Or select individually:
- Is There ANY Evidence That The GLD ETF Has Distorted The Price Of Gold?
- It’s Confirmed, The Housing Double Dip Is Here
- Global Food Prices About To Break An All Time High
- An Insane 12 Hours In Euroland
- The Scariest Jobs Chart Ever Is Now Really Scary Again
The uber-popular SPDR Gold Shares ETF 'GLD' is the subject of a long and fascinating profile in the WSJ titled: How A Fund Helped Make Gold Prices Glitter.
The gist is that in 2004, gold was a dreary, forgotten asset and so the gold industry got together and democratized gold by creating an ETF that tracked the commodity and that since then there's been this huge boom.
Now it is true that the ETF is now one of the biggest holders of gold in the world, and it is true also that gold has boomed since the launch of the ETF, but are the two related in any way?
The evidence is not clear.
As a test, we checked out gold in relation to copper and oil, two commodities that NOBODY thinks are strongly influenced by ETFs. What we see is two things: One is that the gold/copper and gold/oil ratios stayed pretty low for quite some time after the creation of the ETF, even as the ETF grew 10x in the amount of gold it held (it went from holding $1 billion worth of gold to $10 billion after two years, according to WSJ). And even now, with gold near record highs, the ratios are firmly in line with historical norms.
In other words, if you take the dollar out of the equation, you just don't see anything weird going on with gold post-creation of the ETF, which you would expect if there were some new force creating a bubble in gold.
If anyone has any empirical evidence that the ETF has created a big distortion in the market -- rather than just conjecture -- we'd love to hear it.
Nothing too fancy or hard to understand here... from the Just-released Case-Shiller index, it's clear that the housing double dip is here.
The chart (below) depicts the annual returns of the U.S. National, the 10-City Composite and the 20-City Composite Home Price Indices. The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 1.5% decline in the third quarter of 2010 over the third quarter of 2009. In September, the 10-City and 20-City Composites recorded annual returns of +1.6% and +0.6%, respectively.
Inflation in emerging markets is hitting food prices hard, and now we have raw data from the UN to confirm.
The latest report from the UN Food and Agricultural organisation shows prices are back at 2008 levels, and have increased for five months in a row.
The data evaluates 55 different food commodities, so it's a pretty broad gauge of world costs.
Whether or not costs are high enough yet to lead to a world food crisis remains to be seen, but further inflationary pressures on emerging markets, where there are the most mouths to feed, will remain a threat.
If you wanted more evidence that the excitement in the markets doesn't happen during market hours, you only need look at a chart of the euro between midnight and noon today, when it swung wildly on speculation, auction details, and interpretation of Jean-Claude Trichet.
Comment est-ce qu'on dit: rollercoaster?
Well, just when it looked like things might be turning up on the jobs front, we got today's thud of a report.
Here's the update of Calculated Risk's scariest jobs chart ever, which shows flattening of the recovery curve.
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