From FT Alphaville:
Goldman’s commodity-equity team — as made famous by analyst Arjun Murti and his $200 oil call last year — is out with a new collaborative note. Unsurprisingly, it’s pretty bullish.
A choice extract (our emphasis):
We expect a commodity supply shortage in 2010 We have long emphasized that the commodity problem is, at heart, a supply shortage due to decades of suboptimal investment, which has been exacerbated over the past year by the sharp drop in prices and tight credit conditions. As the commodity markets rebound with the broader global economy we expect a redux of 2008 when severe supply constraints forced the rationing of demand through sharply higher prices to keep the markets balanced.
The note goes on to say they believe the imminent crunch will be so bad, governments will end up having to conduct coordinated policy responses, much like they did over the financial crisis....MORE