The Impact of Backwardation Versus Contango on Investment Demand

Eric Zohn: Backwardation is an indication that we're not headed in toward any kind of recession because markets are in tight supply. But there's also another side to that which is you could spin it another way and say what the backwardation is telling you is that we'renot headed for deflation. So yes, the input cost from commodities can remain elevated and potentially even move higher even though we have a recession. That has to be factored into commodity prices as well in order to make it viable.