necessarily friendly to every commodity trade.

Surging costs and Chinese price controls hit Wilmar International (Singapore-F34.SI) this week — the world’s largest palm oil processor.

Palm oil is ubiquitous in food consumption and found in virtually every processed food, including peanut butter, cookies, microwave popcorn and breakfast cereals, to name just a few items.

Bullish on Grilling

Montreal, Canada

U.S. livestock prices may reach records in the next two quarters as farmers reduce herds while China imports the most pork since at least 1992 and the largest amount of beef in three years, according to French bank, Societe Generale.

Only one sub-sector of the commodities bull market remains more than 35% off its best levels in 2008. And adjusted for inflation since its peak more than thirty years ago, it’s down almost twice that number. I’m talking about live cattle and lean hogs, otherwise known as the “meats.”

Buy Oil Drillers on Weakness as Pan-Arabian Revolution Spreads Across North Africa and the Middle East

Montreal, Canada

The macro shock engulfing world markets this morning might be a short-term affair, assuming Libya can transfer government control without a civil war. This seems unlikely. Libya, unlike the other North African and Middle Eastern states undergoing revolution, is a major oil-producing country in the region. Oil prices are running hard since Monday.

If Saudi Arabia engulfs, home to more than 20% of the world’s oil reserves, then it’s 1973 all over again as oil prices super-spike north of $125 very quickly. Again, this assumes the Saudi’s are next.

Commodities Might Undo Stocks

Montreal, Canada

Rising inflation and surging commodities prices might kill the ongoing stock market rally. It’s already hampering the once fast-growing MSCI Emerging Markets Index, down a modest 2.5% this year.

Mature economies, as measured by the MSCI World Index of major markets, now stand at their highest levels since July 2008 and have rallied 6.5% in 2011.

This year, the United States is one of the best performing markets in the world while the emerging markets largely struggle with inflation and central bank tightening.

Not (Soy) Great

Montreal, Canada

It’s almost impossible to peruse the financial press headlines these days without reading about food price inflation.

The United Nations Food & Agriculture Organization Index continues to hit new all-time highs each week since January and for the majority of frontier and emerging market populations, the cost of essential edibles is surging. The only daily staple that hasn’t skyrocketed is rice – which feeds more than 2 billion people every day. Rice harvests in Asia are plentiful, at least for now.