Juggling Dynamite

The trouble with most asset prices today is that they are quite simply inflated. The run up since March '09 means that many prices are over-shooting the reality of world demand by a significant margin at present. This chart of copper makes the point well:

Source: Bloomberg Finance L.P. via Ian Farrell
The nub of the matter is this. Even if you see some economic recovery ahead, prices have already discounted that and a good deal more. The anti-US dollar trade has been the catalyst for much of the price moves in risk assets the past several months. If the U dollar rebound continues for a bit, the threat of significant damage to stock and commodity prices should not be ignored.

Thanks to repeated requests for service from US residents over the past couple of years, I am pleased to announce that my money management company Venable Park Investment Counsel Inc. is now registered with the SEC and happily accepting US clients. To any US readers that are interested or have contacted us in the past and were told no, please do drop me an email to discuss your needs.

Neil Barofsky was interviewed by Dylan Ratigan tonight on MSNBC. Barofsky is going after the truth in the AIG debacle. He says civil and criminal prosecutions are in the pipeline and that he thinks there will be hand-cuffs coming for some. He also explains why Geithner's statements re tax payers being made whole on the AIG bail-out is untrue and misleading. This is the kind of truth seeking that must happen in order to fix this mess and assign blame where it is due. This is some of the most encouraging discussion I have heard so far. Ratigan keeps swinging for the truth in the maze of deceit. If enough people keep at this thing, we will finally get somewhere re the reforms and house cleaning needed.

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