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Opalesque Exclusive: Commodities: The next perfect storm? From Kirsten Bischoff, New York: On April 2, Michael “Mack” Frankfurter, Managing Director, Operations Cervino Capital Management LLC and Chief Investment Strategist for Managed Account Research, Inc. presented to the 2008 IQPC Base Metals Investment Summit. Frankfurter’s message? Ringing the alarm on a thesis he has been working on regarding the commodities markets. Simply put, Frankfurter believes he is stating the obvious when he says “the securitization of commodities is the elephant in the room”.

The focus on commodities and the concerns regarding the final outcome of surging prices were echoed a number of times this week including the Barron’s cover story by Gene Epstein, “Guess Who’s Behind the Commodities Boom?”, as well as in a research report by Jeffrey Korzenik, Chief Investment Officer of VC&C Capital Advisers (Full report: Source). Opalesque spoke with both Frankfurter and Korzenik about the commodities markets.

End game signals In his presentation Frankfurter acknowledges that positive drivers of base metal commodities have included the weak dollar, infrastructure projects from abroad, and a two decade period of benign commodity prices which led to low levels of reinvestment and little increase in supply. However, he cites several contributors......................

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