The benevolent bastards from Goldman are out like vampires tonight, suggesting that you interrupt your wives in mid sleep to get permission to sell short copper now, for this rally is built on bullshit.
“With prices rising significantly, and with the structural case for base metals remaining very poor we recommend producers and investors with longer-term horizons begin implementing hedging strategies and consider short positions in copper and aluminium over the coming month,” the Goldman analysts wrote in the report.
Price Jump
Copper on the London Metal Exchange was at $4,943 a metric ton by 12:16 p.m. in Singapore, up about 14 percent from a low in mid-January. Aluminum was at $1,589 a ton, up about 10 percent since Jan. 12.
In Goldman’s 12-month view, copper may drop to $4,000 a ton and aluminum will probably slide to $1,350, according to the report. Deleveraging in China and emerging markets, further dollar strength, mining cost deflation and strong supply growth, particularly in copper because of a prior boom in capital expenditure, are set to keep “capex-heavy” metals prices under pressure over the coming year, the bank said.
“Overall we find that the likelihood of a sustained improvement in Chinese demand during 2016/17 is low,” the analysts wrote.
They’re not fans of the reflation trade, nor do they find it in the least bit amusing by which investors are comporting themselves, slobbering over rakish balance sheets.
My guess, they probably were rejected as lead underwriter on the Freeport McMoran secondary thst is most assuredly coming.
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They are long copper. Plus they are selling S&P calls ad buying puts since they told their clients to buy calls today. You can’t make this shit up. is like they the jig is up so their crimes are out in the open know. Zombie apocalypse can’t be far behind.
Pardon the spelling. just awful
Hi Blue.
Goldman wants to buy your FCX shares
Funny how every single sell-side bank is pitching short duration trades this week.
$60bn issuance this week but more than likely it’s all swapped & the Treasury bid is just getting started.
At this point Shanghai is holding more Copper then LME. Even the arbitrage trade is dead.
They are right. Look at the long term chart on copper. Absent China and other similar demand, it’s going right back to historical levels…or lower. As for secondaries in this space…we’ll see.
@anjing Well I researched April 2000 Market Drop. It appears, and I could be wrong, that in 1997 in the response to the Asian Crisis, the IMF started to loan out huge amounts of money, and along with that, the USA tried to stimulate the economy be passing the Taxpayer Relief Act of 1997. Suddenly dividend stocks didn’t have the same tax benefit of non dividend stocks. The Dot Com Names seem to lure all this “New Money”. FOMC saw this and tried to fix it by having 6 rate hikes and in 2003 they changed the law. So in a sense the bubble was created by fixing another bubbble. LOL, just like this commodity bubble was started when the global central banks and China Govt tried to fix things after the 2008 collapse. Boom/Bust. IMHO the world would be a lot healthier if they would just leave economies alone.
they encouraged people to buy 5 years ago and now they want us to sell. salt of the earth that bunch.
the fax machine of fear needs a refresh
Live. Throwing Copper. Great album.