Wednesday, August 13, 2008
Wow. He talks just like those USA Today reporters write. I thought they were supposed to be smart over there at Minyanville - you kind of expect that sort of thing at USA Today, but at Minyanville?
Though not a regular reader, I've come across enough good material there in recent years to have a generally favorable opinion of the work that appears there.
Maybe that opinion will have to be reassessed.
Executive editor Kevin Depew was just on PBS's Nightly Business Report with Paul Kangas and had this to say on the subject of commodity prices:
We've talked so much about a bear market that may or may not be happening in equities and there's really another bear market that's happening right under our noses.Uh... there's a 20 percent decline in the price of oil just about every year...
If you look at crude oil prices from the mid-July peak, they're down about 20 percent, as of yesterday at the close, they were down 20 percent. So, that's the definition of a bear market, that minus 20 percent move.
We're seeing commodities come down 15 percent, using the CRB commodities index, gold's down almost 15 or 16 percent as well. This is really a global demand story where demand is beginning to slow in response to tighter credit conditions.
That's not to say that the price of oil won't go lower from here - that recent run-up was both long and powerful - but 20 percent declines for commodities and 20 percent declines for equities are two completely different things.