Tags: rosenberg | commodities

Rosenberg: Go Long Commodities

By    |   Friday, 02 Oct 2009 09:01 AM

Gluskin Sheff's David Rosenberg says investors should go long commodities to take advantage of the brewing trade war.

“First came the U.S. tariffs on Chinese-made tires a few weeks ago,” Rosenberg writes in a daily note, also noting that the European Union has begun imposing anti-dumping duties of nearly 40 percent on imports of steel pipe from China.

“The China Investment Corporation is increasingly diversifying into a broad range of commodities, both hard and soft,” Rosenberg says.

“(It’s) best not to bet against entities like these with extremely deep pockets — this is a $300 billion fund.”

Rosenberg told the Financial Times that China’s incremental consumption of tradable goods — the key for commodities — stood at $275 billion, nine times larger than the service-dominated U.S. consumer.

However, he seems even more disturbed by the Obama administration’s apparent support of labor over free trade.

“Any administration that engages in erecting trade barriers to placate unions is an administration that would likely be none-too-perturbed to see its currency depreciate in order to bolster local export competitiveness and surreptitiously build a wall against imports,” he says.

The Wall Street Journal reports that China’s government run investment fund paid $939 million for a stake in Kazakh oil and gas company KazMunaiGas Exploration Production and has invested $1.9 billion to buy "debt-like" instruments issued by Indonesian coal miner PT Bumi Resources.

The sovereign fund also agreed to buy a 15 percent stake in commodities trader Noble Group Ltd. for $850 million.

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Gluskin Sheff's David Rosenberg says investors should go long commodities to take advantage of the brewing trade war.“First came the U.S. tariffs on Chinese-made tires a few weeks ago,” Rosenberg writes in a daily note, also noting that the European Union has begun imposing...
rosenberg,commodities
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2009-01-02
Friday, 02 Oct 2009 09:01 AM
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