[lbo-talk] lbo-talk Digest, Vol 1146, Issue 1

[Mike Beggs]

On Sun, Feb 28, 2010 at 7:06 AM, brad bauerly <bbauerly at gmail.com> wrote:
> I wonder if you could answer a few questions for me Mike related to what
> Doug said below.  I am also struck by the fact that there is still a lot of
> speculation in derivatives- as Doug mentioned in RMBS and closer to my own
> research in the Agflation that occurred in 2006-2008.

I don't think I can be much help, Brad. I don't know much about the
food crisis at all, and I don't really know what Bryan and Rafferty
would say. It's not their position that valuations are always 'right',
or that derivatives markets are functional in the sense of being some
grand strategist for capital.

In general, (speaking for myself) I don't think speculation can keep
price booms going for all that long, and often speculation really is
stabilising. Like I said I don't know much about the particulars of
the food crisis. But I'd be sceptical of a line of argument placing
all the blame on speculation - it is one of those convenient arguments
that anthropomorphises bad market outcomes into the form of bad
people.

Mike Beggs