News

June 29, 2009

What The Fox And The Hedgehog Tell Us About Commodities: It’s All About Inventories

By Rob Davies

Trying to analyse current conditions in various financial markets isn’t easy, and commodities markets are no exception. The online and offline financial press is full of comments from gurus and experts with all manner of prognostications about the likely evolution of events. Some, like Albert Edwards of Société Générale, think that the Chinese economy will be much slower in the second half than many expect. That of course begs the question of what people actually do expect, and how many experts it takes to make an expectation.

Clearly, investors who have pushed the Chinese stock market up nine per cent this year take a more optimistic view of events than Mr Edwards.  But few organisations can claim more experts than the Organisation of Economic Co-operation and Development (OECD), and the OECD now takes the view that the global outlook is improving for the first time in two years. It believes OECD economies are near the bottom, but also concedes the recovery will be slow.  A projected implosion of...