Tuesday, September 29, 2015

Credit Suisse: The Smart Money Is Betting On Fat

I knew it!
All our years of research into the tallow/grease/lard complex is going to pay off!
Living high on the hog. Fat and sassy.

As noted in May's "Huh, There Goes The Theory of Natural Selection":
First it was cholesterol in the dietary guidelines and now this. 
It appears Yeats was right, things fall apart, the centre cannot hold.
From Credit Suisse, September 22:

Fat: The New Health Paradigm
Consumers are making new choices, switching away from carbs to food containing fat such as red meat, butter and eggs. This trend offers powerful investment ideas, according to a study by the Credit Suisse Research Institute.  
Over the last 50 years, general nutritional wisdom has recommended a moderate consumption of fat. We have been told to dramatically lower our consumption of saturated fats (contained in butter, lard, milk, red meat, coconut oil…) and cholesterol (found in eggs, poultry, beef…). We have also been advised to increase our intake of polyunsaturated fats (contained in soybean, sunflower, corn, cottonseed oil…) and carbohydrates (found in pasta, bread, sugar…). But fat is a complex topic and these recommendations have been debated and questioned over the past 30 years. Some experts believe that these dietary recommendations – closely followed by the US population – are the main cause behind the country's high obesity levels and the rapidly growing number of people suffering from metabolic syndrome.   
Changing Medical Evidence 
Medical research is, however, gradually moving away from the recommendations just mentioned, according to the report "Fat: The New Health Paradigm," issued by the Credit Suisse Research Institute. This report is based on more than 400 medical research papers and books written by academics and industry experts, as well as two in-house surveys of doctors, nutritionists and consumers. Eating cholesterol, for instance, has basically no impact on the level of cholesterol in the blood or on potential heart diseases, and the link between saturated fat intake and cardiovascular risk has not been proved. "But we found that 40 percent of nutritionists and 70 percent of general practitioners surveyed believe that eating cholesterol-rich foods has damaging cardiovascular effects. This is not true, according to the extensive research that has become available in recent years," said Giles Keating, Vice Chairman of Investment Strategy & Research and Deputy Global Chief Investment Officer for Private Banking & Wealth Management. A high intake of vegetable oils (containing omega-6 polyunsaturated fats) has not been proved to be as beneficial as earlier thought, and trans-fats have been shown to have negative effects on our health. In short, saturated fats and monounsaturated fats are not behind the high rates of obesity and metabolic syndrome in the US. The two leading culprits are the higher intakes of vegetable oils and the increase in carbohydrate consumption....MUCH MORE
From the Credit Suisse Research Institute: "Fat: The New Health Paradigm" (84 page PDF)
It's really quite solid.

Previously on the triglycerides are yummy channel:

A repost of 2012's "They're Young... They're in love... They eat Lard":

As one of the few analyst blogs that covers* the grease/tallow/lard complex we attempt to stay au courant with the latest developments.

Sometimes though it is a good idea to pull back for a look at the longer view. Here's lard, ca 1950**:

Here's the Lard Marketing Board website.

*See for example the seminal "A Look at the Tallow/Grease/Lard Complex: Tallow--It's What's for Dinner".

**This version is from a truly disturbing post at Imighthavestolethat:
Retro ads of highly dubious origins

Some Economists Are Worth More Than Their Rendered Fat Will Bring

 Most of them should trade pari passu with the grease/tallow/lard complex.
(Prof. Gintis excepted) 
August 2009 
John Maynard Keynes: Money Manager (Couldn't Trade Lard to Save His Life)

...In a 1983 paper "J.M. Keynes' Investment Performance: A Note" the authors are dubious of his performance, without casting the aspersion that I do in my comment. They on the other hand have a great tidbit:
...Investments in commodities were more substantial. The highest annual gain was for ₤17,000 from September 1936 to August 1937 and the highest annual loss, mainly in lard, for ₤12,600 in the following twelve months...
And many more. Keywords: Keynes or tallow or... 
Volatility Getting You Down, Bunky?
Maybe it's time you looked into the tallow market.
The tallow/grease/lard complex has been traded for five thousand years:

2992 B.C.
Honey I'm home!
Hi dear, anything new in tallow?
Nope. Same ol', same ol'.

2008 A.D.
Commodities: Action in the Grease/Tallow/Lard Complex--"Tallow Replaces Crude Oil as Biofuels Go to War"
A headline you won't see just anywhere.And a subject near and dear to our sometimes over-amped hearts.Tallow has attracted academic econ interest. In this 2003 paper we have a price series for tallow that goes back to the year 1209 (starting on page 53 of the PDF).