Happy New Year!

Have a Happy, Healthy and Prosperous 2007!

The artwork on the front of The Independent of the UK is indeed a work of art to start the New Year, and the paper kicks things off with a worldwide weather forecast for 2007: the hottest year on record for the planet. These folks probably have no clue about what they're really talking about since forecasting weather 2 weeks from now is pretty much a guess let alone 7 months from now.

But regardless of the debate over global warming agendas, or even the validity of The Independent article - changing weather patterns have presented some major trading opportunities. This past summer the wheat market exploded as the crop whithered Down-under; energy has been all over the map the last few years due to hurricane seasons and the growing scarcity of fresh water is creating new investment candidates. With only 2 months remaining in meteorological winter it is not too soon to actually give some consideration summertime commodities investment plays.

But this caution as well. An assumption was made in 2006 by many that there would be another out of control hurricane season merely because global temperatures have ramped up in recent years; yet last year was a very quiet season - surprising even the experts. It was a total debacle for a single errant trader at Amaranth who set up billions in bullish natural gas spreads which went south when no hurricanes appeared in GOM to destroy anything. Professor Jones, who is cited at the top of The Independent article, and his forecast have yet to verify. The report also lays on thick the impact of El Nino, which if you read DT's blog (http://dtwxrisk.blogspot.com/) is a day late and a dollar short.

Nothing is Gospel in that Independent article WRT to how the WX will actually pan out this summer; it actually looks like some pretty junky and sensational reporting to me. I do believe the earth has warmed up quite a bit (who can deny that?) but the meteorology in the article used to explain what's going to happen in even Great Britain this summer was completely lacking. There's a lot more to weather patterns that just El Nino. But the article at least reminded me to remind that it gives us the opportunity to consider the coming warmer weather related trades and remember how some expected weather related trades never came to pass last year.