Re: Market's job, making everybody wrong
jr.....I think it is IMPERATIVE for everyone is society to get long-term interest rates locked down and lowered. No way the FED can play this game much longer, direct and expensive manipulation of interest rates.
You can lower your FCS farm mortage with a simple phone call which most people don't know apparently. Yes, there is a small fee, but we just rolled down a 7% to 5.15% 30 year loan. Take what the market gives you, and regardless of your fears about the future, there is a sEVER risk of higher interest rates. Too late in the cycle for bonds to continue to rally if commods and stocks are as well. Unlike past cycles, when rates turn, they will do it just like wheat just did, 28 days might produce a HUGE change in values.
So, do the importtant thing first, long rates.
Lastly, our expectation back last December was for the market to behave very similar the election year of 1980. So far, even the weather has been similar and the markets have been identical really.
I certainly share Hardbody's concern about the future as the house of cards of soverign debt will certainly be a problem. I also share Palouser's optimism about natural resource issues and increasing demand from emerging markets. Land prices will keep rising for some time yet. So, it is a recipe for volatility which we happen to greatly enjoy in our approach to risk management.
Current Wheat is instructive, the specs bid in a world of supply problems in a mere 28 days, amazing. This is about where corn and beans are I suppose. The specs have bid in a great deal of supply issue and made corn unaffordable for the end-users. Like 2008, there will not be a shortage of the real thing, just a shortage of paper beans or corn.
The economy in 2011 is very susceptible to severe weakness that should end the "risk on" trades noxie talks about. Gold is probably on its way to $1800 which will end low rates and will end the FED's abiltiy to steal from the savers and give to the specs.
Just an opinion, implementing the plan is far more important than opinions. So, interest rates are a primary concern if you haven't managed that already. Pacer Ultra's are a great tool at the Big C if you can get over their obnoxious fees and policies.
Why isn't anyone screaming about the bogus crop ratings all season long? Funny, anyone with a thermometer and rain gauge and color camera could see the corn rating was way over-stated.
Back to your question, the June low was as easy as it gets. We now are in the no mans land as it takes a while for markets to top out. I have expected highs around Dec 10th but we are going higher too fast probably to maintain emotion that long. Just like wheat, new crop may top in Dec but the nearby topped early on a flood of spec money. After the election, there will be a serious hangover of spec money flows that will have to be digested sooner or later.
Lastly, this is NOT a demand market. It is a pure and simple old style supply shortfall market. We all know how those play out and this one will do the same I suspect. (except it is important to note that there is no shorffall of beans)
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