We've seen commodities turned into facsimiles of stocks, something they were never designed to be.
"That strong bounce we have seen in commodities over the past three months is probably a little ahead of itself," says Gerard Klingman, president of Klingman & Associates.
I contend that the decline we have seen in commodities has been a consequence of deleveraging and the self-feeding process of liquidation brought on by highly leveraged institutions finding themselves at the door of bankruptcy, selling everything and anything to raise needed cash.
First, we have seen similar rallies in commodity prices fizzle out many times in the past couple of years.
We have seen further selling of commodity and oil sectors as concerns worsen over the potential effects a global recession could have on demand for metals.
The power, cost, and energy use involved in one unit of computation is declining at a more consistent, dependable rate than we have seen with any other commodity in human history.
Thus growth expectations have fallen by 4 percentage points, as the map's colouring shows.Some countries, especially those that are still very dependent on commodities, have seen bigger downgrades.
Substitution of cheaper ingredients for expensive materials was a recurring problem with meat and dairy products – both sectors that have seen steep price rises on commodity markets.
