Raw ingredients for Chocolate Bunnies

Raw materials for chocolate bunnies... Commodity prices are down down down. (Easy measure is the RJ/CRB Index - ticker: CRY.) The RJA in my PA is down too - argh!

Global strategist Jonathan Wilmot of Credit Suisse sees more downside in a recent note:

"The bottom line: we think that de-leveraging has now spread to the commodity complex, and that this will probably see a nearly full retracement of the unprecedented spike in the broad CCI index of commodity prices that took place over the last six to seven months. Gold and oil coming back to around $800 and about $80 are quite possible in that event, with less damage likely in base metals. And even if we are right, that does not necessarily mean that the long-term bull market in commodities is over, especially perhaps for agricultural products."

My view is that the commodity spike was excessive and ripe for profit taking (as was the obverse of that, the Dollar short) and that ahead of a long weekend it makes sense to reduce risk - especially with the lower than expected rate cut implying marginally less near term weakness in the USD. So lock in profits and sell commodities, lock in profits and cover USD shorts and then wait for next week to roll on by before putting the trades back on. Is the USD really going to strengthen that much, (if at all, given the liquidity injections) and have housing and consumer fundamentals really changed so much for the better??

And with Credit Suisse reporting bigger losses and "intentional misconduct" and indicating a tough March (MS, LEH and GS reported results to end-February) the financials aren't really looking SO safe, are they?