Commodity Complex Pummeled In Preparation For QE 3
Not at all surprising, the entire commodity complex just swooned, supposedly on the latest DOE inventories data, which saw a surge to 2878K versus expectations of -1600K, up from 616K previously (same surge in gasoline inventories, which surged to 2553K on expectations of 900K). We say not surprising, because crude, and thus all the other uber-correlated commodities, needs to drop at least $10-15 from here before the Fed can then proceed to triple its price once the money from QE 3 start sloshing around. We expect significant more downside weakness in Crude as the realization that QE 3 is inevitable finally dawns on Wall Street. Remember the Catch 22: everything (commodities, stocks, etc) has to go far lower, before everything surges yet again post the next monetary easing episode.
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