Oil is plumbing fresh cycle lows this morning, with West Texas Crude touching into the $52 range ($37 range for Western Cdn select) in the last hour. But it’s not just oil (black line) and natural gas that are imploding with global growth forecasts (gold line below).
Chart source: zerohedge.com
Grotesquely contorted, financialized, stock-piled, ‘fixed’ and rigged by bankers and traders over the past decade, even copper is finally giving up on the recovering demand narrative. See: Copper falls to a 4 1/2 year low. The steady inflow to US Treasuries is continuing to flatten the yield curve (red above) despite Herculean maneuvers of the US Fed to keep it optimistically upward slopping.
Recession and deflation are spreading over the developed world. See: Europe deflation fears back, Japan is in recession, Russia and Venezuela are following suit, China might be growing at half its 2007 rate. Brazil, Canada and Mexico’s economies are all rediscovering their energy Achilles’ heal.
Last hold ups–the S&P 500 (in green above) and Canadian bank shares (purple below)–are now both staring into the vortex of a tanking energy sector to which they are inextricably tied. Reality beckons wildly over-valued assets much lower. Those with a discipline for value are coming into the most rewarding phase of the cycle.
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