U.S. terror report cites Venezuela, Iran
Venezuela also has oil…hmmm
Via CNN.com
Venezuela’s associations with terror states, Iran’s meddling in Iraq and the resurgence of al Qaeda in Afghanistan top the concerns in a new State Department report on terrorism threats in countries around the world.
Venezuelan President Hugo Chavez is not cooperating with U.S. anti-terror efforts and has “deepened Venezuelan relationships with state sponsors of terrorism Iran and Cuba,” the annual report says.
The report notes Chavez’s “ideological sympathy” for the Revolutionary Armed Forces of Colombia and the Colombian-based National Liberation Army, which “regularly crossed into Venezuelan territory to rest and regroup.”
Food crisis is a chance to reform global agriculture
Via FT.com
Of the two crises disturbing the world economy – financial disarray and soaring food prices – the latter is the more disturbing. In many developing countries, the poorest quartile of consumers spends close to three-quarters of its income on food. Inevitably, high prices threaten unrest at best and mass starvation at worst.The recent price spikes apply to almost all significant food and feedstuffs (see charts). Yet these jumps are themselves part of a wider range of commodity price rises. Powerful forces are linking prices of energy, industrial raw materials and foodstuffs. Those forces include rapid economic growth in the emerging world, strains on world energy supplies, the weakness of the US dollar and global inflationary pressures.
Yet the food element of this story carries its own significance. As HSBC points out in a recent analysis*, with rice and wheat prices spiking, riots on the streets of the Philippines, Egypt and Haiti and moves by India, Vietnam, Cambodia and China to restrict rice exports, food is suddenly an even hotter issue than normal.
So why have prices of food risen so strongly? Will these higher prices last? What action should be taken in response?
Rising defaults hit Countrywide
From FT.com
Results from Countrywide Financial and MasterCard on Tuesday underscored the declining state of the US economy as mortgage defaults soared and more consumers turned to credit cards for basic purchases.
Countrywide, the largest US mortgage lender, said it lost a larger-than-expected $893m in the first quarter as provisions for credit losses jumped ten-fold to $1.5bn and charge-offs on bad loans rose to $606m from $39m.
Countrywide, a leading issuer of home loans to high-risk borrowers, teetered on the edge of bankruptcy last year before agreeing to a $4bn takeover offer from Bank of America.
BofA expects to close the acquisition in the third quarter and has pledged to aid Countrywide borrowers in danger of losing their homes as their interest rates reset to higher levels.
MasterCard on Tuesday said first-quarter profits more than doubled to $447m, or $3.38 per share, as US consumers put more expenses such as food and petrol on their cards.
Confidence slumps as home prices post record fall
Also From Reuters
Consumer confidence fell to a five-year low this month as Americans confronted the grimmest jobs outlook since late 2004, while data also showed a record drop in home prices in February.Contributing to their slumping confidence in April, consumers expected that inflation would accelerate to a pace last seen in the early 1980s. The news cemented the prevailing view that the Federal Reserve, which is to open a two-day policy meeting later on Tuesday, would signal an end to its aggressive campaign of lowering interest rates.
The private Conference Board’s index of consumer sentiment fell to 62.3 in April, the lowest reading since March 2003, when the Iraq war was launched, from an upwardly revised 65.9 in March.
The monthly survey’s gauge of inflation expectations surged to 6.8 percent from 6.1 percent in March. It was the highest reading on inflation expectations since a matching 6.8 percent in September 2005.
“Consumers haven’t been this depressed in a long time,” said Chris Rupkey, senior financial economist with Bank of Tokyo-Mitsubishi in New York.
“They are saying that jobs are much harder to get since the start of the year and that does not bode well for this Friday’s employment data. This is exactly what you see when we are in a recession and the labor market indicates that we are indeed in a recession, and the million dollar question is whether this decline in confidence leads them to pull back their spending.”
U.N. and World Bank say to tackle food crisis
Ahhhh, this is concerning.
Via Reuters
U.N. agencies and the World Bank pledged on Tuesday to set up a task force to tackle an unprecedented rise in global food prices that is threatening to spread social unrest.The international bodies called on countries not to restrict exports of food to secure supplies at home, warning that could make the problem worse.
“We consider that the dramatic escalation in food prices worldwide has evolved into an unprecedented challenge of global proportions,” the United Nations said in a statement.
This had become a crisis for the world’s most vulnerable people, including the urban poor, it said after a meeting of 27 international agency heads in the Swiss capital, Berne, to chart a solution to food price rises that have caused hunger, riots and hoarding in poor countries.
Rising prices boost Shell and BP
Whoda thunk it?
From the BBC NEWS
Oil firms Royal Dutch Shell and BP have made better-than-expected first-quarter profits thanks to the rising price of oil, which is close to $120 a barrel.Shell made profits of $7.8bn (£3.9bn) in the first three months of the year, up from $6.9bn a year ago.
And rival BP saw its profits rise 48% to $6.588bn (£3.31bn), from $4.4bn.
In January, Anglo-Dutch firm Shell reported annual profits of $27.56bn (£13.9bn) for 2007, a record for a UK-listed company.
BP shares closed up 5.96% in London, while Royal Dutch Shell ‘A’ shares rose 5.26%.
Global food crisis sparks US survivalist resurgence
Via ABC News (Australian Broadcasting Corporation)
So far the threat of a global food crisis has not affected Australia, but there are worrying signs appearing in the United States where some worried locals are beginning to hoard supplies.Two bulk US retailers are rationing some sales of imported rice and that’s been enough for some Americans to begin stocking up.
It has also rekindled America’s survivalist movement.
One leading survivalist warning of lean and hungry times ahead is Jim Rawles, a former US intelligence officer and editor of a survivalist blog, who lives in California.
Mr Rawles says he thinks the food shortages being seen in the United States could soon become a matter of survival.
“I think that families should be prepared for times of crisis, whether it’s a man-made disaster or a natural disaster, and I think it’s wise and prudent to stock up on food,” he said.
Technorati Tags: survivalist , famine
Wall Street Grain Hoarding Brings Farmers, Consumers Near Ruin
Via Bloomberg.com
As farmers confront mounting costs and riots erupt from Haiti to Egypt over food, Garry Niemeyer is paying the price for Wall Street’s speculation in grain markets.Commodity-index funds control a record 4.51 billion bushels of corn, wheat and soybeans through Chicago Board of Trade futures, equal to half the amount held in U.S. silos on March 1. The holdings jumped 29 percent in the past year as investors bought grain contracts seeking better returns than stocks or bonds. The buying sent crop prices and volatility to records and boosted the cost for growers and processors to manage risk.
Niemeyer, who farms 2,200 acres in Auburn, Illinois, won’t use futures to protect the value of the crop he will harvest in October. With corn at $5.9075 a bushel, up from $3.88 last year, he says the contracts are too costly and risky. Investors want corn so much that last month they paid 55 cents a bushel more than grain handlers, the biggest premium since 1999.
FBI, politicos renew push for ISP data retention laws
Via CNET News.com
The FBI and multiple members of Congress said on Wednesday that Internet service providers must be legally required to keep records of their users’ activities for later review by police.Their suggestions for mandatory data retention revive a push for potentially sweeping federal laws–which civil libertarians oppose–that flagged last year after the resignation of Attorney General Alberto Gonzales, the idea’s most prominent proponent.
FBI Director Robert Mueller told a House of Representatives committee that Internet service providers should be required to keep records of users’ activities for two years.
“From the perspective of an investigator, having that backlog of records would be tremendously important if someone comes up on your screen now,” Mueller said. “If those records are only kept 15 days or 30 days, you may lose the information you may need to bring that person to justice.”
Also lending their support for data retention were Rep. Ric Keller, R-Fla., who said that Internet chat rooms were crammed with sexual predators, and Rep. Lamar Smith of Texas, the senior Republican on the House Judiciary committee and a previous data retention enthusiast. Rep. John Conyers, the senior Democrat and chairman, added that any proposed data retention legislation submitted by the FBI “would be most welcome.”
Buffett says recession may be worse than feared
From Reuters
Warren Buffett, the world’s richest person, said on Monday the U.S. economy is in a recession that will be more severe than most people expect.Buffett made his comments on CNBC television after his Berkshire Hathaway Inc (BRKa.N: Quote, Profile, Research) (BRKb.N: Quote, Profile, Research) agreed to invest $6.5 billion in the takeover of chewing gum maker Wm Wrigley Jr Co (WWY.N: Quote, Profile, Research) by Mars Inc in a $23 billion transaction.
“This is not a field of specialty for me, but my general feeling is that the recession will be longer and deeper than most people think,” Buffett said. “This will not be short and shallow.
“I think consumers are feeling gas and food prices,” he added, “and not feeling they’ve got a lot of money for other things.”
Vietnam counters rice-buying binge amid food fears
From Reuters
Vietnam took action to quell panic over rice supplies on Monday, banning speculation in the market after a “chaotic” buying binge highlighted growing global fears about food security.The move by the world’s second-biggest rice exporter came as protests continued in some states in Africa over soaring costs for food and fuel which aid experts say threaten to push 100 million people worldwide into hunger.
Queues and empty shelves were still evident on Monday in Vietnam, which joined other nations in feeling the impact of a nearly threefold rise in rice prices this year.
Bank bail-outs to be kept secret
From This is Money
The Bank of England has imposed a permanent news blackout on its £50bn-plus plan to ease the credit crunch.Ferocious and unprecedented secrecy means taxpayers will never know the names of the banks that have been supported through the special liquidity scheme, which was unveiled by Bank Governor Mervyn King last week. Requests under the Freedom of Information Act are to be denied. Details will be kept secret even after 30 years - the period after which all but the most sensitive state documents are released. Any Bank of England employee leaking the names of institutions involved will face court action for breach of contract.
Mennonite Farmer Arrested, Assets Seized, for Selling Milk
Via counterpunch.org
On April 25, 2008, in Cumberland County, Pennsylvania, Mark Nolt, a Wenger Mennonite (Horse and Buggy Mennonite) dairyman, threatened for months with arrest for selling raw milk without a permit was removed from his property by state troopers.Jonas Stoltzfus, a friend, fellow farmer, and Church of the Brethen, was asked by Mr. Nolt to speak for him, and said of the raid yesterday - “Six state troopers and a man with the Pennsylvania Department of Agriculture trespassed onto his property, and stole $20-25,000 of his product and equipment.”
Mr. Stoltzfus explained that Mr. Nolt did not have a permit because “he chose to turn his permit back in because it did not cover all the products he was selling. He felt he was being dishonest selling stuff that was not covered by the permit. He is a man of great integrity.”
Wheat Crop Failures Could be Total, Experts Warn
Via moneynews.com
On top of record-breaking rice prices and corn through the roof on ethanol demand, wheat is now rusting in the fields across Africa.
Officials fear near total crop losses, and the fungus, known as Ug99, is spreading.
Wheat prices have been soaring this week on top of already high prices, and futures contracts spiked, too, on panic buying.
Experts fear the cost of bread could soon follow the path of rice, the price of which has triggered riots in some countries and prompted countries to cut off exports.
Paulson sees no food shortage in US
In an exclusive interview with Reuters, Treasury Secretary Paulson said while food prices may be rising higher, there are no shortages of food.
On Thursday, Brazil - in the footsteps of India - said it was suspending rice exports in order to feed its own people and keep prices stable.
The country said it would also sell rice from its own stockpiles.
Load Up the Pantry, says the WSJ
Via WSJ.com
I don’t want to alarm anybody, but maybe it’s time for Americans to start stockpiling food.No, this is not a drill.
You’ve seen the TV footage of food riots in parts of the developing world. Yes, they’re a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.
Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.
“Load up the pantry,” says Manu Daftary, one of Wall Street’s top investors and the manager of the Quaker Strategic Growth mutual fund. “I think prices are going higher. People are too complacent. They think it isn’t going to happen here. But I don’t know how the food companies can absorb higher costs.” (Full disclosure: I am an investor in Quaker Strategic)
Indonesia Holds Massive Bird Flu Drill
From VOA News
Indonesia has launched a massive bird flu drill to prepare for the possibility of a human-to-human outbreak of the deadly virus.
Most bird flu cases involve contact with infected poultry, but experts fear the virus could eventually mutate and be spread from human contact.
No Cause Needed to Search Laptops at the Border
Via the Stanford Center for Internet and Society
On April 21st, the Ninth Circuit held in United States v. Arnold (pdf) that the Fourth Amendment does not require government agents to have reasonable suspicion before searching laptops or other digital devices at the border, including international airports. Customs and Border Patrol are likely touse the opinion by Judge O’Scannlain to argue that almost every property search at the border is constitutionally acceptable.
Rationing of rice hits Britain’s Chinese and curry restaurants
From the Times Online
Rice is being rationed in Britain as shopkeepers limit supplies to their customers to prevent hoarding. Restrictions on sales in Asian neighbourhoods are reported as emergency measures are taken by governments worldwide to combat the soaring cost of rice and prevent outbreaks of food rioting.Tilda, the biggest importer of basmati rice, said that its buyers had resorted to restricting their customers to two bags per person.
Rice prices hit record highs
Video, from Reuters.com
Rice risks becoming a luxury in the face of soaring prices - threatening pinched budgets in the West but starvation in developing countries.Riots have flared like a trail of gunpowder through West Africa as some of the world’s poorest people struggle to cope with soaring inflation that’s seen the prices of basic foods more than double in a year. The U.S. benchmark rice price — at the Chicago Board of Trade — has risen to over $24 per 100 pounds of rough rice, while the world benchmark for Thai rice has surged to more than a $1,000 per tonne of milled rice.
Americans hoard food as industry seeks regs
Via the The Washington Times
Farmers and food executives appealed fruitlessly to federal officials yesterday for regulatory steps to limit speculative buying that is helping to drive food prices higher. Meanwhile, some Americans are stocking up on staples such as rice, flour and oil in anticipation of high prices and shortages spreading from overseas.Their pleas did not find a sympathetic audience at the Commodity Futures Trading Commission (CFTC), where regulators said high prices are mostly the result of soaring world demand for grains combined with high fuel prices and drought-induced shortages in many countries.
The regulatory clash came amid evidence that a rash of headlines in recent weeks about food riots around the world has prompted some in the United States to stock up on staples.
Sam’s Club, Costco limit bulk rice purchases
I hope people already have their orders in for long term storage food supplies…the lines are getting longer every day, lead times extending as we type.
Via CNN.com
The two biggest U.S. warehouse retail chains are limiting how much rice customers can buy because of what Sam’s Club, a division of Wal-Mart Stores Inc., called on Wednesday “recent supply and demand trends.”
art.thai.rice.afp.gi.jpgA farmer harvests rice in Thailand earlier this month.
The broader chain of Wal-Mart stores has no plans to limit food purchases, however.
The move comes as U.S. rice futures hit a record high amid global food inflation, although one rice expert said the warehouse chains may be reacting less to any shortages than to stockpiling by restaurants and small stores.
Sam’s Club followed Seattle-based Costco Wholesale Corp., which put limits in at least some stores on bulk rice purchases.
Sam’s Club declined to say if this is first time it has restricted sales of bulk foods. The limits affect 20-pound bags, not retail-sized portions. Costco could not immediately be reached for comment on its limits or whether they are the first ever.
Sam’s Club said it will limit customers to four bags at a time of imported jasmine, basmati and long grain
Warning: Wal-mart, Costco limit rice purchases
Via the guardian.co.uk
In the latest sign that fears of a rice shortage are rippling around the world, Sam’s Club, the warehouse division of U.S. retailing giant Wal-Mart Stores Inc, said it was limiting sales of several types of rice.
Sam’s Club is capping sales of the 20-pound (9 kg), bulk bags of rice to four bags per customer per visit.
The news came a day after Costco Wholesale Corp, the largest U.S. warehouse club operator, said it had seen increased demand for items like rice and flour as customers, worried about global food shortages, stock up.
“Everywhere you see (look), there is some story about food shortages and hoarding and tightness of supplies,” said Neauman Coleman, an analyst and rice broker in Brinkley, Arkansas.
“Rice gets mentioned because rice is the No. 1 direct consumable agricultural grain in the world,” he said.
Russia shot down spy plane
Via CNN.com
“We call upon the United Nations to address this direct military aggression against Georgia and to fully exploit its own means and capabilities in order to keep the situation from further escalation,” Georgia’s U.N. Ambassador Irakli Alasania told reporters Monday.To bolster its case, the Georgian air force released a video that it says shows a twin-tailed Russian MiG-29 shooting down a Georgian unmanned aerial vehicle, or UAV, over the separatist region of Abkhazia on Sunday.
The video — shot by the drone, Georgia says — shows a jet fighter firing a missile that streaks through the sky, trailed by a column of white smoke. The missile gets closer and closer and then suddenly the screen goes blank.
Record gas prices squeeze drivers
Via money.cnn.com
Cabbies here complain their take-home pay is thinner than it used to be. Trucking companies across the country are making drivers slow down to conserve fuel. Filling station owners plead that really, really, the skyrocketing prices aren’t their fault.And the rest of us? With gas prices now averaging $3.51 a gallon nationwide, according to AAA and the Oil Price Information Service, more and more Americans who have to drive are weighing the need for each and every trip.
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