BHP, the world's largest mining company, dropped 27 percent to A$36 in Sydney since the index peaked. Rio Tinto Group, the world's second-largest iron ore producer, declined 28 percent to A$111.50. Alcoa, the world's third-largest aluminum producer, lost 30 percent to $31.04. It is probable that the oil market has reached the tipping point and is sliding into surplus. That means prices collapsing to 60 $/barrel once more. All the green and renewable energy projects will collapse, just as Luz (an Israeli solar energy enterprise) collapsed a few years ago. Luz II may not survive the current cycle. Everybody knew it was coming and everybody was caught with the pants down. We will have to stop buying expensive designer breads like Lehem Kafri and come back to lehem ahid - the subsidized uneatable bread in plastic sacks. And pitot. And margarine.
4 comments:
All assets are subject to market bubbles - at first people are wildly optimistic ("oil will be $500/barrel soon") and overinflate the market. Then the bubble pops and the price crashes. This has been known for hundreds of years and yet there is something in human nature that causes us to make the same mistake over and over - "all those other times were speculative bubbles but THIS time we have (insert rationalization here - reached "peak oil", etc.) so things are different and from now on (insert name of asset here) will only go up in price and never down.
Both the "wealth effect" and the "poverty effect" are illusions - unless you convert your paper gains (or losses) to cash, they are just that - paper. Keep eating that delicious Lechem Kafri - your children will make their own money and there's no need to leave them a big inheritance. I have known so many wealthy men - when the malach hamoves came for them, the money stayed behind and did them no good - all the hard work, all that neglecting their families and cheating their business associates so they could have more wealth - it was all for nothing.
On a second reflexion, I take your advice on lehem kafri. The subsidized standard bread is cheap but uneatable, maybe purposefully so, as to avoid its use as animal feed.
Sir,
Among us Hungarian Jews the malach hamoves is never mentioned except once a year, and we must be drunk and sing: Ve'oso malach hamoves ve'shochat l'shochet D'shochat l'toro d'shoso l'mayo ... Ve'shochat l'malach hamoves D'shochat l'shochet d'shochat l'toro ...
Chad gad ya...chad gad ya.
Ungarin will use any excuse to get drunk, even Pesach. Poilische yidn only get drunk on Purim, when it required that one get so drunk as not be able to distinguish Haman from Mordechai.
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