News

September 22, 2008

That Was The Week That Was ... In Grains And Alternative Fuels

By Sally White

The concerted government attacks on the “shorts” in markets across the world, coordinated as part of the Fed-led attack on financial speculators, brought heavy trading in a number of agricultural commodities this week. Massive fund liquidation was reported amid the turmoil in the financial sector, as governments sought to cordon off debt and toxic investments and protect the financial system.

The woes of giant US insurer AIG reverberated through commodity markets. AIG acts as counterparty to a substantial portion of the US$30 billion that was invested in the Dow Jones AIG Commodity Index. In London, the London Stock Exchange suspended trading in a number of Exchange Traded Funds issued by ETF Securities which are backed by matching products from AIG. ETF Securities said that 113 of its 129 ETF products were affected. An emergency sale of AIG’s agriculture commodity positions by CME...