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Hedge funds at a loss to cope with mood swing Patrick Hosking and Clare Harrison The hedge fund group that took a huge bet on Northern Rock as it was imploding last autumn has reportedly lost 85 per cent of its investors' money, amid evidence of a terrible spell this summer for many hedge funds. SRM, the Monaco-based group that raised $3 billion from investors in September 2006, is down by 85 per cent, according to The Wall Street Journal, including a minus 77 per cent performance in the past year. Tight lock-up terms prevent investors from withdrawing their money....

Growing evidence suggests American consumers, businesspeople, and political leaders should all be bracing for double-digit inflation, probably as early as 2009. The relative price stability of the past 15 years is giving way to worsening inflation, despite the recent softening of oil prices. The Consumer Price Index for all items shows the inflation rate averaged 2.6% a year from 1992 through 2007 but has doubled since January, reaching an annual rate of 5.6% in July (BusinessWeek.com, 8/14/08). By next year, the monthly figure could hit double digits, and the inflation rate for 2009 overall could triple 2007's 2.85%. ... The...

The pound could soon dive to barely more than a dollar and a half while gold prices plunge to $650, experts predicted yesterday amid fresh evidence that the commodity boom is ending and the dollar's resurgence is under way. Michael Saunders, head of European economics at Citigroup, said it "would not be a surprise" if sterling fell to levels last seen in 2002 - around $1.55 - despite sitting above two dollars as recently as mid-July. His comments came as sterling dropped to a fresh two-year low against the dollar, down over a cent at $1.8632. Its recent series...

What a turn around. I saw predictions of this three months ago. Commodities down, bubble bursting Oil going to $80 let's hope

Australia - * Gold below $800 for first time since December * Silver tumbles 11 percent SINGAPORE Aug 15 (Reuters) - Gold tumbled nearly 3 percent on Friday and slipped below $800 for the first time since December 2007 as investors fled precious metals, with their confidence shattered by falling oil prices and surging U.S. dollar. Silver, which normally tracks gold, was the hardest hit, falling more than 11 percent. Platinum slipped more than 2 percent and sister metal palladium 3 percent. Spot gold hit an intraday low of $788.50, its weakest since mid-December, down from $811.25/812.65 an ounce late...

US dollar rallies as extent of worldwide recession becomes clearer By Ambrose Evans-Pritchard, International Business Editor Last Updated: 10:13pm BST 08/08/2008 The psychology of global markets has shifted hugely over recent days as it becomes clear that Europe, Australasia and parts of Asia are sliding into recession. The US dollar has launched its best rally in half a decade, reflecting a recognition that half the world is in even worse shape than the US. In fact, America is the only G7 country to eke out modest growth this summer. The US dollar index - currencies watched closely by traders -...

WASHINGTON -- Senate Majority Leader Harry Reid, back from the Fourth of July break, last week delivered a typical harangue on Republican obstructionism and Democratic virtue that included a promise: By week's end, he would show Republicans his proposal to deal with "this speculation thing" that he calls the root cause of $4-a-gallon gasoline. It would attempt "to end speculation on the oil markets." By week's end Friday, Republicans had seen nothing of Reid's plan because of internal Democratic disagreement on details. But plenty of other Democratic legislative proposals floated around Capitol Hill claiming to resolve the nation's gasoline woes...

The Commodity Futures and Trading Commission (CFTC) is investigating trading in oil futures to determine whether the surge in prices to record levels is the result of manipulation or fraud. They might want to take a look at wheat, rice and corn futures while they’re at it. The whole thing is a hoax cooked up by the investment banks and hedge funds who are trying to dig their way out of the trillion dollar mortgage-backed securities (MBS) mess that they created by turning garbage loans into securities.

Call this the Age of Commodities. Also think of this as the age in which commodities, long relegated to the cellar by economists and markets, have fought back. They have fought back with such vigor and catastrophic effect on global business that they may be the determining force in the November election. But Sens. John McCain and Barack Obama have been tiptoeing around the global crisis triggered by a run on commodities. Wikipedia defines the category well: “A commodity is anything for which there is demand, but is supplied without qualitative differentiation across a market. In other words, copper is...

NEW YORK (Fortune) -- Atlanta hedge fund manager Michael Masters has been a star witness in two recent Congressional hearings on how speculators are supposedly driving up oil prices. Masters and I don't see eye-to-eye on this issue, so I was surprised to get a call from him after my "Don't Blame The Oil Speculators" column went up on Fortune.com last week. Masters contends that without speculators, the price of oil would be $65 or $70 a barrel. He points out that the amount invested in commodities index products has risen from $13 billion to $260 billion in five years,...

Commodities Boom Recalls 70s Surge; Prices Not There Yet CHICAGO (Dow Jones)--Despite record highs that seemed unthinkable to many just a year ago, most commodities prices still have a long way to go before inflicting the pain global consumers felt in the 1970s. An analysis of 18 different commodities by Barclays Capital shows that only crude oil and heating oil have surpassed inflation-adjusted highs from almost 30 years ago. Of key food commodities, the closest to those highs is corn, which was still 42% below its inflation-adjusted October 1974 peak as of Thursday's close. Wheat was 57% below its 1970s...

Record oil prices have failed to temper the enthusiasm of Chinese auto buyers. In 2006, 6.2 million cars were sold in China, enough for the Middle Kingdom to surpass Japan for #2 in total vehicle sales (the United States still sells twice as many). In the first five months of 2008, Chinese auto sales show no signs of decelerating, up 17.4% from the same period last year. The rise in Chinese auto sales has been so dramatic that projections by China’s government for auto sales in 2020 were already exceeded by 2005. Millions of tons of copper, nickel, aluminum have...

WASHINGTON -- Speculative traders' interest in crude oil has grown to the point that they now account for roughly 70% of all trading in West Texas Intermediate crude on the New York Mercantile Exchange, compared with 37% in 2000, according to an investigation by a congressional subcommittee that forms part of an escalating political assault on Wall Street's role in the run-up in oil prices. The subcommittee's findings, based on data obtained from federal commodity-futures regulators, are the latest sign that Washington is gearing up to try to limit the role of hedge funds, investment banks and other speculative traders...

Obama calls for oil crackdown By: Mike Allen June 22, 2008 12:39 PM EST With the cost of gas a top issue in the presidential campaign, Barack Obama on Sunday will announce a plan to crack down on oil speculation by tightening regulations on energy traders. The announcement is further evidence that an Obama administration would take an activist, populist approach to regulating business. Obama wants to close a loophole in federal law that exempts some energy traders from regulations that govern other exchange-traded commodities. Democrats call this “the Enron loophole” because it benefited the Houston energy-speculation firm that collapsed...

Story appeared in MAIN NEWS section, Page A1 Runaway oil and food prices are angering consumers but yielding sweet profits for investors such as the California Public Employees' Retirement System. CalPERS has racked up a 68 percent return playing the commodities market in the past 12 months. The California fund and other pension systems have done so well, in fact, that some in Congress want to ban them from the commodities markets or at least curtail their investments. The elected officials say the pension funds are playing a significant role in driving prices up simply by pouring billions of dollars...

One of the biggest factors in high oil prices, according to many experts, is that investors, such as hedge funds and investment bankers, can use loopholes in commodities law to manipulate the market and drive crude oil, heating oil, gasoline and diesel fuel prices to new heights. Congress is aware of the problem and lawmakers recently passed legislation to address the “Enron Loophole,” one of the major loopholes that opens the door to abusive trading practices, but the law didn’t go far enough.

US Commodities: Gold Climbs, Moves Over $900/Oz; Grains Slide By: iStockAnalyst Thursday, June 19, 2008 5:39 PM NEW YORK -(Dow Jones)- Gold futures climbed and moved above $900 an ounce Thursday, as rising prices have brought in more buyers thinking gold prices will continue to increase. August gold rose $10.70 to settle at $904.20 a troy ounce on the Comex division of the New York Mercantile Exchange.

Commodities analysts leaving Wall Street By Francesco Guerrera and Deborah Brewster in New York Published: June 18 2008 02:10 | Last updated: June 18 2008 02:10 Wall Street is witnessing an exodus of analysts covering oil, gas and other commodities as the credit crunch and lucrative offers from hedge funds drive research experts away from investment banks. Over the past few months, highly regarded oil analysts such as Citigroup’s Doug Leggate and Geoff Kieburtz, Morgan Stanley’s Douglas Terreson and Bank of America’s Robert Morris have left. Recruitment experts say the moves are prompted partly by investment banks’ need to slash...

Corn hits record, soy rallies as floods expand By Julie Ingwersen and Nigel Hunt Thu Jun 12, 1:39 PM ET Corn prices soared to record highs on Thursday as flooding damaged crop prospects in the U.S. Midwest, heightening concern over shrinking stocks and fueling the market's relentless advance. Torrential rains have swept across the Midwest, the key growing region in the world's top producer, resulting in floods which have destroyed homes, as well as thousands of acres of corn and soybeans. "It's the worst in recent memory, at a time when demand has never been higher," said Gavin Maguire, analyst...

Why Can’t Our Media and Politicians Get The Oil Story Right? Of course the answer is quite simple! Our pathetic media and politicians can’t get it right because they don’t know how to analyze a market. After all, how many of them have actual experience in managing a client’s portfolio or traded a futures market? The problem is that their ignorance is having an outlandish impact on our lives as their ineptitude to understand and present the facts might very well lead to policies that will substantially hurt this country’s economy for a long time to come. We have precedence...