From FT: C is for commodities, one of the last bubbles to burst during 2008. And what a pop. Oil was first to go, in July, followed by anything dug from the earth. From its peak, the global mining index has fallen 70 per cent, scattering debris from Russia to Australia and sundering deals such as BHP Billiton’s takeover of Rio Tinto.
What to learn? First, the mining industry has a long history of irrationality and this was a classic speculative “rush”. As for all bubbles, there was a new paradigm, in this case demand from emerging markets, particularly China….. Full Article: Source