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The trouble with inflated asset prices

by daniellepark on Thu 04 Feb 2010 01:45 PM EST | Permanent Link | Cosmos

The trouble with most asset prices today is that they are quite simply inflated. The run up since March '09 means that many prices are over-shooting the reality of world demand by a significant margin at present. This chart of copper makes the point well:

Source: Bloomberg Finance L.P. via Ian Farrell

The nub of the matter is this. Even if you see some economic recovery ahead, prices have already discounted that and a good deal more. The anti-US dollar trade has been the catalyst for much of the price moves in risk assets the past several months. If the U dollar rebound continues for a bit, the threat of significant damage to stock and commodity prices should not be ignored.

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Re: The trouble with inflated asset prices

by Dazzo on Sun 07 Feb 2010 09:39 AM EST | Profile | Permanent Link

More trouble in the USA
http://market-ticker.denninger.net/archives/1940-Consumer-Credit-What-Good-News.html

Re: The trouble with inflated asset prices

by Dazzo on Mon 08 Feb 2010 08:06 AM EST | Profile | Permanent Link

Haven't noticed this in the North American press
http://www.heraldsun.com.au/business/world-bankers-meet-in-sydney-as-recovery-fears-intensify/story-e6frfh4f-1225827280461

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