Juggling Dynamite

The year-over-year rise in commodity prices into May has been the highest in 40-years (shown below since 1976 courtesy of Bloomberg–click for a close-up).
When we look at this chart, it’s worth noting that previous commodity price spikes were followed by sharp declines.  But why let past precedent inform herd inclinations to inflationary bias.

In typical trend-following form, seventy percent of global fund managers surveyed in April expect above-trend inflation to continue globally- also a multi-decade consensus high since at least 1994.  And yet, when financial experts all agree something else tends to happen.

A commodity mascot, the Loonie is once more testing at the .82 USD area that has proven upside resistance since 2015 (shown here courtesy of my partner Cory Venable). Will this time be different…hmmm…all eyes on the Loonie.

BNN Bloomberg speaks with Dennis Kelleher, co-founder, president and CEO of Better Markets, talks about what he calls a “significant lack of transparency in financial markets”. In part, due to former U.S. President Trump’s efforts to undue the Dodd-Frank Act. He also talks about how the banking system saw its first real-life stress test when the pandemic hit in March-April 2020.  Here is a direct video link.

Destructive financial incentives have wasted years of free cash on gimmicks like buybacks to boost share prices rather than productive long-term focused investment.  Then when high leverage implodes, as it always does eventually, the companies look to governments for bailouts.  We need to change course.  This segment offers some insight.

Car companies across the globe have had to idle production and workers because of a shortage of semiconductors, often referred to as microchips or just chips. They’re the tiny operating brains inside just about any modern device, like smartphones, hospital ventilators or fighter jets. The pandemic has sent chip demand soaring unexpectedly, as we bought computers and electronics to work, study, and play from home. But while more and more chips are needed in the U.S., fewer and fewer are manufactured here.

Intel is the biggest American chipmaker. Its most advanced fabrication plant, or fab for short, is located outside Phoenix, Arizona. New CEO, Pat Gelsinger, invited us on a tour to see how incredibly complex the manufacturing process is.

Here is a direct video link.