"Goldman doesn't like commodities because they are being driven by money flows and speculation. Dear oh dear oh dear. What is the world coming to?"
"In case you haven't heard, two heavyweights are in opposite corners in regards to playing the commodity markets. I am hearing that the boys at Morgan Stanley are looking for higher prices while the troops over at Goldman Sachs are advising investors to reduce most of their commodity holdings. As of last week, data from the CFTC shows that the "funds" held a net 1.49 million futures and options in 18 commodities, this is 57% more than last year. An Index that tracks 24 commodities beat bonds, stocks and the dollar every month since December, the longest in at least 14 years. It rose in April for an eighth month, the best stretch since 2004. Barclays Capital estimates that investors held a record $412 billion of raw-material assets at the end of March, almost 50% more than a year earlier. The question now becomes, has the party all of a sudden gotten overcrowded? Analyst at Morgan Stanley are pointing to the fact that a tight supply and demand factor is still in the cards, and getting out now would be premature. Goldman on the other hand believes that for most of the commodity markets, prices no longer reflect supply and demand issues, but rather are being driven by money-flow and speculation, therefore they are likely to drop in the next three to six months before rebounding."
David Fuller's view Sounds disingenuous, doesn't it.
The Fullermoney views regarding this debate are in the lead item above.