Editor's Note: This article was originally published on Real Money at 11:00 a.m. EST on Oct. 1.
NEW YORK (Real Money) -- Of all the commodities to go nuts about, of all the commodities to make positive bets on, copper, coal and iron have to be the worst. And yet those are the three commodities that seem to have seen the most interest and attracted the most leverage, just when the great commodity boom ended.
I totally get the issues in oil. The U.S. took production up gigantically, from 5.6 million barrels a day to a staggering 9.3 million barrels a day from 2011 to 2015. That made sense. There's always going to be a fairly robust market for oil, and, most important, as prices decline, more does get used. We have terrific light sweet crude production, and we'd be getting a lot more for it if we could export it -- as right now the companies that produce it can't get enough refinery capacity domestically to be able to get as big a profit as they would like, although more is coming online.
But ramping up copper, coal and iron ore? These were uniquely stupid bets. Think about these lunkheads. Glencore (GLCNF) , a trading firm that is light on assets, spends $41 billion for Xstrata to become a gigantic copper miner, just when copper was rolling over. Freeport-McMoRan (FCX) , so confident in the cash flow of its copper mines, buys Plains and McMoran Exploration near the height of the oil boom at the end of 2012 for $9 billion.