Friday, March 21, 2008
After a brief foray into historiography, normal service is resumed today, albeit in heavily abbreviated form. The market sure hasn't gotten any easier, has it?
We've seen a 30 point SPX round trip the last two days and enough rumour and innuendo to last a lifetime. The real interesting action has been in the commodity complex, however, which has been absolutely roasted since the "hawkish" outturn of the 6ed meeting.
Gold is the poster child for the decline, as its shed more than $100/oz. However, action in other contracts has been even more ferocious; silver, for example, was nearly 21 a few days ago, closed yesterday below 17. *y caramba!
So is this the start of the deflationary crunch feared by so many? Macro Man finds that difficult to credit. After all, the commodity carnage has come over a time period when stocks have rallied on aggregate. No, it looks like good old-fashioned profit-taking to Macro Man....though it does provide a hint of how hideous true asset deflation could be.