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>Second, I agree with your categories in general, Stewart. I would also
like to
>see some distinction in the prices of commodities, however. For example, corn
>and wheat can be tilled under in the US if they stay at today's prices.
There's
>no market here, and many needy nations cannot afford them because their home
>currency prices US grains out of their reach.
I spent several months working on adjusting charts for currency changes and
flows, but came to the conclusion that it was just too damn much
information for me to keep up with and to evaluate. I have to admit that I
have taken to using the CRB proxy because I mostly trade U.S. bonds and
stick to the domestic exchanges.
>I also would not underestimate the effect of certain flows like oil...Again,
>these flows are more readable when they are re-calculated on a currency
basis.
>For example, oil rates are not particulary cheap to those countries that have
>seen their currencies plummet on the Asian crisis. Maybe commodities
should be
>calcualted in a basket of currencies and the commodity groupl split to
reflect
>industrial commodities[oil, metals, building materials] and foodstuffs[grains
>and others]?
I couldn't agree more, but again, is extra work worth the result? Are we
trying to build a model or are we trying to get a quick fix on the state of
the world. Not saying that your way is wrong, I don't know. I do know
that I like quick and simple.
At the least, averaging them all together this way would be interesting to
watch (as long as the process were automated).
Stewart Taylor
Taylor Fixed Income Outlook
Voice: 501-219-9774
Fax: 501-228-0963
E-Mail: staylor@xxxxxxx
Web Site: http://www.cei.net/~staylor/
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