Food Bubbles & Starvation by Broker

I never got around to finishing what was intended to be a thoughtful commentary on this Harper’s article, but since John posted about this earlier, I’m going to give you all the link, at least. Frederick Kaufman, “The Food Bubble: How Wall Street starved millions and got away with it”:

Agriculture, rooted as it is in the rhythms of reaping and sowing, had not traditionally engaged the attention of Wall Street bankers, whose riches did not come from the sale of real things like wheat or bread but from the manipulation of ethereal concepts like risk and collateralized debt. But in 1991 nearly everything else that could be recast as a financial abstraction had already been considered. Food was pretty much all that was left. And so with accustomed care and precision, Goldman’s analysts went about transforming food into a concept. They selected eighteen commodifiable ingredients and contrived a financial elixir that included cattle, coffee, cocoa, corn, hogs, and a variety or two of wheat. They weighted the investment value of each element, blended and commingled the parts into sums, then reduced what had been a complicated collection of real things into a mathematical formula that could be expressed as a single manifestation, to be known thenceforward as the Goldman Sachs Commodity Index. Then they began to offer shares.
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As was usually the case, Goldman’s product flourished. The prices of cattle, coffee, cocoa, corn, and wheat began to rise, slowly at first, and then rapidly. And as more people sank money into Goldman’s food index, other bankers took note and created their own food indexes for their own clients. Investors were delighted to see the value of their venture increase, but the rising price of breakfast, lunch, and dinner did not align with the interests of those of us who eat. And so the commodity index funds began to cause problems.
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Wheat was a case in point. North America, the Saudi Arabia of cereal, sends nearly half its wheat production overseas, and an obscure syndicate known as the Minneapolis Grain Exchange remains the supreme price-setter for the continent’s most widely exported wheat, a high-protein variety called hard red spring. Other varieties of wheat make cake and cookies, but only hard red spring makes bread. Its price informs the cost of virtually every loaf on earth.
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Good News for People Who Love Bad News

Break out the champagne, spending on healthcare is down:

The economic crisis in the United States has reduced the use of routine medical care, and the cutbacks here are much deeper than in countries with universal health care systems, researchers say in a new report.








Wrong About Everything

These guys are reaching Bill Kristol levels of prediction making:

As 2010 began, there was nearly unanimous agreement in financial circles on at least one thing: Interest rates were sure to rise during the year.

Quite to the contrary. As Labor Day approaches, interest rates have collapsed, plunging along with economic optimism.

That turn of events, which has shocked savers and stunned investors, appears to indicate that financial markets’ worries are turning in a very different direction from those of many governments.

The governments are seeking ways to bring down budget deficits, fearing that without austerity they could go so far into debt that they would never be able to borrow again. Investors in the financial markets seem to be much more concerned by the possibility of renewed recession and a general deflation that could send asset values and prices down.

Of course the reason governments are focused on deficits and austerity is that the Galtian geniuses spent the last two years screaming about the budget deficit and austerity or the bond masters would kill us all in our sleep. The entire time, of course, Krugman’s hair was on fire and he was screaming bloody murder, but since he is a dirty hippy, he doesn’t count.

So now, because the assholes who created our financial mess were then wrong about the way to handle that mess, we can look forward to even more economic pain. Another round of bonuses for everyone!








Whose “Anchor” Baby?

The SPLC continues its marathon efforts to give a voice to the silenced:

Mississippi officials conspired to take the infant of an illegal immigrant from Mexico so the girl could be adopted by a white couple, a civil rights group charged Thursday in a federal lawsuit. The Southern Poverty Law Center said Cirila Baltazar Cruz was separated from her daughter, Ruby, for a year before her child was returned to her in 2009 after the intervention of the group.
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Cruz had the baby at Singing River Hospital in Pascagoula in November 2008. Two days after the child was born she was taken from her mother when the Mississippi Department of Human Services deemed Cruz unfit, according to the lawsuit. Cruz – who spoke no English and little Spanish and could not read or write – was interviewed by a hospital interpreter. The interpreter spoke Spanish, not Chatino, a dialect indigenous to Cruz’s native Oaxaca in rural Mexico, the group’s lawsuit alleges.
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After talking with Cruz, the interpreter told one of the immigrant’s relatives that Cruz was trading sex for housing and wanted to give the child up for adoption, according to the lawsuit. Cruz said in the court filing that she tried to explain to the interpreter she worked in a Chinese restaurant and lived in an apartment.
[…]
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The child was placed in the home of Wendy and Douglas Tynes, two attorneys who lived in Ocean Springs and were foster parents. The complaint said the Tynes were seeking to adopt. The suit alleges MDHS officials conspired with a youth court judge and the Tynes to keep Cruz from her daughter so she could be adopted by the couple. Messages left at the Tynes’ offices weren’t immediately returned.
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Shell Game

With a record number of people on food stamps, it just makes good fiscal sense that Congress keeps cutting that program to pay for other aid programs.

For some reason, this little snippet from a Lindsey Graham interview seems relevant:

We have been in Korea for, you know, since the end of the Korean War. We’ve been in Europe since World War II, nobody cares.