Tuesday, November 9, 2010
Barker's Newsbites: Tuesday, Nov. 9, 2010
A shout out to faithful reader Jared!
Less than a month, now, Cous!
Ya know... when you think about it... it's really wild that we've not only kept in touch for all these years, but that we've been friends, shared some great times - key events - and now Mary and I are heading over to Spain to visit you, Dana, and the kids!
Wild, man... just wild!
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* TWO-PARTER... (Part 1 of 2)
http://www.foreignpolicy.com/articles/2010/11/03/thinking_outside_the_borders
The day after the U.S. midterm elections, the Federal Reserve [was] yet again buying securities (it has bought more than $2 trillion of them since 2008), to keep down interest rates. U.S. interest rates have now been at historic lows for two years, a huge gift to the financial industry - but one that has done little to help the broader economy.
Not coincidentally, investment banking bonuses are at record levels, while unemployment remains [at] 9.6%...home foreclosures are at record levels, and there has still not been a single criminal prosecution - not one - for the reckless behavior that caused the financial crisis.
* INDEED, BARNEY FRANK WAS RE-ELECTED IN A LANDSLIDE!
It is blindingly clear that America needs different and better economic leaders - preferably leaders not compromised by past errors and conflicts of interest. Yet the overwhelming majority of the Obama team, not to mention Wall Street and academia, is composed of people who were part of the problem, or at best remained silent.
(*NOD*)
Well, I - Charles Ferguson - have a suggestion as to where excellent replacements can be found: outside the United States.
[T]here has been a deep shift in how the world views America's economic, financial, and foreign policy elites. Washington's days as unquestioned role model for the world are over. The rest of the world has a lot to teach America.
* LAYING THAT REALITY ASIDE, AND EVEN MORE UNPLEASANT REALITY IS THIS:
[T]he United States now has a major systemic corruption problem not only in its financial industry but also among its regulators and economists... All too frequently, America's top experts have been paid off, with varying degrees of subtlety, by the industries they are supposed to be evaluating.
Nowhere is this clearer than in American debate about the financial crisis.
* To be continued...
* CONTINUING... (Part 2 of 2)
The overwhelming majority of America's most prominent economists and financiers were astonishingly silent during the bubble, and many of them were deeply complicit in it, either through their policy roles, their highly profitable financial-sector involvements, or both. Not surprisingly, they have since opposed fundamental reform and been remarkably gentle in their assessments of American banking and regulatory conduct. For example, [present day Obama crony] Larry Summers was instrumental in crafting the late 1990s legislation that repealed the Glass-Steagall Act, which had kept a firewall between investment banks and lenders since the Great Depression, and banned the regulation of over-the-counter derivatives. (Later, as president and economist at Harvard, [Summers] made $20 million from hedge funds and investment banks, while denouncing the first warnings against the coming crisis)
Other senior administration officials have similar conflicts of interest and/or have dismissed warnings about the crisis. Federal Reserve chairman Ben Bernanke said in 2005 that housing prices never declined nationwide (which was not true, even then). Jacob Lew, nominated to be head of the Office of Management and Budget, and Michael Froman, coordinator of economic policy at the National Security Council, both made serious money while their employer at the time, Citigroup Alternative Investments, lost billions when the bubble collapsed. Laura Tyson, a professor at Univerisity of California, Berkeley who was director of the National Economic Council in the Clinton administration and may well replace Summers, has been on the board of Morgan Stanley for over a decade, and likewise remained utterly silent during the bubble.
(*SIGH*)
Glenn Hubbard, chief economic advisor to the Bush administration and now dean of Columbia Business School, has multiple advisory relationships with financial services firms, which bring him over a half a million dollars a year, and is a much sought-after commentator on economic policy. Yet in 2004, he co-authored an article with William C. Dudley, then the chief economist of Goldman Sachs, extolling the virtues of deregulation and financial derivatives.
* CORRUPT CRONY CAPITALISM KNOWS NO PARTY LOYALITY.
Over the last quarter-century, the academic and governmental elites of the United States have been progressively coopted and corrupted by powerful interest groups, particularly but not solely the financial services industry.
Want proof of why we should look to foreign economic advisors? The five most prominent experts in the United States who warned about the dangers of financial deregulation and the impending financial crisis were Raghuram Rajan, Simon Johnson, Nouriel Roubini, George Soros, and Charles Morris.
Rajan, a professor at the University of Chicago, is from India, and is now an advisor to India's prime minister. Johnson is from Australia, Roubini is an Iranian raised in Italy, and Soros is a Hungarian refugee educated in England.
Morris, the only one of the five born and raised in the United States, is an outsider too in his own way, not affiliated with any academic economics department.
Of course, there are [other] economic and financial experts in America who are untainted by these systemic problems. But there are surprisingly few who feel truly free to speak their mind and act on their principles, without fear of professional isolation or retribution.
http://paul.house.gov/index.php?option=com_content&view=article&id=1792:saudi-arms-deal-is-about-iran&catid=31:texas-straight-talk
* BY CONGRESSMAN RON PAUL (R-TX)
This month the [Obama] Administration notified Congress that it intends to complete one of the largest arms sales in US history to one of the most repressive regimes on earth. Saudi Arabia has been given the green light by the administration to spend $60 billion on some 84 new F-15 aircraft, dozens of the latest helicopters, and other missiles, bombs, and high-tech military products from the US weapons industry.
Saudi Arabia, from where 15 of the 19 September 11 hijackers came, is a family-run dictatorship, where there are no political parties, no independent press, and where any form of political dissent is met with the most severe punishment.
We are told that we must occupy Afghanistan to encourage more rights for women, an issue on which the Saudi regime makes the Taliban look rather liberal by comparison.
We are told that our increasingly aggressive policies toward Iran are justified by that country’s rigid Islamic laws and human-rights violations, while the even more repressive Islamic rule in Saudi Arabia is never mentioned.
Although the deal must be approved by Congress, there is little chance of any significant Congressional opposition for the above reason.
[T]he US weapons industry is underwritten by the American taxpayer.
From research and development to acquisition by the US military, the costs of the US arms industry are borne by American citizens.
[T]he enormous profits [the defense industry] makes selling weapons to countries like Saudi Arabia are of course privatized.
[T]he costs are socialized and the profits are privatized. There is a word for this arrangement and it is not “capitalism.”
http://blog.heritage.org/2010/10/27/morning-bell-red-tape-rising-2/?utm_source=Newsletter&utm_medium=Email&utm_campaign=Morning%2BBell
Next January the Environmental Protection Agency (EPA) is set to issue new regulations on emissions from boilers used in facilities like oil refineries, paper mills, and shopping malls. The EPA claims their new regulations will "only" cost the economy $9.5 billion by 2013.
[T]he American Chemistry Council says the cost will surpass $20 billion and kill 800,000 jobs.
Who is right? We don’t know. But what we do know is that if you total up all of the new regulations already passed by the Obama administration last year, using their own cost estimates, fiscal 2010 saw the largest increase in regulatory burdens placed on the U.S. economy in the nation’s recorded regulatory history.
[F]ederal agencies promulgated 43 new rules during the fiscal year ending September 30, 2010. The total cost of these rules, each one individually calculated by the Obama administration itself, was $28 billion.
According to...the Small Business Administration, existing total regulatory costs already amount to about $1.75 trillion annually. This “hidden tax” on the economy is nearly twice as large as the sum of all individual income taxes collected last year.
As bad as last year’s rising tide of red tape was it does not hold a candle to the tsunami of regulation the Obama administration is planning to inflict on the U.S. economy during their final two years in office. The 2,319 page financial regulation bill requires 243 new formal rule-makings by 11 different federal agencies. The 2,700 page Obamacare bill contains more than 1,000 instances where Congress instructed HHS Secretary Kathleen Sebelius to regulate the health care industry.
The Left likes to peddle the myth that President George Bush deregulated much of the U.S. economy. But this is just plain false. By every objectively measurable metric, the size and scope of the regulatory state grew significantly under his tenure. But President Obama’s regulatory regime is currently rising at more than twice the rate as President Bush’s did. No wonder our nation’s job creators can’t help us escape near double digit unemployment.
http://latimesblogs.latimes.com/washington/2010/11/joe-biden-transparency.html
* HERE'S THE HEADLINE:
Joe Biden Update: The VP Meets on Government Transparency Today. But that Meeting is Closed
(*SNORT*) FOLKS... YA JUST CAN'T MAKE THIS SHIT UP...!!! (*SNICKER*)
With President Obama out of the country tweaking things in Asia...
* OL' FOOT IN MOUTH JOE BIDEN IS WITHOUT ADULT SUPERVISION. (*GOOD-NATURED CHUCKLE*)
Possibly the most important event of the vice president's day today is to meet at 2:15 with Earl Devaney. Everyone knows [Devaney] as chairman of the Recovery Accountability and Transparency Board - the top guy monitoring the gazillion-dollar stimulus and the overdue economic recovery, and ensuring that the taxpayers financing same know all about it.
However, no one outside the room will know what goes on in that Biden-Devaney meeting. That's because the government meeting on government transparency has been closed.
* FOLKS... AGAIN... AMUSING... BUT ONCE YOU'RE DONE LAUGHING... (*SHRUG*)
* THIS IS AMERICA IN THE AGE OF OBAMA.
http://www.google.com/hostednews/ap/article/ALeqM5i6l0KDe5kZGkWiL1AzaP6Wm9aZxg?docId=82cb83607df04afb9400821844cf38ea
The United States is open to the idea of keeping troops in Iraq past a deadline to leave next year if Iraq asks for it, U.S. Defense Secretary Robert Gates said Tuesday.
* HEY LIB LURKERS... YOU DO UNDERSTAND THAT GATES WOULD HAVE NEVER SAID THIS WITHOUT OBAMA'S EXPRESS APPROVAL... RIGHT? (*SMIRK*)
U.S. and Iraqi officials have said for months that they expect Iraqi leaders to eventually ask for an extension of the military agreement with the U.S.
* HEY LIBS... DO ANY OF YOU RECALL ANY OF THE DEM POLITICIANS RUNNING FOR ELECTION/RE-ELECTION MENTIONING THIS LITTLE TIDBIT...??? (*SNORT*)
* TWO-PARTER... (Part 1 of 2)
http://paul.house.gov/index.php?option=com_content&view=article&id=1794:reject-the-welfarewarfare-state&catid=31:texas-straight-talk
* BY CONGRESSMAN RON PAUL (R-TX)
The annual budget soon will be $5 trillion unless Congress takes serious steps to reduce spending for entitlements, military, and debt service.
Congress cannot fix the budget and get our national debt under control by trimming fat and eliminating earmarks for “Bridges to Nowhere.”
* TRUTH...!!!
Real reductions in federal spending can be achieved only by getting to the meat of the federal budget, meaning expenditures in all areas.
* HEAR! HEAR!
With regard to entitlements, the 2010 Social Security and Medicare Trustees report tells it all. It paints a stark picture of two entitlement programs that cannot be sustained under even the rosiest scenarios of economic growth. No one, regardless of political stripe, can deny the fundamental problem of unfunded future liabilities in both programs.
* AHH... BUT THEY TRY... (BASTARDS...!)
[Americans need to] understand that Social Security was intended primarily to prevent old widows from becoming destitute.
* K-12 AND THEN COLLEGE... HOW MANY OF YOU LEARNED THIS IN SCHOOL?
Life expectancy in 1935 was only about 65, when there were several workers for each Social Security recipient. The program was never intended to be a general transfer payment from young workers to older retirees, regardless of those retirees’ financial need. Yet today Social Security faces an unfunded liability of approximately $18 trillion.
* FOR SOME... er... "STRANGE" REASON THEY FAIL TO TEACH THESE BASIC TRUTHS IN SCHOOL. (SONS OF BITCHES...!!!)
* To be continued...
* CONTINUING... (Part 2 of 2)
First, Congress needs to stop using payroll taxes for purposes not related to Social Security, which was a trick the Clinton administration used to claim balanced budgets.
* EXACTLY...!!! I'VE ADDRESSED THIS BEFORE. HOW MANY OF YOU WOULD BE AWARE - OTHER THAN BY READING IT HERE - THAT THERE WERE NO "BALANCED BUDGETS" DURING ANY THE CLINTON/REPUBLICAN CONGRESS YEARS?
* MY GOD, PEOPLE... YOU'RE LIED TO LEFT AND RIGHT! (YOU'RE LIED TO BY THE LEFT AND BY THE RINOs!)
Second, Congress should eliminate unconstitutional spending - including unnecessary overseas commitments - and use the saved funds to help transition to a Social Security system that is completely voluntary. At some point in the near future Congress must allow taxpayers to opt out of federal payroll taxes in exchange for never receiving Social Security benefits.
* EXACTLY...!!! COM'ON, FOLKS... DO THE FRIGG'N MATH! THE SYSTEM AS PRESENTLY CONSTRUCTED IS NOTHING MORE THAN A FAILING PONZI SCHEME. ANY HONEST ECONOMIST OR ACCOUNTANT WILL TELL YOU THAT. (BUT NOT THE MEDIA...! NOT THE DEMOCRATS...! DAMN FEW OF THE REPUBLICANS...!!!)
Medicare similarly faces a shortfall of $30.8 trillion in unfunded future benefits. The Part D prescription drug benefit accounts for approximately $15.5 trillion, or half of the unfunded Medicare liability. Congress should immediately repeal the disastrous drug benefit passed in 2003 by President Bush and a Republican Congress.
* JEEZUS CHRIST, PEOPLE, THE MATH IS THE MATH...!!!
Fiscal conservatives should not be afraid to attack entitlements philosophically. We should reject the phony narrative that entitlement programs are inherently noble or required by “progressive” western values. Why exactly should Americans be required, by force of taxation, to fund retirement or medical care for senior citizens, especially senior citizens who are comfortable financially? And if taxpayers provide retirement and health care benefits to some older Americans who are less well off, can’t we just call it welfare instead of maintaining the charade about “insurance” and “trust funds”?
* YES! YES!! YES!!!
Military spending and interest on the national debt similarly represent large federal expenditures that Congress must address by rethinking our foreign policy and exercising far greater oversight over the Federal Reserve and the Treasury department.
I have for a long time criticized our interventionist foreign policy and the Fed, and I will continue to do so. It’s time for Congress to face the fundamental problems that affect Social Security and Medicare, and show the courage necessary to make real changes to both programs by rejecting the welfare/warfare state.
* AMEN!
http://www.realclearmarkets.com/articles/2010/11/09/bernanke_ignores_basic_laws_of_economics_98749.html
Much ink is presently being spilled by the economic commentariat concerning soft demand in the economy, and ways to increase it. Lost on the deep thinkers that presume to know what makes us prosperous is the greater truth that demand is the last thing governments would ever need to stimulate.
As humans, our demand for what we lack is unceasing, by definition. That's why we work. If this is doubted, one need only camp out an Apple store the next time our leading technology innovator releases its next must-have product.
But what the average consumer knows that the fine tuners in Washington apparently don't is that in order to buy an iPad, consumers must produce something of similar value first, exchange it for dollars, then purchase the Apple product. And if they've not created value that is exchangeable for the iPad, they must find someone who has produced the iPad's cost in dollars, and who is willing to delay near-term consumption on the way to transferring their consumptive abilities to the eager buyer.
To make what's simple even simpler, all demand is the result of production first, and this has been the case for as long as man has roamed the earth. We produce so that we can consume.
Of course economists will continue to try to put the cart of demand before the production horse, and unsurprisingly the never disappointing Ben Bernanke - the walking definition of an economic fallacy - will carry the load for them from the Fed. As a result, Americans and the world will continue to suffer a Fed head that, with every utterance shows how very unequal he is to his job.
A self-proclaimed expert on the 1930s, Bernanke continues to intervene in the economy despite clear lessons from that decade showing that government intervention then turned what should have been a brief downturn into a Great Depression.
http://www2.chinadaily.com.cn/china/2010-11/09/content_11524811.htmhttp://www2.chinadaily.com.cn/china/2010-11/09/content_11524811.htm
The United States has lost its double-A credit rating with Dagong Global Credit Rating Co., Ltd., the first domestic rating agency in China, due to its new round of quantitative easing policy.
The Chinese rating agency said the downgrade reflected the US's deteriorating debt repayment capability and drastic decline of the US government's intention of debt repayment.
"The serious defects in the US economy will lead to long-term recession and fundamentally lower the national solvency," Dagong said in a report.
The Chinese rating agency said the Federal Reserve's new round of quantitative easing would further depreciate the US dollar and was entirely counter to the interest of the creditors.
* AND THE FRIGG'N RED CHINESE ARE ABSOLUTELY FRIGG'N RIGHT...!!! (*MASSIVE MIGRAINE HEADACHE*)
"The credit crisis is far from over in the United States and the US economy will be in a long-term recession," Dagong Global warned in the report, adding a weakening greenback will cripple US capability to attract dollar capital reflow.
"In essence, the US government's move to devalue the dollar indicates its solvency is on the brink of collapse," said the report.
* I AM DEEPLY ASHAMED OF MY COUNTRY.
http://www.sacbee.com/2010/11/09/3170206/californias-unemployment-fund.html
[California's] state unemployment insurance fund,...has a estimated $10.3 billion deficit.
* YEP NO ONE WILL BE ARRESTED... NO ONE WILL GO TO JAIL...
(*SIGH*)
California has borrowed about $8.5 billion from the federal government to keep benefits flowing, and the repayment obligations are coming due.
(*SIGH*)
"The longer we go without a fix, the bigger the hole becomes," said Loree Levy, a spokeswoman for the Employment Development Department, which doles out the benefits. She said the U.S. government is scheduled to bill the state about $362 million in interest next year.
* $362,000,000 WASTED IN INTEREST ALONE. (AND NO ONE WINDS UP IN JAIL...???)
The Legislature would have to find the money somewhere to pay it; it wouldn't be allowed to dip into the unemployment fund, she said.
* QUESTION: WHY WAS CALIFORNIA'S DEMOCRAT-CONTROLLED LEGISLATURE "ALLOWED" TO CREATE THIS MESS IN THE FIRST PLACE...???
In 2001 the Legislature nearly doubled benefit levels without raising taxes. In 2008 Gov. Arnold Schwarzenegger proposed raising taxes and cutting benefits, but the plan went nowhere in the Legislature.
* SCHWARZENEGGER IS LIKE BUSH IN THE SENSE OF... NO MATTER HOW BADLY HE SCREWS UP, YOU CAN ALWAYS POINT TO THE DEMOCRATS AS BEING EVEN MORE TO BLAME FOR THE RESULTANT MESSES!
Over the last two years combined, the state has paid out $20.6 billion in benefits while taking in $9.9 billion in taxes...
(*SARCASTIC CLAP-CLAP-CLAP*
That's left California's unemployment fund with a deficit of $10.3 billion, which is expected to grow to $13.4 billion next year.
* GREAT... (*SIGH*)... WONDERFUL... (*SIGH*)... OUTFRIGG'NSTANDING... (*SMIRK*)
http://news.yahoo.com/s/ap/20101109/ap_on_go_ca_st_pe/us_hud_investigation_acorn_1
A government audit says the advocacy group ACORN should reimburse the government $3.2 million for failing to adequately show that lead removal work was performed at a reasonable cost.
The auditors also say some grant money was spent inappropriately, including for political campaigns and fundraising.
Congress already has cut off ACORN's federal funding after allegations of voter registration fraud and embezzlement.
The Department of Housing and Urban Development's inspector general looked at spending designed to eliminate lead poisoning. About $2 million was questioned because the group didn't document open competition by contractors.
Another $1.2 million was found to have been spent on ineligible activities.
* FOLKS... WHAT'S IT GONNA TAKE...?!?! THE DEMOCRATIC PARTY - ESPECIALLY WITH THE OBAMA ADMINISTRATION IN CHARGE - IS THE PARTY OF CORRUPTION ON A SCALE I DON'T BELIEVE WE'VE EVER SEEN IN AMERICA BEFORE.
http://online.wsj.com/article/SB10001424052748703514904575602231815453378.html?mod=WSJ_Opinion_LEADTop
It would be hard to find two more unlikely intellectual comrades than Robert Zoellick, the World Bank technocrat, and Sarah Palin, the populist conservative politician. But in separate interventions yesterday, the pair roiled the global monetary debate in complementary and timely fashion.
The former Alaskan Governor showed sound political and economic instincts by inveighing forcefully against the Federal Reserve's latest round of quantitative easing. Mrs. Palin also exhibited a more sophisticated knowledge of monetary policy than any major Republican this side of Wisconsin Representative Paul Ryan.
(*NOD*) (*THUMBS UP*) ABSOLUTELY, POSITIVELY!
Stressing the risks of Fed "pump priming," Mrs. Palin zeroed in on the connection between a "weak dollar - a direct result of the Fed's decision to dump more dollars onto the market" - and rising oil and food prices.
* EXACTLY, FOLKS! RECALL LAST YEAR'S EURO CRISIS - GREECE... THE REST OF THE P.I.G.S....? THAT CRISIS PUSHED THE DOLLAR - TEMPORARILY - UP. IT WASN'T THAT THE U.S. ECONOMY WAS IMPROVING; IT WAS THAT INVESTORS WORRIED THAT EUROPE WAS MELTING DOWN. THAT BRIEF WINDOW OF "DOLLAR STRENGTH" WAS RESPONSIBLE FOR PUSHING BACK MY STAGFLATION PREDICTIONS. NOW... COMMODITIES ARE SHOOTING UP. HEY, FOLKS... GUESS WHAT... YOU NEED FOOD AND FUEL.
[Gov. Palin] also noted the rising world alarm about the Fed's actions, which by now includes blunt comments by Germany, Brazil, China and most of Asia, among many others.
Mrs. Palin's remarks may have the beneficial effect of bringing the dollar back to the center of the American political debate, not to mention of the GOP economic platform. Republican economic reformers of the 1970s and 1980s - especially Ronald Reagan and Jack Kemp - understood the importance of stable money to U.S. prosperity.
* FOLKS... I WAS AROUND BACK THEN! REAGAN'S POLICIES WORKED...!!! OBAMA'S POLICIES ARE THE EXACT OPPOSITE OF REAGAN'S. (*JUST SHAKING MY HEAD*)
On the other hand, the Bush Administration was clueless. Its succession of Treasury Secretaries promoted dollar devaluation little different from that of the current Administration, while the White House ignored or applauded an over-easy Fed policy that created the credit boom and housing bubble that led to financial panic.
* YES...!!! YES...!!! AS I SCREAMED DAY IN AND DAY OUT DURING THE BUSH ADMINISTRATION. (REMEMBER, FOLKS... I KNEW WHAT WOULD HAPPEN... I PREDICTED IT...)
Misguided monetary policy can ruin an Administration as thoroughly as higher taxes and destructive regulation, and the new GOP majority in the House and especially the next GOP President need to be alert to the dangers. Mrs. Palin is way ahead of her potential Presidential competitors on this policy point, and she shows a talent for putting a technical subject in language that average Americans can understand.
(*WILD APPLAUSE*)
Which brings us to Mr. Zoellick, who exceeded even Mrs. Palin's daring yesterday by mentioning the word "gold" in the orthodox Keynesian company of the Financial Times. (This is like mentioning the name "Palin" in the Princeton faculty lounge.)
(*GRIN*)
* I URGE YOU FOLKS TO READ THE FULL ARTICLE.
http://www.ft.com/cms/s/0/249211fc-ec1d-11df-9e11-00144feab49a.html#axzz14pphX5HJ
The spectre of inflation loomed over agricultural markets after the US slashed key crop forecasts and warned of shortfalls in grains.
The agriculture department on Tuesday cut estimates of US corn yields for a third successive month, forecast record soyabean exports to China and warned of the slimmest cotton stocks since 1925. Mike Stevens, a veteran Louisiana cotton broker, said: “The report is the most bullish in our lifetime.”
* AIN'T THE AGE OF OBAMA GRAND!
“The combined production shortfalls and dramatic potential stock drawdowns mean a much tighter supply picture than just a few months ago,” the agency said in a separate grains report.
* HEY, FOLKS... WERE YOU FOLLOWING AWHILE BACK WHEN I WAS "REPORTING" ON THE OBAMA ADMINISTRATION'S ETHANOL POLICIES AND HOW THE OBAMA ADMINISTRATION WANTS EVEN MORE CORN DIVERTED INTO ETHANOL PRODUCTION?
(*JUST SHAKING MY HEAD*)
Abdolreza Abbassian, senior grains economist at the UN’s Food and Agriculture Organisation in Rome, said the report was “alarming”.
“It reiterates the tightening of the overall situation as we go into 2011, which means eventually even those basic food commodities that haven’t risen so much could be influenced,” he said. The FAO food price index is nearing the highs set in mid-2008.
* FASTEN YOUR SEATBELTS, PEOPLE...!
The USDA said corn yields in the US, the world’s largest grower and exporter, would be 154.3 bushels per acre, down 1.5 bushels from an October forecast that was also a sharp downward revision. At 827m bushels, stocks left over from this year’s harvest would be the lowest in 15 years. Record US ethanol production has added to demand.The USDA said corn yields in the US, the world’s largest grower and exporter, would be 154.3 bushels per acre, down 1.5 bushels from an October forecast that was also a sharp downward revision. At 827m bushels, stocks left over from this year’s harvest would be the lowest in 15 years. Record US ethanol production has added to demand.
* YEP! RECORD ETHANOL PRODUCTION! OBAMA'S LATEST POLICY BRAINSTORM!
http://www.ft.com/cms/s/0/5f2c2b3c-eb6d-11df-b482-00144feab49a.html#axzz14prkSgbL
The price of natural rubber, the raw material used in tires [etc., etc., etc.] has surged to an all-time high after the worst floods in decades hit Thailand, the largest producer.
Physical rubber prices in Thailand have jumped 7.4% in a week...
(*HEADACHE*)
That exceeded the level hit in April when rubber broke one of the longest standing price records in commodity markets, surpassing the peak of 1952 when the rise was driven by fears about the spread of the Korean war that triggered panic buying. It has tripled since early 2009.
* FOLKS... WE'RE IN TROUBLE.
Some tire companies have raised prices three times this year, and industry executives say further price increases are likely.
Roy Armes, chief executive of Cooper Tire & Rubber of the US, said he expected commodity prices to continue rising into next year. “We expect raw material costs will continue to be elevated in the near future and have implemented price increases around the globe,” he said.
Bridgestone, the Japanese-based company that is the world’s largest maker, said on Friday that it had been “plagued” by higher raw materials costs as well as the strength of the yen.
The tightness in the rubber market is unlikely to be temporary, analysts warn. Demand is growing apace, driven by voracious consumption in emerging markets, led by China. The country’s consumption of truck tires in new vehicles – each of which uses about 20kg of rubber – grew 57% in the first nine months of this year compared with 2009, according to Pirelli.
Jom Jacob, senior economist at the Association of Natural Rubber Producing Countries, expects Chinese natural rubber imports to rise 41.5% in the fourth quarter from the same quarter a year earlier. At the same time, persistent underinvestment into new rubber supply means that tightness is likely to continue.
(*MIGRAINE HEADACHE*)
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