Today's Reading List

COMMODITIES
Platinum Falls to Gold's Level
WSJ, 19-Dec-08

On Wednesday, platinum prices settled below gold prices for the first time since the 1990s (Jan. 21, 1994), as prices have been pummeled on weak demand from the auto industry, which accounts for more than half of platinum consumption. That day, platinum settled at $865.20 and gold at $867.50.... Still, gold's edge over platinum probably isn't sustainable. Above-ground stocks of platinum are much smaller than those of gold.

Platinum prices are trading roughly on par with gold, a far cry from the white metal's $1,200 price lead earlier in the year and highlighting the woes of the auto industry, a big platinum consumer ...

OIL
Oil Drops Under $40 on Demand Fears
WSJ, 19-Dec-08

The big price drop over the past two days was exacerbated by the lack of available space at Cushing, Okla., the oil-storage hub where the physical barrels that underpin the Nymex futures contract are delivered. Inventories topped 27.5 million barrels at Cushing last week, just 500,000 barrels below the all-time high in April 2007, when a Texas refinery fire led to a stockpiling of crude... Investors with expiring contracts to buy crude need to sell out this week, or pay a hefty fee to avoid taking delivery. Physical delivery of crude contracted in the futures market is rare, but with tank space at Cushing difficult to come by, physical delivery is especially undesirable due to rising storage costs. The record gap between the first and second-month contracts -- $5.81 at Thursday's settlement -- reflects the scarcity of buyers willing to take crude for January delivery so close to expiration.

Oil's plunge below $40 a barrel is partly an anomaly due to the expiring January crude-futures contract. It also may be a sign of things to come ...

HOUSING
Tax Break May Have Helped Cause Housing Bubble
NYT, 19-Dec-08

But many economists say that the law had a noticeable impact, allowing home sales to become tax-free windfalls. A recent study of the provision by an economist at the Federal Reserve suggests that the number of homes sold was almost 17 percent higher over the last decade than it would have been without the law... The provision — part of a sprawling bill called the Taxpayer Relief Act of 1997 — exempted most home sales from capital-gains taxes. The first $500,000 in gains from any home sale was exempt from taxes for a married couple, as long as they had lived in the home for at least two of the previous five years. (For singles, the first $250,000 was exempt.).

Ryan J. Wampler had never made much money selling his own homes. Starting in 1999, however, he began to do very well. Three times in eight years, Mr. Wampler — himself a home builder and developer — sold his home in the Phoenix area, always for a nice profit. With prices in Phoenix soaring, he made almost $700,000 on the three sales ...