Credit bubble burst hits commodities

[Fransisco]

Just in off the combine and I see that the sub-prime credit bubble burst has hit soybeans and canola really hard today.

The commentaries I'm reading remind me of what people in California say after a mild quake, " I wonder if the big one is coming next?"

How long this could go on is anybodies guess.

Governments created overly cheap credit and keep printing money with nothing to back it up but good intentions to throw at this mess hoping the real investors will come back soon.

I hope so too but right now it looks like everyone is heading for the sidelines.

[kamichel]

I don't know much about this credit bubble stuff but I do know if my mutual funds don't start paying off in 6 months I am going to say the hell with them.

[Fransisco]

This doesnt sound good...


Larry Kudlow;


"An extraordinary money-market development has occurred in recent days. The safest liquid credit instrument — the gilt-edged 91-day Treasury bill — has seen its yield plunge.

Here’s the story: Last Wednesday, August 8, T-bills traded at 4.49 percent. On Monday they dropped to 4.74. On Tuesday, 4.63. And yesterday they fell to 4 percent. This morning they dropped another 50 basis points to 3.52 percent. What’s this mean? It means the entire banking system has turned completely risk averse and is fleeing into the safest haven possible.

It is fear. It is hording cash. It is a mountainous tremor that has seized financial markets.

In terms of funding requirements — for big mortgage banks like Countrywide, or perhaps the major money-center banks and various hedge funds — it shows financial dysfunction."

[Fransisco]

Real interesting link here on the situation from someone who predicted this a couple of years ago.

We're talking about a lot of people's homes here.


http://www.agorafinancialpublications.com/RudeAwakening/RAissues/2007/JulAug/RA081607.html

[cottonpicken]

The smart money new this was coming.

Why do you think gold did what it did?

If the fed raises rates it makes the situation worse.More defaults on debt and the economy tanks worse.But the dollar will be saved and gold(and wheat) will go down.

If the fed lowers rates the dollar goes down,gold up and the financial reckoning day is put off a little longer.

ROCK AND A HARD SPOT

Sometimes there are no solutions to a problem.

[cottonpicken]

HA HA HA!

Surprise rate cut just came threw.

Cando up 1.5 cents in half an hour!

Grains are going to the moon!

Nothing like instability.

[crusher]

c.p., what do you use for market info, my sources haven't picked up on that yet?

[cottonpicken]

Bloomberg.com,for up to date mainstream.

[grassfarmer]

Like any market drop it provides good buying opportunities for the wise investor prepared to look long term.

[Fransisco]

The question is when to buy? Picking a bottom is as hard as picking a top. As one guy put it to me, " you ever try catching a falling knife?"