What Happens to Oil Markets if Iraq Collapses?

Oil production from Iraq may be in decline along with political stability in the country. The government aims to produce 9 million barrels of oil per day by the end of the decade. A weekend attack on an oil pipeline to Turkey, however, highlights some of the export restrictions that are keeping investors at bay. […]

The Dubious Economics of Crop Insurance

Insurance is an essential part of the financial infrastructure of a market economy. By spreading losses among members of a group with similar exposure, insurance encourages people to take prudent risks while protecting individuals from ruin in case they are the unlucky ones. Not all risks are insurable, however. Attempts to insure the uninsurable create […]

Global Commodities Markets After Financialisation

Markets are in constant flux and commodities markets are no exception. Their market structure has evolved at an incredible pace over the past decade. Size and interconnection, fuelled by easy access to financial leverage, have made top commodities trading houses ‘too-physical-to-fail’. Greater transparency of physical holdings, greater scrutiny in intra-day futures volumes, management of conflicts […]

A Bad Time to Lose Iran

Or least Iranian oil. Reports surfaced this week that sanctions are decimating Iranian crude exports. India’s imports from the pariah nation appear to have fallen 60% in June, year-on-year. Iran’s top four customers–China, Japan, India and South Korea–probably dropped their imports by a third. The loss of this supply is going to make things interesting […]

Is Gold Overdue for a Bounce?

Back in my days as a trader, I would peruse the lists of 52 week lows looking for reversal candidates. The key was finding an intelligent entry that had a very tight stop, so it presented a good risk reward. I am happy to risk one dollar to make three. Slowly build the position over […]

After the Gold Rush

The run-up in gold prices in recent years – from $800 per ounce in early 2009 to above $1,900 in the fall of 2011 – had all the features of a bubble. And now, like all asset-price surges that are divorced from the fundamentals of supply and demand, the gold bubble is deflating. At the […]

Arguments against Exporting Natural Gas Don’t Add Up

The energy policy topic of the week is whether to export more of America’s newly abundant natural gas. Like any good card-carrying economist, my instincts favor free trade. Other things being equal, that makes me pro-export. Still, shouldn’t we listen to what the other side has to say? Maybe gas is different. Maybe exporting it […]

Gold Prices Falling

Was their rise caused by “bad policies”? And why are they falling now? From the NYT: The assumption among gold bugs was that the flood of new money would cause inflation, making hard assets like gold more attractive. So far, though, there have been few signs of inflation taking root even as central banks in Japan […]