Look Who's Talking. Practically Everyone.

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Commodities found a bright patch of sunshine in the midst of today's storm of financial news and related fears. In fact, they had quite a party, if one just briefly glances at the Kitcometals.com page base metals price tickers. The industrial metals recorded gains of anywhere from 3 to 8 percent on the day. Evidently, the selective radar of speculative funds conveniently ignored the index of U.S. leading indicators falling by more than three times the analysts' estimates last month.

As well, commodity buyers ignored the obvious shrinkage in the Eurozone's service and manufacturing sectors. Instead, they focused on the alternative asset side of the allocation equation as a swoon in the dollar and a massive 'cold-war' rally in oil made the battered commodity complex an attractive parking place for money for the moment - once again. And, once again, we have prima facie evidence that large amounts of money sloshing around in relatively small markets makes for volatile and impressive-looking trading sessions.

Credit problem cold shivers once again went up and down the spines of investors as the parade of names on their minds was quite familiar: Freddie & Fannie, Lehman, Goldman, Morgan. The issues, the same. How much will be written off, when, who might be taken over, and especially by whom. In the case of the on-and-off moribund F & F it looks like Uncle Sam might have to do the adopting -something that should have been the case years ago. In Lehman's case, the would-be parents (Korea Development Bank and China's Citic Securities) broke off secret talks to acquire half of the formerly largest underwriter of mortgage bonds.

In the midst of all this, the US' largest landlord -Sam Zell- is out shooting fish in a barrel, buying distressed...debt as opposed to actual apartments. He expects to do very well thank you, in circa one year -when he sees a recovery in housing. Mr. Zell also sees the implicit survival (by hook or by crook) of the GSEs as they represent quite a piece of the housing pie in the US.

Thus, back to the jitters-induced purchases; they were good enough to send the yellow metal to a one-week high near $840 and start people thinking about whether the $775 level was overdone and/or achieved too fast, a near-term bottom, or the last buying opportunity, ever. We will go with the first one. Gold above $820 is nice; gold above $875 or so is what's required to get back on track as far as some are concerned. Could a clash develop once again between prices and the start of Indian buying season? Stay tuned.

New York spot trading showed a $19.70 gain (2.41%) on the day, quoted at $832.50 as participants watched the euro gain to $1.4873 on the dollar (despite having its own problems). Adding to the buying today were reports that central banks (but not the Swiss one) are apparently choosing to hold on to their gold and could bring the lowest amount of annual gold disposals to the market since going under self-imposed sales limits back in 1999.

Some of today's dollar woes were reflected in the very large $5.25 gain in crude oil values, but talk was that the bulk of such gains came from rising East-West tensions. Russia is beginning to register on the anxiety scale in a serious way, as people are paying attention to that bear instead of the one seen running around in various commodity markets just last week. Silver rose 51 cents to $13.76 and platinum managed to get back to well above $1400 with a $77 gain, last seen quoted at $1433. Palladium climbed $4 to $287 per ounce. German automakers come back from summer vacations next week and the markets are hopeful on that front. Now, if they can just sell what they will make. Especially in the US.

Important people are and will be making various prononucements about the current and near-term state and direction of the US economy. It remains the largest global force and you can bet that its fate is on the minds of everyone from academicians, to politicians, to market technicians. They have a smorgasboard of issues to pick from and try to decide what to call the conditions we are experiencing, as well as their job cut out for them in how to deal with the same. Let's take a look at further samplings from the world of theory and practice. Bloomberg and Marketwatch offer quotes from a whole bunch of smarter-than-us fellows and ladies, as follows:

" Nobel Prize-winning economists including Myron Scholes and Joseph Stiglitz predicted the credit squeeze will inflict more pain on global growth and Goldman Sachs Group Inc. projected half of the world economy faces recession. ``There will be a global recession,'' Scholes said in an interview today at a conference in Lindau, Germany, featuring 14 Nobel laureates in economics. Stiglitz forecast the world economy would continue to perform below its potential for some time, resulting in a ``social loss'' through weaker employment."

" The U.S., Japan, the 15-nation euro area and the U.K. are ``either in recession or face significant recession risks in the months ahead,'' Goldman's London-based international economist Binit Patel said in a report to clients today, noting such nations account for half of the world economy. The ``worst is yet to come,'' said Hong Kong billionaire Li Ka-shing in Hong Kong today. The credit squeeze is turning Li ``very conservative about acquisitions,'' he said."

``The financial sector needs to shrink,'' said Kenneth Rogoff, former chief economist at the International Monetary Fund, in an interview in Singapore yesterday. ``I don't think simply having a couple of medium-sized banks and a couple of small banks going under is going to do the job.'' Rogoff also said ```the worst is yet to come in the U.S.''

" The outlook for the U.S. economy will prove a hot topic when central bankers and economists gather tomorrow for the annual Federal Reserve conference in Jackson Hole, Wyoming. ``The economy has really shown one sign after another of weakening,'' Harvard University Professor Martin Feldstein said in an interview in Jackson Hole today."

" Citigroup Inc. economist Steven Wieting said in a report today that every U.S. downturn of the last six decades has been linked with a global slump. Economists at UBS AG led by Larry Hatheway this week cut their forecast for global growth next year to 2.9 percent from 3.1 percent, close to the 2.5 percent deemed a world recession."

"You don't know what is going to break loose," said former Fed Governor Susan Phillips. The theme of the Fed's Jackson Hole seminar this year, 'Maintaining stability in a changing financial system,' seems more like a prayer to the mountain gods than anything else."

"I have a feeling that it is far from over," said Barry Eichengreen, an economic historian at the University of California at Berkeley. Eichengreen and other experts see mounting credit woes for banks from credit cards and other consumer loans."

Not everyone shares the gloomy outlook. It's just that they are gloomy about different things.

"I don't mean to sound like Phil Gramm...but there has been a huge amount of financial market disruption and the actual impact on the real economy has been limited," said Adam Posen, deputy director of the Peterson Institute for International Economics. Gramm, a former senator, quit as a top economic adviser to Republican presidential candidate John McCain, after he said Americans were "whining" about the economy. So far this year, there hasn't been a negative gross domestic product number."

"And it is very easy to overstate the problems of the financial system, warned Minneapolis Fed Governor Gary Stern in a television interview earlier this week."

" If the dollar continues to weaken, then we may have seen a bottom in gold," said Dale Doelling, chief market technician at Trends in Commodities, in emailed comments. "The stock index futures most likely will break the July lows and this will be very supportive to bonds and the precious metals going forward."

For now, Doelling was unwilling to "sound the all clear" to buy gold, but pointed out that on Monday, traders will have a clearer picture of what lies ahead for the market."

"We suspect that with the dollar's advance on hold for now and energy prices moving higher ... metals will also push higher in sympathy over the next few days," said Edward Meir, an analyst at MF Global, in a research note.

"In addition, we suspect that there will be a good deal of short covering that could also aid the advance," Meir said. "However, this will be a rally in what seems to us to be a general drift lower, as the bearish macro background is still very much with us."

So, look for Mr. B and Jackson Hole. Something will come from their words to yield the next push higher/lower.

Monday may tell more, as was mentioned.

Happy Trading.

PS - We erroneously located China's ICBC bank in India while thinking about India's own ICICI when we relayed the story/factoid of the world' most profitable bank. Acronyms, acronyms. For that mistake, we apologize to our readers.