Friday, November 21, 2014
Chinese rate cut: party on, Garth!
A certain acquaintance (a swarthy fellow with a British accent, with a name that rhymes with Blichael Blaoul) noted that he was going to be very interested in the commodity market's reaction to China's surprise rate cut.
Well, as of the last few hours anyway, copper's up gold's up silver's up.
Do you remember that story about how China's leadership are idiots who are going to just sit back and let their economy collapse, like a bunch of Republicans or something? And how that means the commodities are in for rough times?
Well, now that this assertion has been disproved, let's watch and see how short the market was and how unshort it's going to have to get over the next few weeks.
Party on, Garth!
Oh, and for those of you interested in Mickey Fulp's noted supertight negative correlation between gold and USD - you might want to check and see how uncorrelated they get now.
That's the other problem with putting on a USD-gold pair with the assumption that gold is negatively correlated to USD - it only works until it suddenly, brutally, viciously doesn't.