Dennis Gartman of the Gartman Letter notes on Monday morning the degree to which swine flu ‘news-telling’ itself has become something of a pandemic.
Unsurprisingly, he notes, commodity prices have been affected. Grain markets were plunging “as Gartman wrote”, while soybeans traded limit down and wheat and corn followed suit. Hog and cattle futures traded electronically on the CME’s Globex platform, meanwhile, were also trading lower.
All of this, of course, is a massive over-reaction, according to Gartman. As he explains (our emphasis):
This is over-reaction of the very first order, for “swine flu” does not affect livestock; it does not render livestock production useless; it should not result in massive liquidation of the livestock herd… but that does not matter at the moment. At the moment the specs are liquidating livestock and grain, and the margin clerks have the pencils sharpened and their sell orders in hand. For the moment, nothing else… not even rationality… means anything. Panic, rather than reason, have swept through the markets and are having their way with them.
And with panic rather than reason sweeping through the market, Gartman says it’s the perfect time to buy grains and sell gold — as gold is quite expensive relative to the grain market, having been “bid up” on the news.
Related links:
Swine flu — more than you ever wanted to know - FT Alphaville
Swine fever panic, in pictures - FT Alphaville
