Originally Posted by
twotic
I agree completely that over supply was/is a significant issue. Econ 101 with the old supply and demand graphs right! You are essentially just adding another point to the list I made though as to why none of this should be considered noise.
Not sure I agree with you regarding the implication that reduced western demand is a bigger driver than Chinese. Oil prices are a different kettle of fish and I agree that Chinese demand as been only a small factor driving prices down. On the other hand, agriculture, metals (this is the big one), & coal have been significantly affected via reduced Chinese demand. I believe the world bank recently cited reduced Chinese demand as the main driver for declines in metal prices.
Anyway I think you can go back and forth on the reasons why commodities prices are declining, but the point is a faltering Chinese economy will be damaging to equity markets and it appears as if we are seeing that play out.