Something Is Wrong With This Picture

Two charts to consider today.

First, a longer term view of copper.



Second, a longer term view of the Baltic Dry Index.


My question today is this - how can copper be making new highs, when the major measure of shipping is getting close to the 2008 lows if a recovery is here to stay?

Something does not add up.

Comments

  1. AnonymousFebruary 5, 2011 at 5:30 PM

    Because the rise in the copper price is not due to real demand which requires delivering by ship but due to speculators buying contracts which they will never take delivery of .It was part of bernanke's plan to save the DOW which technically last sept was about to roll over and test the march 2009 low .

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  2. AnonymousFebruary 5, 2011 at 9:15 PM

    Price/Market manipulation, and to a lesser extent speculative demand.

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  3. ManuelFebruary 6, 2011 at 4:00 PM

    Trying to fit a square bolt in a round hole?

    Have you thought about that there are too many boats being built?

    That is a reality, actually. Don´t forget... the old laws... of supply and demand. They are still actual, you know.

    The copper that is being consumed all over the world, is it all being transported by boat? I doubt it.

    But keep looking for reasons to defend your own theories. So far, they just make me laugh. Sooner or later you will be right. Maybe not in your or mine lifetime. But you´re a very patient man.

    I´m not. So, in meanwhile, I´ll continue to earn some money buying some calls (you know, the optimistic bets on the market).

    Have a nice week.

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  4. PW BaileyFebruary 6, 2011 at 6:43 PM

    Manuel,
    Perhaps my point in posting information that questions the recovery that we keep hearing about is this - are we misinterpreting data due to survivorship bias?

    I am not aware of any substantial changes to correct the underlying problems of the economy or banking system. Compounding this problem, those who failed to see the first crisis (Bernanke), are still in charge.
    So for me, caution seems advisable, and patience will be rewarded.

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  5. StockFebruary 7, 2011 at 10:43 AM

    And check out the LME and CME inventory levels on copper....going up significantly over many weeks.

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