Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
You want to see a very clean example of how much distortion the government has brought into the markets? This will hit you over the head like a two by four: let’s talk about lumber.
Below is a chart of the price of lumber in the mid-1980s. Sure, it looks volatile, but it isn’t. It hangs around $185, plus or minus about $15. In other words, even over a period of years, it goes up or down about 8%.
I’ve had a SlopeAlert set for DBC ever since Mamie Eisenhower was trying out for the swimsuit edition of Sports Illustrated, and it finally fired this morning.
It is amazing how compressed the cycles are in the markets these days. But maybe it’s not so surprising when you consider the constant involvement of meddling, manipulating central banks and even governments. Add a dash of hysterical media and the human instinct for knee-jerk herding and voila, there you have it; sentiment in commodities (and the inflation trades in general) going from absolutely rock solid (over) bullish to bleak in the span of a month.
All of this in the wake of an entity that held out dovish as long as it could before being directed by the market to put on its hawk costume and go steroidal in its inflation fighting stance. Seriously, market participants are taking their cues from a monetary authority that itself is taking cues from the bond market’s signaling (tardy though they were on the uptake). The link above shows the 3 month T-bill yield’s directive that the Fed aggressively raise rates back back in February. There were other signals as well demanding the same.
(more…)
