Category Archives: show me the money!
Don’t play with your food (futures)
How did William Pfaff get this article into the op-ed pages of the NYT?
The food crisis is a real one, with rice – basic to the diet in much of Asia – rising in price by 75% in two months, and the rise in wheat, equally important to most western countries, rising by 120% over the year. This risks famine in vulnerable countries.
Already 100 million additional people are considered by the World Bank to have been forced into extreme poverty, and there are food riots in Egypt, Haiti and elsewhere. Hence the urgency in proposals for new funds to support food aid programs.
The conventional explanations for the flare in prices are population growth, (misconceived) diversion of corn and soybeans to bio-fuel production, rising Asian and Middle Eastern demand for high-value foods, higher transport costs, and crop failures. Oddly little has been said about the role of speculation in the rise in commodity prices generally and specifically in food.
On the Chicago CME Group market, which deals in some 25 agricultural commodities – it is a merger of the former Chicago Mercantile Exchange and Chicago Board of Trade – the volume of contracts has increased by 20% since the start of the year and now has reached the level of a million contracts a day. This will soon exceed the rate of growth reached in all of 2007.
The hedge funds are now active in commodities and are playing the futures contracts, where upwards of 30 million tons of soybeans for future delivery are contracted for every day. They are also buying the companies that stock grains.
Speculative purchases have no other purpose than to make money for the speculators, who hold their contracts to drive up current prices with the intention not of selling the commodities on the real future market, but of unloading their holdings onto an artificially inflated market, at the expense of the ultimate consumer. Even the general public can now play the speculative game; most banks offer investment funds specializing in metals, oil, and more recently, food products.
It is astonishing in the present situation that the international financial institutions and government regulators have done little to control or banish this parasitical and anti-social practice. The myth of the benevolent and ultimately impartial market prevails against all contrary evidence.
Openly questioning FREE MARKET capitalism on the same pages that Thomas L Friedman and William Kristol ply their trade? Is the NYT tryin to create the earth-swallowing black hole, knowing that CERN never will?
Apparently, i misread the credits in our local newspaper. this was actually in the IHT.
down down down, and the flames get higher…
Bear Stearns, pushed to the brink of bankruptcy by what amounted to a run on the bank, agreed late Sunday to sell itself to JPMorgan Chase for a mere $2 a share, narrowly averting a collapse that threatened to cascade through the financial system.
The price represents a startling 93 percent discount to Bear Stearns’ closing stock price on Friday on the New York Stock Exchange.
Bankers and policy makers raced to complete the deal before financial markets in Asia opened on Monday, as fears grew that the financial panic could spread if Bear Stearns failed to find a buyer.
i dont see how a (quite literal) decimation can be viewed as anything but a collapse. i’d recommend you all to start stashing away some canned food and lots of drinking water.
on a side note: anyone think that the Fed and various large Wall Street firms are now running around like chickens with their heads chopped off?
someone call the waahmbulance
the levels of hysteria that are on show on the business news channels on TV regarding a relatively modest drop* in share prices over the past few months are getting ridiculous. to paraphrase a wise internet fish, it’s like no one has any medium term memory anymore.
that chart shows an approximate return of 33%. banks give a return on your mid-term deposits that are in the range of 9%.
if so-called ‘investors’ are not happy with a return of 33% for a year, there’s only one reason and that is pure unadulterated Greed. which is the primary reason that capitalism, in almost all shapes and forms, sucks like a black hole.
* the recent drop has been about 27-28%. however, this distaste should be quelled by long term graphs – check it out – 2yr graph here and even more emphatically with the 5yr figures here
similarly, one can have lots of fun with the ‘Nifty’ broad-based index as well
(Disclosure: Both my parents now work in Stock Market – related activities, and i’m really depressed about that)
i can haz linx?
ok, back from chennai, tired from lots of work(no one can sweet talk like grandmas) and making another trip for teh føtøgraphië.
so some links for you to mull over.
1) A grand don’t come for free from Lenin’s Tomb
2) Phony Obamania has bitten the dust
3) An interesting Goodbye to Commandante Castro
4) Obamania has bitten the Dust (Reprise)
5) Banksy Strikes again (and you can substitute Tesco for Wal-Mart as appropriate)
The (Rich) Gentleman’s Game
The following are the winning ‘bids’ for various players on the new Indian Premier League of Cricket:
Mahendra Dhoni: $1.5m (Chennai)
Andrew Symonds: $1.35m (Hyderabad)
Sanath Jayasuriya: $975,000 (Mumbai)
Ishant Sharma: $950,000 (Kolkata)
Irfan Pathan: $925,000 (Mohali)
Brett Lee : $900,000 (Mohali)
Jacques Kallis: $900,000 (Bangalore)
RP Singh: $875,000 (Hyderabad)
Harbhajan Singh: $850,000 (Mumbai)
Chris Gayle: $800,000 (Kolkata)
it’s really pretty funny that most of the players listed above were nowhere to be seen near the scene of the bidding. i realize that the amounts paid are pittances compared to what goes on in the Imperial Games of America(Baseball, NFL football, Basketball etc.) but is pretty staggering in this country. Hopefully it leads the way to an actual professional cricket circuit so the local cricketers do not have to rely on other jobs to survive.
on the other hand i cannot help but think that this will move cricket from a semi-patriotic international venture into a more capitalistic effort devoid of some of the magic that is attached to a national team. no doubt the hype will be terrific, coming as it does from one of the world’s richest cricket organizations and the potential for entertainment is indeed high but this whole thing still leaves a strange taste in my mouth for reasons i cant really explain.
flubber, maybe?
doop HQ 