Commodities just another Wall Street bubble

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When one sits around all day reading Wall Street research, patterns emerge. One is that professional managers very obviously read one another’s stuff and copy it. Another is that Wall Street likes to find a kernel of truth in some market, blow it out of all proportion, and inflate a bubble so it can front-run with big client money before dumping it at the top on smaller and less valuable retail losers.

None of this is new. It was described by John Kenneth Galbraith in The Great Crash of 1929. It was described again by Ross Garnaut and myself in our ambitious sequel, The Great Crash of 2008.

Yet the one piece that stands out for me today, the one must read as it were, is by a journalist. It is Matt Taibii’s The Great American Bubble Machine at Rolling Stone. It is the story that captures the epicentre of the process, otherwise known as Goldman Sachs:

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.