Cattle the next best thing to gold in a recession

theroad

Welcome to the weird world of commodity trading .

"Downturn-fearing investors worried that the popular refuge of gold is already overvalued may do worse than turn instead to cattle, which are the next best thing in commodities to a safe haven...

Gold, and silver to a much lesser extent, are viewed as safe havens and store of value as well as the closest thing to a global reserve currency," the bank said.

However, futures in both feeder cattle, those ready for putting on feedlots, and live cattle, those already fattened, are not far behind, falling 20%.

Livestock's resiliency is less intuitive, but we believe it is partly a result of its classification as a food staple as well its lower liquidity and investor participation," the bank said."

Source: agrimoney.com

This is bound to have a knock-on effect here. I guess commodities do well in an economic crisis.

Tora Bora

theroad wrote: »

Welcome to the weird world of commodity trading .

"Downturn-fearing investors worried that the popular refuge of gold is already overvalued may do worse than turn instead to cattle, which are the next best thing in commodities to a safe haven...

Gold, and silver to a much lesser extent, are viewed as safe havens and store of value as well as the closest thing to a global reserve currency," the bank said.

However, futures in both feeder cattle, those ready for putting on feedlots, and live cattle, those already fattened, are not far behind, falling 20%.

Livestock's resiliency is less intuitive, but we believe it is partly a result of its classification as a food staple as well its lower liquidity and investor participation," the bank said."

Source: agrimoney.com

This is bound to have a knock-on effect here. I guess commodities do well in an economic crisis.

Isn't it reassuring to get good news from the wise investment gurus in Morgan Stanley:rolleyes:
The same Morgan Stanley who had to have $110 million dollars pumped into them by the Fed, in 2009 to prop them up. Maybe if they had bought cattle futures prior to 2009, instead of risky "derivatives", they would have a bit more credibility today.

Poly

Golden calves, the best investment all round

Muckit

Poly wrote: »

Golden calves, the best investment all round

...You could feed them on this to help keep them 'golden'! :D

nilhg

Tora Bora wrote: »

Isn't it reassuring to get good news from the wise investment gurus in Morgan Stanley:rolleyes:
The same Morgan Stanley who had to have $110 million dollars pumped into them by the Fed, in 2009 to prop them up. Maybe if they had bought cattle futures prior to 2009, instead of risky "derivatives", they would have a bit more credibility today.

Seems as if they did have a go at "farming", not too successfully:eek:

http://www.bloomberg.com/news/2011-10-04/morgan-stanley-bet-the-farm-in-ukraine-before-fed-bailout-by-u-s-taxpayer.html

pakalasa

nilhg wrote: »

Seems as if they did have a go at "farming", not too successfully:eek:

http://www.bloomberg.com/news/2011-10-04/morgan-stanley-bet-the-farm-in-ukraine-before-fed-bailout-by-u-s-taxpayer.html

"Things began to fall apart within months. The locals stole fertilizer and insecticide, Bruch says, and he suspected that harvested wheat was disappearing too. He wound up fighting with tax, immigration, fire and police inspectors and trying to satisfy officials who wanted him to build roads, not just till fields. "

You got to laugh at that. Morgan Stanley eh............

weefarmer

Muckit wrote: »

Poly wrote: »

Golden calves, the best investment all round

...You could feed them on this to help keep them 'golden'! :D

Haha this was the first thing I thought of and was goin to say it