The Mother Of All Mean Reversions: Commodities Have Never Been This Cheap Versus Stocks
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The Mother Of All Mean Reversions: Commodities Have Never Been This Cheap Versus Stocks

Across Wall Street, from Barclays and UBS to HSBC, JPMorgan and Goldman Sachs, a common view is taking shape: physical scarcity is emerging across multiple commodity classes, driving prices sharply higher and signaling a broader hard-asset squeeze.

Last week, UBS strategist Sagar Khandelwal issued a similar call heard across Wall Street, telling clients to “position for a commodity upcycle.”

On Saturday, Christopher LaFemina, who heads Jefferies’ global metals and mining research and is one of Wall Street’s veteran commodity experts, told clients that commodities remain historically cheap relative to US stocks.

LaFemina compared the S&P GSCI with the S&P 500, showing the ratio hovering near its lowest level in more than five decades. Similar troughs emerged during the Nifty Fifty and dot-com bubbles before commodities sharply outperformed stocks.

Previous upcycles in the ratio coincided with the 1970s oil embargo and inflation shock, the Gulf War, and the 2008 oil-price surge. Today’s depressed reading comes as retail and institutional investors remain bullish up to their eyeballs on hyperscalers and memory stocks while remaining highly concentrated in a handful of other AI names. And really, what could go wrong if the AI boom begins to deflate?

The trough in the ratio comes as traders ignore commodity markets, where the theme of scarce physical resources is rearing its ugly head:

Agricultural prices are soaring; copper is trading above $14,000 per ton in London; tungsten is above $3,000 per ton; uranium is back above $90 per pound; and many other critical materials (seen as the building blocks for the AI boom) are surging as demand accelerates. Electrification, AI buildout demand, rising power consumption, geopolitical fragmentation, including China’s weaponization of export supplies (tungsten and germanium), and years of underinvestment are colliding to create a perfect storm of constrained supplies across energy, metals, and other raw materials.

"The 10-year rolling change in the US dollar remains one of the most important macro developments in the world today," Azuria Capital's Otavio Costa wrote on X. 

It's time to focus on "scarcity in the physical world," according to veteran commodities strategist Jeff Currie, who also warned, "The illusion of abundance is likely behind us."

Tyler Durden Sun, 08/30/2026 - 16:20
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"Profound Game-Changer": Musk Launching New Turbine Blade Factory To Solve Shortage Threatening AI Boom
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"Profound Game-Changer": Musk Launching New Turbine Blade Factory To Solve Shortage Threatening AI Boom

SpaceX is making an aggressive push into the power generation market, with The Information reporting that Elon Musk is preparing to address one of the most critical bottlenecks threatening America's data-center buildout: the shortage of advanced gas turbine components, particularly the blades and vanes needed to power massive data center campuses.

SpaceX is laying the groundwork for a new factory in Bastrop, Texas, that would manufacture high-temperature blades and vanes for industrial gas turbines. The move could allow Musk to circumvent the severe turbine blade shortage that has pushed availability toward 2030.

On X, Musk responded to the report, saying, "The limiting factor for nat gas turbine production is casting the blades & vanes. By doing in-house casting at SpaceX, we can accelerate nat gas turbines coming online by up to 18 months, which is a profound game-changer."

Musk previously warned about the shortage during a recent podcast, saying, "Turbines are sold out through 2030. In order to bring enough power online, SpaceX and Tesla will probably have to make the turbine blades and vanes internally. There are only three casting companies in the world that make these, and they're massively backlogged."

A Federal Trade Commission filing shows that Musk has acquired APR Energy, a provider of mobile gas turbine power plants used by data centers, utilities, and industrial customers.

Musk's acquisition of APR Energy also gives him access to a mobile fleet built around GE TM2500 and Mitsubishi FT8 turbines, which typically produce 20-35 MW per unit.

SpaceX is targeting roughly 10 gigawatts of AI computing capacity by the end of 2027, while Musk has said the company wants substantially more power and cooling infrastructure.

This all signals that Musk views the turbine shortage as a direct threat to SpaceX's data center buildout timeline. Rather than wait on constrained outside suppliers, he is moving aggressively to vertically integrate another critical layer of the AI infrastructure stack across his business empire.

Tyler Durden Sun, 08/30/2026 - 14:35
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Barclays Warns Next Commodity Shock Is Taking Shape: What You Need To Know
[4:19 PM | 0 comments ]

Barclays Warns Next Commodity Shock Is Taking Shape: What You Need To Know

Wall Street coverage of a record-breaking Super El Niño is only growing as agricultural commodities break out. Yet the rally extends well beyond the agricultural complex, with industrial metals and other critical materials showing signs of tightness in physical markets.

Whether it is veteran commodities strategist Jeff Currie turning bullish or UBS urging clients this week to "position for a commodity upcycle," the message is becoming louder: Commodity markets are tightening as adverse weather, years of underinvestment, declining inventories, and China's restrictions on critical-material exports converge into what appears to be an emerging supply shock. 

Focusing on the agricultural complex, Craig Rye, a sustainable investing research analyst at Barclays, wrote in a note on Friday that El Niño is strengthening in the tropical Pacific, threatening to disrupt global agriculture, energy production, and industrial commodity markets. 

Rye cited new multi-model forecasts from the International Research Institute for Climate and Society showing that the El Niño index could peak near 3.2 degrees Celsius between late 2026 and early 2027. If realized, the event would be about 15% stronger than the 2015-16 Super El Niño.

Rye explained:

Rising confidence in a historic El Niño increases the likelihood of significant disruptions across agricultural, energy and industrial commodity markets. Historical El Niño events have often been associated with

Rye expects the largest near-term risks concentrated in weather-sensitive agricultural commodities. Palm oil, coconut oil and rubber could climb 30% to 40% over the next 18 months, while robusta coffee could rise 20% to 30%. Rice prices may advance 10% to 20% as drought threatens crops and water supplies across Southeast Asia and parts of Central America.

He warned that the supply shock could then spread into industrial commodities, expecting aluminum and copper to gain as much as 20% over 18 months, while thermal coal could surge 20% to 40%. Mining disruptions, reduced hydropower generation and shifting electricity demand would amplify the effects of drought and extreme weather.

Rye identified Bunge and Archer-Daniels-Midland as potential agricultural beneficiaries. Norsk Hydro, South32 and Rio Tinto could benefit from higher aluminum prices, while Freeport-McMoRan, Hudbay Minerals, First Quantum Minerals and Southern Copper offer exposure to the bank's bullish copper scenario.

The most important reads this week: 

1. "Dark" Tanker Fleet Shatters Iran's Hormuz Stranglehold As Gulf Oil Exports Top Two-Thirds Of Pre-War Level

2. Got Hard Assets? UBS Says "Position For A Commodity Upcycle" As Global Scarcity Emerges

3. Zinc Hits Four-Year High As "Extremely Thin" Physical Supply Fuels Squeeze

4. US Tungsten Scrap Export Ban Takes Effect As Global Supply Crisis Deepens

5. Wheat Futs Surge To Three-Year High As JPMorgan, HSBC Warn Global Food Shock Is Brewing

6. "Buffers Running Down Quickly": HSBC Warns Next Global Food Shock Brewing

7. Uranium Awakens From Five-Month Slumber As UBS Warns Market Is "Tightening Structurally"

8. The AI Boom Runs On Tungsten, But Global Supplies Are "Running On Empty"

9. Diesel Crack Spread Madness Deepens As Jefferies Finds No Easy Exit From Russia's Refining Crisis

Across all commodities, here are the latest X trends: 

1. Warsh Jackson Hole smash: gold -3%, silver -3% to -4.5%

Fed Chair Kevin Warsh's hawkish JH remarks (inflation "not meaningfully" improved, 2% target firm, hike still live) sent COMEX gold down ~$130-$150 to ~$4,478-$4,530 and silver off $2-$3 to the mid-$60s. Dollar to a 2-week high; 10y near 4.7%. @AstraInsights: gold's 2nd-worst Jackson Hole reaction on record (behind 1990). 


2. Hormuz "open" vs IRGC reality check — oil weekly loss on a contested narrative

WTI/Brent booked ~4-6.5% weekly losses as traders priced in more Hormuz throughput and a possible US-Iran off-ramp. Weekend X counters: @Currentreport1 (video of queued ships; IRGC accuses US of talking the strait open to cap prices); @MenchOsint (UAE-managed tanker ELLIE turned around after attempting the US-backed southern corridor). 


3. Venezuela 65-billion-barrel "deal" goes viral on X

@GuntherEagleman and copy-accounts pushing Trump/Rubio/Hegseth + Delcy Rodríguez pact: majority US control of 65bn barrels, 17 fields, $100bn private capex, "zero taxpayer cost." High engagement overnight; pushback thread from @EmmaRincon (4.8k likes) that the interlocutor choice hands the Latin left a decade of ammo. Capital Economics already asking what a US-Venezuela heavy-sour deal does to Canadian/Mexican barrels. 


4. Wheat to a 3-year high as Black Sea crisis deepens

WSJ tape and @staunovo: wheat jumped ~3% Friday toward $7.60-$7.83 as strikes hit grain ships and export terminals. Region still ~1/3 of global wheat exports. 


5. Europe gas storage winter-panic: EU ~63%, Germany ~51%, NL ~44%

Guardian (Sat) + OilPrice: EU stores ~63% late August vs ~80% seasonal norm; lowest for the date in ~13-20 years. Qatar LNG force-majeure hangover from the Iran war; TTF still ~€66-70. Henry Hub ~$2.87 is a different planet. 

6. Copper still near records; El Niño hitting mine-to-port chains

LME copper ninth weekly gain into record zone (~$14.2-$14.5k/t) even as Friday faded. @robert_ivanhoe: Chile flood outages + PNG drought starving Ok Tedi river shipments. AI/data-center + grid demand vs falling grades. 


7. Zinc four-year high on collapsing inventories

@steve_hanke: zinc at a four-year high as mine disruptions bite; LME inventories cited down ~65% YTD and lowest since Apr 2023. Friday pullback from the spike but weekly still green. 


8. Crack-spread / product vs crude divergence

RBOB +2% Friday while WTI was flat-to-down. Heating oil also firmer. 

9. Palladium spike (+5% Friday) while gold/silver dumped

Palladium ripped as gold and silver were smashed — a split inside precious/PGMs. Why ZH: auto/catalyst + Russia-supply overlay vs rate-sensitive bullion. Unusual relative-value print.

10. Silver technical break after $71-$72 rejection

Silver printed a $72 high then confirmed a double-top / failed breakout into the mid-$60s. Gold/silver ratio still elevated. 

11. Iran exported ~90mn barrels during the ceasefire window

@MarioNawfal citing President Pezeshkian: ~90mn bbl / ~$6.5bn exported during the post-MoU ceasefire. 

12. Saxo weekly: scarcity rally broadening — then energy decoupled

Ole Hansen (28 Aug): barrels-to-bushels-to-bullion scarcity theme; precious +~15% in August before the Warsh flush; copper/zinc exceptions in industrials; energy the odd man out as Hormuz hopes grew. 

13. Cocoa melt-up (ICE/London +7-8% Friday)

Cocoa ripped several percent into the weekend after an already violent year. 

14. Tin two-month high — Indonesia licenses + AI/memory demand

CNBC-TV18 commodity desk: tin bid on Indonesian export-license cuts and chip/AI demand. 

15. Capital Economics: "Beyond Hormuz — path back to an oil glut"

House view that traders have already priced a lot of the Gulf-export recovery; residual Q3/Q4 volatility then glut. 

16. Asia crude imports still not showing a Hormuz rebound

Investing.com/Paraskova: Asia expected to take roughly July-like volumes in August; ship-tracking optimism has not yet shown up in Asian arrivals. 

17. US-Iran talks off / sanctions still tightening — two-way oil risk

Trump told mediators he will not return to June ceasefire terms; new sanctions packages still in the tape even as prices fell. 

18. Uranium holding ~$90 as energy complex bifurcates

U3O8 around $89-90, modest weekly green while crude sold off. 

19. Treasury buybacks vs Warsh hike-talk — policy schizophrenia trade

X gold accounts hammering the contradiction: Treasury long-bond buybacks to cap yields vs a Fed chair threatening hikes. 

20. Weekend positioning: dip-buy gold vs fade oil-peace

Retail/pro X split — gold CTAs and stackers calling the Warsh smash a "hide the debasement" hit; oil bulls warning Hormuz AIS games. Next catalysts: JOLTS, ISM, payrolls, any IRGC/tanker incident, Venezuela legal text. 

A look at the Quantix Commodity Index Total Return shows that the broad commodity complex has surged to a record high, gaining more than 22.5% since late June. The index tracks 24 US-dollar-denominated futures across energy, agriculture, livestock, industrial metals, and precious metals, suggesting the rally is no longer confined to a single corner of the physical world.

Currie's warned last week that "scarcity in the physical world" is reemerging. 

Currie's conclusion was very blunt: "The illusion of abundance is likely behind us."

Tyler Durden Sat, 08/29/2026 - 18:05
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You Should Feel Good About The Flock Debate
[3:19 PM | 0 comments ]

You Should Feel Good About The Flock Debate

Authored by Connor O'Keeffe

In a year as chaotic, violent, and economically destructive as this one has been, it is interesting that, to many Americans, the great villain of 2026 is turning out to be a traffic camera.

But, indeed, we are seeing visceral, cross-partisan opposition to so-called Flock cameras—named after the leading manufacturer of these automated license plate readers—take hold in communities across the country. And that opposition is, to be sure, entirely legitimate.

Flock’s camera networks are based on the idea that, while it would obviously be illegal and unconstitutional for law enforcement at any and all levels to put GPS trackers in everyone’s cars, it would be legal for a cop standing on some street corner to report that they had seen a specific vehicle drive by if it later turned out that that car had either been stolen or used to commit a crime.

But, taking that idea that public observations are not violations of privacy, Flock and similar companies help set up networks of cameras that record and register the license plate, make and model, and identifiable details of every single passing vehicle into a timestamped and searchable national database. And, as more and more of these cameras are added to streets and parking lots all over the country, and they, therefore, get harder and harder to avoid, the data the government has access to becomes essentially indistinguishable from what they would have if there were government GPS trackers in all of our cars.

There are currently around 120,000 of these cameras across forty-nine states, with more being added every day. And the American people are not happy about it.

In a genuine grassroots movement spreading primarily through local Facebook groups and the like, with little coverage outside local media, concerned citizens are doing everything from pressuring local lawmakers to rescind their contracts with Flock Safety to donning masks and cutting the cameras down with electric saws.

And this opposition is starting to have some success. More than fifty jurisdictions have ended their relationships with Flock after local backlash. And, after Flock tried and failed for months to get the wider public to view organizations that track the location of these cameras as terrorists because some have used those locations to avoid, disable, or destroy some, the company announced last week that it was implementing several changes to try and defuse the public anger.

Starting next year, Flock says it plans to cut the default retention period for data stored on their system from 30 days down to 7 days, require its government clients to use the internal system for detecting unusual or potentially abusive searches, require all searches to be tied with a specific case code (with emergency exceptions getting automatically flagged for review), and a few other changes meant to at least appear like they’re addressing the public’s concerns. And Flock has also already removed all federal agencies from its nationwide search database in an earlier public concession.

It’s notable that a government contractor that does no direct business with the public feels this pressured by that public to change its behavior. But even more notable is how ineffective the normal propaganda that gets rolled out to justify these kinds of advancements in government surveillance has been this time around.

The familiar tropes that government officials are only gathering this kind of data on all of us because it’s crucial for our safety or that it only ought to bother us if we’re criminals with something to hide are not just falling on deaf ears, they’re being widely ridiculed.

That’s certainly, in part, because there have already been plenty of documented cases of police officers and government officials using the Flock database to track the activities of romantic partners, ex-partners, people now dating their ex-partners, and more. All of that, of course, constitutes warrantless government surveillance for the personal interest of the officials with access to the technology, without even the semblance of a legitimate investigation. There have also been several dangerous, nearly-life-threatening cases of drivers being pursued and held at gunpoint because Flock cameras mistakenly identified them as criminal suspects.

But what’s really driving the widespread rage is not how the cameras are currently being used, or misused. It’s how they could be used in the future.

People across the political spectrum are concerned about this technology being used for everything from detecting stay-at-home order violations in a future pandemic to rounding up and deporting people because the government doesn’t like their political opinions. This is a remarkably healthy mindset for the public to hold. Basically, don’t let the government grab power you wouldn’t trust your political enemies to wield.

But also, this is why the controversy surrounding Flock cameras has grown so large and why it’s quickly emerging as one of the major political issues ahead of the midterms. It’s not really about the specific workings of this one brand of automated license plate readers. It’s because the public’s presumption that our elites and institutions are acting in good faith has completely evaporated.

The American people do not trust the people in charge enough to be reassured by promises about how this new surveillance infrastructure will be used. And that is good. Because we should not trust the people in charge. They have, fortunately, made that very clear in recent years—which is why we’re seeing such a political revolt against incumbents.

But, going back, all the government power grabs that have brought us to this point—the PATRIOT Act, the invasion of Iraq, the banker bailouts, the insurance industry bailout known as Obamacare, the covid lockdowns, and more—all of it was only possible because enough of the public fell for the lie that the government was acting in their interest.

The fanatical opposition to Flock cameras is evidence that that lie isn’t working right now. Let’s hope that lesson is not easily unlearned.

Tyler Durden Sat, 08/29/2026 - 16:20
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FDA Approves 3 New COVID-19 Vaccines
[4:19 PM | 0 comments ]

FDA Approves 3 New COVID-19 Vaccines

Authored by Zachary Stieber via The Epoch Times,

The Food and Drug Administration on Aug. 27 approved COVID-19 vaccines from Pfizer, Moderna, and Sanofi.

A nurse prepares to give a COVID-19 vaccine to a child in Denver, Colo., on Nov. 3, 2021. (Michael Ciaglo/Getty Images)

The new shots from Pfizer and Moderna use the messenger ribonucleic acid (mRNA) platform and target the XFG strain, a subvariant of the JN.1 variant.

Regulators also cleared a COVID-19 vaccine shot from Sanofi that targets the XFG strain and does not use mRNA technology.

The approval is for people aged 65 and older, as well as people aged 12 to 64 who have one or more underlying conditions such as obesity that officials say puts them at higher risk of severe COVID-19.

Regulators have been approving updated COVID-19 vaccines for several years, in a bid to better match circulating strains. The previous versions of the vaccines were estimated to provide 58 percent protection against hospitalization, according to the Centers for Disease Control and Prevention.

The FDA did not announce the approvals in a press release, as it has done in the past.

The FDA and its parent agency, the Department of Health and Human Services, did not respond to requests for comment by publication time.

Health Secretary Robert F. Kennedy Jr. has been critical of mRNA vaccines against respiratory diseases, saying they don't work well.

Manufacturers are going to run single-arm studies evaluating the shots in humans, according to FDA documents. The companies were going to be made to run placebo-controlled trials, but officials released them from that requirement "because of operational and feasibility challenges," the documents said.

FDA officials in 2025 said that new placebo-controlled trials were imperative to determine how well the COVID-19 vaccines actually performed, given it has been years since such trials were conducted. Pfizer and Moderna committed to running placebo-controlled trials, as did Novavax, which has since licensed its COVID-19 vaccine to Sanofi.

A sign in a pharmacy advertises the COVID-19 vaccine as the nation marks the fifth anniversary of the COVID-19 pandemic in New York City on March 11, 2025. (Spencer Platt/Getty Images)

The basis of the approvals was largely not detailed in the documents. During an advisory meeting in the spring, the vaccine manufacturers presented data from animal testing, but no data from human testing. The FDA's vaccine advisory committee then recommended the next round of COVID-19 vaccines target XFG.

Uptake of COVID-19 vaccines has plummeted in recent years. Just 17.5 percent of adults and 10 percent of children received a shot in late 2025 or early 2026, according to the CDC.

COVID-19 infections are growing or likely growing in 47 states, the CDC said in modeling estimates released this month.

Tyler Durden Fri, 08/28/2026 - 17:40
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