Burnt by contango
Investors have poured tens of billions of dollars into commodity index products, but some claim the flood of capital has caused structural changes in commodity markets. And as spot prices fall, it could lead to an exodus of cash from these investments. By Navroz Patel
Speculative bubbles have been a feature of the markets for about as long as people have been trading. One of the earliest instances of this market phenomenon was associated with tulips in the Netherlands during the 1630s. More contemporary examples have focused on Japanese real estate during the 1980s, and the stocks of technology companies that sprouted up during the 1990s in California's Silicon Valley. Back in the present, soaring commodity prices are prompting some to argue that futures
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