It’s another crazy day in the equity markets, with the Dow opening sharply lower – beneath 10,000 – but quickly rebounding above 10,000 and above the open. So it’s a green day on the charts right now. For now.
Let’s hope it stays that way, because in interviews for stories on both oats and pork markets this week analysts I’ve spoken with have said that events in Greece, inside the tormented European Union and with its currency – the euro – are planting bears’ teeth underneath the commodity markets, scaring investors in everything that a recession in Europe and possibly elsewhere is becoming more likely.
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Recessions kill demand and cut consumption. Plus they scare the bejeekers out of everyone. So we don’t want that. Especially in the meats, people don’t tend to hide their money in pork chops. As Ron Plain of the University of Missouri pointed out to me yesterday, in bad times – or when people perceive that things are about to go bad – people stop buying pork chops and steaks and begin loading up on pasta, sausage, bottled water and ammunition. Well, he didn’t say the bit about bottled water and ammunition, but he did say people tend to flee into the economic bunker when the economy goes south.
So after a terrible week in the equity markets, which is killing the commodities, let’s hope this market week ends a few hours from now in the direction the Dow is heading right now, which is up, into the green, and in the direction of better chop-and-steak-eating times.
