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Who's Hurting From Slumping Commodities
With the slump in crude prices set to persist thanks to a combination of geopolitical wrangling, supply, and an impending lack of storage, oil producers are feeling the squeeze. More broadly, commodities have been weak across the board and to let Goldman tell it, history suggests a rebound could be a long way out. The following graphics illustrate commodity dependency by country.
Here’s who depends on oil....
...and on metals…
...and on commodities more generally…
...and slumping prices…
...may persist for quite some time…
Via Goldman:
For oil we believe that fundamental adjustment still has some way to go. In the short-term, we expect US inventories will continue to build at a rapid pace and OECD inventories to also start to build over the coming months. Later in 2015H2 we expect this trend to gradually reverse as the market reaches a new normal. For copper, we are more bearish and expect that visible inventories will continue to grow, weighing on prices over 2015-16. On net, our forecasts point to negative total returns for S&P GSCI for the next six months, before prices start to recover and roll yields.
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Maps: For interactive versions from The Economist click here.
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Yes... because whatever you do, don't look at the debt ceiling debate with a Democratic President and Republican Senate and Congress.
I'm not your down-vote, but are you kidding me? There is less difference in goals between the Rs and Ds than at any time in my life. They're just bitching about who gets to control the system, not about any significant disagreement in the structure of the system. The Rs, a week after their overwhelming 2014 election victories, went on record saying they would NOT use government shut-downs EVER while Obama is in office (and would never try impeachment, to boot).
CRs as far as the eye can see.
Red team, Blue Team. Divide and conquer. Nothing to see here sheep.....
Kabuki
Up here in Canada, the federal govt so scared they've delayed the annual budget, for months. Also, lots of bets going awry now, money borrowed, stuff built as stimulus on the expectation of a recovery. Desperate times in Canada.
I actually studied the Canadian housing market in depth last year. Whereas the US and the Canadian housing markets correlated pretty highly prior to the Sub-Prime Crisis, Canada seemed to diverge (and continued to rise) after the crash. Could be a lot of excess debt in that market which needs to work its way out of the system.
Rough times everywhere though. It's a shame that your economy is getting a drubbing. I really like Canadians. Here in Europe I am prepared for the worst. At this rate we will be approaching a modern Dark Age.
You'll get past that. We haven't passed a budget since Obama got in office.
OK, technically April 2009.
I live just south of Alberta in MT. The 20% drop in the loonie is being felt here. Has to be. I don't see Canadians hauling back pickup loads of shit from Walmart and Costco like I used to see.
It's because we have Target stores now...
LMAO eh?
The Canadians are loading up on goods from Walmart and Costco - goods made in China.
Little Stevie Harper may actually have to deliver soemthing as opposed to a lot of hot air against Russia.
Little Stevie's plan was to keep the economy going in Canada while waiting for the US to recover. When the US recovered, then he expected the Canadian manufacturing industry to recover also due to increased American demand.
Unfortunately Canadians went on a debt binge and jammed house prices up into the stratosphere, despite reading articles describing how difficult things were for Americans. "It's different here!"
Well, it isn't different here, and now that oil has tanked and will remain tanked (you don't veto a pipeline that would supply oil unless you are absolutely sure you won't have any trouble getting it cheaper from elsewhere) the Canadian economy will follow.
Hard times are a-comin'. The jobs are a-going. It's too expensive to build widgets in Canada any more.
Please go extremely easy on the "Stevie". He was just poorly advised by Ghoulman Sachs.
I believe Australia is the place to watch. The Australians went absolutely nuts spending...while the miners overbuilt capacity, betting on the China boom going on forever. Look at the other story on ZH about the Australian real estate boom that's about to go tits up. There are a lot of "middle class" Aussies that will get hammered into bankruptsy. I bet it gets butt ugly "down under" as this shitstorm unwinds.
hairball
Totally agree and with today's news that Australians have the highest personal/ private debt in the World at 135% of GDP and with the obvious slowdown in government spending/ Business CAPEX you have a full blown disaster coming up.
I personally can't see any light at the end of this tunnel with Government, both Federal and State zipping the purse closed as well as experiencing declining income, there seems nothing that can ignite the animal spirits.
On a side note my personal income looks to be down 30% off last year with limited new works in the pipeline,so yes, it is filtering through to all. At least I have weekends off now so its not all bad. Best go and polish the rust off the Pings
See attached and please carefully read the Headline. We tend to call a spade a spade
http://www.theaustralian.com.au/business/historic-debt-level-sparks-fear...
subscriber only article
Try the search engine of your choice with just the key words.
http://www.news.com.au/finance/economy/mortgaging-our-childrens-future-a...
Mortgaging our children’s future: Aussie ticking time bomb sparks fears should new GFC hit AUSTRALIAN
households are sitting on a ticking time bomb of debt, exposing the economy to risks in the event of another financial crisis, according to new analysis. The Australian reports household debt in Australia is equal to 130 per cent of GDP, compared with an average across the advanced world of 78 per cent, according to Barclays chief economist Kieran Davies.
Household debt was at 116 per cent of GDP before the global financial crisis and held steady until 2013, when the property boom set it rising again. Mr Davies said Australia’s debt levels were rising when those of other countries were falling, and the predicted rate cuts were likely to push borrowing even higher. Reserve Bank governor Glenn Stevens warned of the dangers of taking on excessive debt last year, saying “we would surely be asking for trouble if we see a big step up from where we are”.
“The tricky thing for the Reserve Bank is that promoting leverage is the key channel for the transmission of lower interest rates through to the rest of the economy,”
Mr Davies said. The high popularity of real estate investment in Australia compared with other countries is being driven by the availability of negative gearing tax concessions and favourable capital gains tax treatment. The level of household debt is higher now than at any other time in Australia’s history, with records going back to the 1850s. The level of bank lending as a share of GDP is now more than double the share of the previous peak, which was during the 1890s land boom. Continue reading at The Australian.
Take out the "bump" in 2014 and that "all comodities index" line is slow slump downward, which, I think, is a better indication of the "real" economy than GDP calculations by a lot.
FYI- The bump in 2014 was drivent mostly by expecations of severe disruptions in (mostly oil) supplies that just never materialized. Expect it to continue until WWIII starts.
I agree about GDP calculations. As an aside...
I'm always amused at the notion that "government spending" should be included in GDP....but the sheep go for it.
It's all in the plan to corner the worlds resources. ...stay tuned
What's the carbon footprint of the new Ford Class Aircraft Carrier?
Pretty low for the ship itself since it is nuclear powered. The jets are a different matter :) Fuel efficiency isn't a top priority for them.
hairball
USS America CVA-66 1969-74
PS
Do the bombs on board count against their carbon footprint?
:)
Exxon Mobil has agreed to open express lanes at their gas stations so Zeroes can pay $2/gallon more than sentient customers.
Go, Zeroes, go!
To be used only by some social network company exec riding a scooter who desperately wants prove not only how green they are but also how much more important their time is than the rest of ours.
If only the price of such vanity could stay $2/gallon forever. Enjoy it while you can suckas.
The 'when' for the rise in commodities will happen whenever the banksters decide to bring down the parabolic rise in the US dollar - and it WILL happen very fast when they do.
If you believe in a strong dollar then you can believe in cheap commodities. Just toss another trillion on the debt pile and keep believing.
It's all relative. Which piece of shit smells the worst right now? The EU is looking at negative rates and could even collapse if the Greeks exit and are followed by Spain and Italy. Japan is in the same boat. Brazil is collapsing along with Russia, Canada, and Australia.
The U.S.A. of the past 40 years (at least) is built upon lies folded upon falsehoods.
Morons who bought farmland for $12,000 an acre.
Morons who learned nothing from the age crisis of the 80's.
Morons who expected the price of corn to stay above $7 a bushel.
Just kill a bunch of people. That'll fix it.
Well?
The way things are going - looks like Harper will be rolling up my rim to win while I white-knuckle my ankles.