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Is Goldman Sachs' Commodities Call a Suckers Bet?

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Goldman Sachs (GS) commodities analyst Jeffrey Currie has turned bearish on the "CCCP basket" -- not a carrying case manufactured in the former Soviet Union, but a long position in crude, copper, cotton, and platinum.

''Although we believe that on a 12-month horizon the CCCP basket still has upside potential, in the near term risk/reward no longer favors being long in the basket and we are recommending closing the position,'' Currie wrote.

The firm believes high prices are going to decrease demand for the metals, especially platinum -- which has large exposure to the auto sector as it continues to contend with the aftermath of successive disasters in Japan.

Regarding oil, Goldman says, ''Not only are there now nascent signs of oil demand destruction in the US, but also record speculative length in the oil market, elections in Nigeria and a potential ceasefire in Libya that has begun to offset some of the upside risk leaving price risk more neutral at current levels."

However, money manager Shawn Hackett, founder and president of Hackett Financial Advisors, a Boynton beach, Florida firm with a focus on commodities, is skeptical.

"The key question is whether they really believe this or if this is just another smoke and mirror game," he wrote in an email. "For the most part Goldman is notorious about saying one thing publicly and then taking the opposite action privately. Remember, to rack up the huge trading profits that they do, means, by definition, that they are doing opposite of what everyone else is doing."

In fact, Goldman is also in the news today after the Senate Permanent Subcommittee on Investigations released a report that says the company misled investors at the beginning of the credit crisis. And, of course, the fraud charges brought by the SEC against GS last year related to the John Paulson/Subprime Mortgage/Abacus fiasco is still fairly fresh in peoples' minds.

As Shawn Hackett told me, "If they telegraphed their major moves ahead of time, they could never take advantage of the blind herd following the blind."
POSITION:  No positions in stocks mentioned.