I'm only rich because I know when I'm wrong.

George Soros.

From The Fox Street Journal

Speculative traders' interest in crude oil has grown to the point that they now account for roughly 70% of all trading in West Texas Intermediate crude on the New York Mercantile Exchange, compared with 37% in 2000, according to an investigation by a congressional subcommittee that forms part of an escalating political assault on Wall Street's role in the run-up in oil prices.

I finally got around to reading Michael Masters' testimony to Congress on rising prices in the commodities market.  It is worth the read.

Exerts

Courtesy Greg Mankiw

In a speech today, Treasury Secretary Hank Paulsen stated that the government wanted to limit the perception that some banks are too big to fail.

There is only one way to change this perception.

Let a big bank fail.

Cool graph from Forbes on the real price of oil, via Paul Kedrosky.

I would personally like to thank those investors who are willing to invest in any stock as long as it is rising, preferably at a really, really fast rate; who ignore economics and valuations; who ignore politics; who believe it is different this time or could not care less; and who think potash prices are going to stay at $800 a ton for any appreciable length of time.  Without you, none of this would be possible.

Bubble 3.0 is in full swing.

Two year returns off the bottom in June/July 2006 for five fertilizer stocks.

Agrium (AGU)  426%
CF Industries (CF) 1214%
Mosaic (MOS)  1048%
Potash Corp (POT)  783%
Terra Industries (TRA)  829%

Returns over the past 16 trading days

Agrium (AGU)  38%
CF Industries (CF) 39%
Mosaic (MOS)  42%
Potash Corp (POT)  28%
Terra Industries (TRA)  45%

No mania here.

I own Potash Corp.  I am a seller.

While commodities go parabolic, the Chinese stock market has been cut in half.  Stocks don’t fall 50% or more if something in the economy isn’t happening. 

As I enjoy a bottle of my new favourite summer beer, Stella Artois, I am reading this article about August Anheuser Busch IV, the current CEO of Anheuser Busch.