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Angry Birds ( not gorillas )

Jul 08, 2022

One of the strategists I admire most and I have been reading since I am active in the financial industry is Albert Edwards from Société Générale. He is sometimes referred to as Mister Ice Age with the theory that we would ultimately lead into a “Japanification” of our developed economies. He is now pointing to the weakness since June in major commodities, not only copper, but also oil, agricultural products and industrial metals. He asks whether these commodities are a canary in the coalmine or gorilla in the mist charging toward us ? We remain confident that this is not a gorilla because supply of these commodities remains extremely tight for the reasons discussed before: chronic underinvestment in oil over the last decade, the Ukrainian war, the re-opening of China and the de-bottlenecking of some of the supply chains. An annoying angry bird ( cannary ) may be that could create economic trouble in the short run.

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