Commodities May Experience Largest Weekly Plunge Since 1956

Largely led by silver, corn and copper, commodities are on their way to their biggest weekly loss since 1956, as concerns over the weakening global economy, along with the surging U.S. dollar against the euro, continue to put downward pressure on the sector.

The Reuters/Jefferies CRB Index dropped by 9.9 percent so far this week, again, its largest downward move in 52 years.

Two major factors are delayed weakness of the European market, which is just starting to show its strains, as well as the softening Chinese housing market. The overall U.S. market is of course further along than the two economies mentioned, and is already partaking in the pain.

As far as corn, copper and silver, they all have dropping to their largest weekly losses in over 20 years. The 18 percent fallout of silver is its worst performance for a week since 1983.

The labor department also released jobless claims figures for the week ending September 27, and they're the worst since 2001. That puts the jobless rate at about a five-year high of 6.1 percent.

It is spurring more debate on whether it's wise to implement a bailout plan which not only won't help in these difficult times, but will exasperate the problem, as history has taught us.

Commodity Giant "Ospraie Management" Shuts Down Largest Hedge Fund on Falling Prices

Poor decisions on the way prices for oil and natural gas were going, among others, has ended with the closing of the largest hedge fund run by giant Ospraie Management. The fund held up to $3.8 billion in assets at its height.

Industry analysts say that this could be just the beginning of a big correction by funds and investors heavily into commodities.

This is also more bad news for Lehman Brothers (LEH), which had a 20 percent stake in Ospraie.

Reflecting the falling value of commodities, Baltic Dry index, which measures costs in relationship to shipping dry bulk commodities like iron ore, fell by 4.95 percent to 6,146. That's the lowest it's been since February 2008.

The Reuters-Jefferies CRB index, which measures commodities prices globally, plunged to its lowest levels in sevn months as well, after agriculture and energy prices continue to fall.