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EconMatters's Blog

EconMatters - Global Economic and Market Analysis That Matters

Don't Give Up On Commodities Just Yet (Guest Post)

May 9, 2011 by EconMatters   Comments (0)

By Commodities Now The prices for many commodities suffered the worst week in recent memory at the start of May.  Oil prices dipped below $100 per barrel, gold fell below $1,500 an ounce and silver gave back much of the past month’s gains by falling to the $35 an ounce level. The prices for other commodities such as sugar, tin, nickel, aluminum, lead and copper also pulled back. Immediately, headlines on websites such as Marketwatch, Bloomberg and SmartMoney read “Has the Commodity Bubble Popped?” and “Imploding Commodities Complex.” So, Is this the end? Has the great...

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Going Behind The Rise in Oil and Food Prices (Guest Post)

May 8, 2011 by EconMatters   Comments (0)

By Ilene Danny Schechter at Al Jazeera, interviews Philip R. Davis, founder of Phil's Stock World, about excessive speculation in the oil markets. Speculators and free market believers may argue that they are not to blame, they are simply trying to make money by following the trends and not holding onto cash, as the Fed is busily devaluing the U.S. Dollar. There is some merit in that argument, but that doesn't solve the problem. Addressing the problem begins with identifying the underlying causes - what is enabling and encouraging so much speculation? What kind of...

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Is Euro Another Bullish Argument For Gold and Silver? (Guest Post)

May 8, 2011 by EconMatters   Comments (0)

By Ashraf Laidi This headline-charged first week of May has been dominated by the announced death of Osama Bin Laden, a historic 5-cent retreat in the euro and the greatest weekly decline in silver. But the week could have witnessed a positive transition (another one) in favour of precious metals. Here is why; The selloff in metals was initiated by a knee-jerk reaction to Osama Bin Laden's death on the argument that the safe haven trade in favour of precious metals may no longer valid. The gold and silver sell-off were limited to 5%, before a modest rebound ensued in Monday Europe. But...

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Gasoline Prices: Fast and Furious To Spike, But Slow and Reluctant to Fall? (Guest Post)

May 7, 2011 by EconMatters   Comments (0)

By Bob van der Valk This year's Cinco de Mayo Mexican holiday may go down in US oil trading history as the day the oil prices spun down into their biggest free fall. Oil traders have already started calling it: "Jueves de Carniceria", which loosely translates to "Killer Thursday". However, motorists looking for lower pump prices were disappointed when the average price for unleaded regular gasoline dropped a mere penny from $3.99 to $3.98 a gallon. The gasoline spot market prices are quick to react to any changes in the price of crude oil but there are a couple of steps in...

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Speculation Does Not Explain High Oil and Gasoline Prices? Please!!

May 7, 2011 by EconMatters   Comments (0)

By EconMatters WTI (West Texas Intermediate) Crude Oil futures traded at its lowest in almost two months in New York on Thursday, May 5 in its biggest selloff in two years, plunging 8.6% on the day to below the $100 mark (Fig. 1).  Brent crude on ICE also dropped as much as $12.17, or 10%, which was the largest in percentage terms not seen since the Lehman Brothers financial crisis, and the largest ever in absolute terms, according to FT. The epic waterfall was partly due to the combination of a strengthening dollar after European Central Bank President Jean-Claude Trichet...

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The Bin Laden Effect on the Oil and Gasoline Market (Guest Post)

May 5, 2011 by EconMatters   Comments (0)

By Bob van der Valk The oil market turned around this week and spot market gasoline and diesel prices in turn went back down the week of May 1, 2011. This goes against the grain of what usually happens when American Petroleum Industry (API) and Department of Energy (DOE) inventory reports show draws for both gasoline and diesel. The average price for unleaded gasoline in the US is $3.982 per gallon today and may touch $4 by this Friday. But the demand for gasoline is down with numbers from March showing a steep decline showing the effects of the ever increasing gasoline prices....

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Profitable Trade Setups for the Coming Gold, Silver and Dollar Reversals

May 2, 2011 by EconMatters   Comments (0)

By EconMatters (A Seeking Alpha exclusive) It is inevitable that there will be a sizable and significant correction in these three markets over the next six months, given the ending of the QE2 initiative in June and no imminent QE3 Initiative on the horizon. No longer will traders come in and buy the dips on weakness, but will revert back to the historical patterns of last summer, where they sold into market weakness which caused a substantial correction in risk assets....Read the full article at Seeking Alpha FREE  (Reprint or repost only with permission from Seeking...

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Charts Du Jour: A Sunday Vertical Drop of Gold, Silver, Platinum and Palladium

May 2, 2011 by EconMatters   Comments (0)

By EconMatters I was fully expecting a non-eventful Sunday afternoon when out of no where, precious metals started their contest of vertical drop, as shown int the following live charts from Kitco.com as of Sunday, May 1, around 7:00 pm EST.  As expected, silver is the undisputed champion, dropping about 10% from the previous day's close, glod, platinum each went down about 7.5%, while palladium lost about 2%. For now, there does not seem to be any significant event that could prompt such a move in precious metals. So, my...

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Exxon Q1: Who's Not Paying Fair Share of Taxes and Who's Ripe for Windfall Profit Tax? (Guest Post)

May 1, 2011 by EconMatters   Comments (0)

By Dr. Mark J. Perry ExxonMobil reported its first quarter 2011 earnings on April 28, which came in at $10.65 billion, an increase of 69% from the same quarter last year when it earned $6.3 billion. While the huge earnings amount captured all of the media attention, several other items received much less attention (see chart): ExxonMobil paid $8 billion in income taxes to various governments in the first quarter, which is about $22 million in income taxes each day, or almost $1 million each hour.  ExxonMobil spent $7.8 billion in the first quarter on capital equipment...

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Dubai 2011: A Real Estate Dream Bubble Crash (Guest Post)

May 1, 2011 by EconMatters   Comments (0)

By: Andrew_Butter If you drive out on the highway towards Abu Dhabi past the Jebel Ali Free Zone, look on the right and you will see, partly covered in sand, the remnants of the billboards that used to declare, “Where the Vision of Dubai Get’s Built”. I met a guy who claimed to have come up with that tag-line. He was a young American, very nice and very-very smart, based in New York working for a big-name branding company, with absolutely no clue of what Dubai is/was about. But he was making really good money, and that’s fundamentally what everything is about, in Dubai. That...

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