Latest News

Commodity MusingsNews:

August 2021 Commodity Musings

Kimura Capital – 

I like trees. I always have done, ever since I was a kid. They always seemed to induce that feel-good factor when you were surrounded by them as opposed to the concrete jungles that many cities are these days, with just continual building onwards and upwards.

I reckon in the finance world, Trade Finance, would be the fluffy trees/nature side of the coin, whilst corporate finance is a more harsh, brutal concrete world. Personally speaking, I get more of a buzz out of looking at a structured deal involving lots of moving parts; ships, storage, logistics, etc compared with the paperwork involved in an MBO or corporate takeover.

There’s a great party game for you! Are you a concrete person or a tree?

That leads us nicely into the one thing all sides of the finance world have in abundance – paper. Lots of it. Invariably all sitting on desks throughout the world with various scribbles all over it. Hence, the drive to move to a paperless world.

It seems, however, to be taking a long time to get there. I’m not sure how many people remember the SeaDocs project by Chase Manhattan in the 80s which promised a new golden age? I’m a natural cynic and will believe it when I see it but with so many competing schemes and their lack of integration with each other, we’ll see …. After all, as Highlander said, “there can only be one.”

So, let’s complete the circle here. If we minimise paper, it should mean we don’t have to cut down so many trees. I would like that.

I was reading an article this past weekend in the paper, (can’t avoid it, can I?) about the lack of new innovative films and how the mainstream industry plays safe with a succession of prequels/sequels. In theory this is just giving the proletariat what they want, at least until the rule of diminishing returns kicks in. In contrast with the commodity world where there seems to be a demand for new structures, a la Greensill, but the reality is there is nothing new! It’s just the old structures rehashed with new names enabling certain financial institutions/traders to indulge in stroking each other egos. Diagrams are good for explaining things and I’m a big fan of them but there should be a legal limit on the number of arrows you can have in one.

I’ll leave you with the immortal words of Tom Petty “most things I worry about never happen anyway.”

alan-gordon-commodity-musings-image-2 Alan Gordon