patrick.net

But how do we survive trading leveraged positions in commodities?

soaring fertilizer price

Potash?

I think CBOT has a rough rice contract. Is that what you want? It does not look super-liquid though.

I don't do futures, because I am not good at timing. If I identify a trend, I just want to buy and hold.

Soaring fertilizer price may not help the fertilizer company. Like I said before, the farmers just cut back and grow less food.

Soaring fertilizer price may not help the fertilizer company. Like I said before, the farmers just cut back and grow less food.

Have you seen the price of Potash (POT)? It is going up like a homesick angel.

It is possible to buy and hold futures. In fact, this is what many DB funds are doing? Leverage kills, but it is possible to have unleveraged position with enough T-bills in your account.

Not investment advice. Futures trading involves *great risks*.

Rogers is right on this one, this food trend won't benefit the fertilizers, won't benefit the farmers. It benefits only one thing - the price of the end product. And as more speculators get into the market, food hoarding will become very prevalent which will further escalate the situation.

I definitely don't want to be living in these countries during such a turmoil. I guess that's why Rogers chose to live in Singapore but not Shanghai. You can't take advantage of such a situation by putting your life on the line.

POT is already very frothy. There's a lot of expectation built in, they are not in hi-tech and with that kind of P/E, one mediocre quarter can send them right back to earth.

I prefer to bet on the end price, because farmers can choose not to use any fertilizers, but we cannot choose to not to eat.

As I have said, Nature is ways to deal with overpopulation. People are liabilities.

POT is already very frothy.

Agreed. I have no position in that stock.

I prefer to bet on the end price, because farmers can choose not to use any fertilizers, but we cannot choose to not to eat.

Fertilizers are the food of our food though...

There seems to be a bubble in the number of ETFs though...

There are huge pile of cow "stuff" all over the Boise valley. How in the heck can fertilizer be priced so high right now?

Peter

Have you ever spent any time in the 3rd world?

Have you ever given any money to someone begging in the street?

Simply curious.

I have donated to some breast cancer foundation and some tsunami relieve efforts.

I might have given money to beggars when I was small. Now I make a conscious effort not to pay them. I am not against charities who reach out for the homeless though.

Dennis-

Official stated oil reserves are a less reliable number than US inflation numbers. Folks have been talking about major unproven fields for many many years, every other month you can find a new one. Be very very skeptical.

For my money, that report is utter nonsense.

On another topic, any thoughts relative to the illegal US income tax movement ala Wesley Snipes and that crazy tax protesting couple up in the backwoods of New England?

I think charities should focus on education and medicine.

Feeding the hungry will only prolong pain and suffering.

Off topic apologies, here is a new one.

Fairfax county Virginia, a Washington dc suburb and one of the wealthiest in the country, is intending on massively purchasing foreclosures directly. (now our local governments are going to be catching falling knives).

About 25% of firefighters, police, teachers etal currently employed by the county actually reside there. The operating assumption being the common story of lower paid professions being "forced" to outlying sprawl. Obviously a great trend for the builders, developers, and Mobil Exxon. Not so great for the supposedly underprivileged public servants.

So Fairfax county endeavors to "kill two birds" through mass purchase of 'discounted' foreclosures, subsequently offering this stock to this select group on subsidized basis.

US has a much better chance counting on agricultural export to tie us over than counting on finding another big pile of oil reserve. The chance of the latter is next to 0.

US is the largest food exporter of the world with the most arable land per capita. Food shortage in the world is definitely a good news for us because that means for once our farm subsidy will pay off handsomely.

I am a strong supporter of farm subsidy no matter how much it costs. Food security is just as important as maintaining a military superiority, without both we are just another Argentina.

oo

I find that rice post of yours immensely disconcerting.

Food shortages equal political instability, mass migration, and more war.

Many argue we have already entered the century of resource wars, of which our Iraqi adventure marks the opening salvo.

Poor Africa.

I'm not sure if you simply manage your own funds or also those of others, but I'm continually impressed with the depth of your knowledge in such things. Apologies if its inappropriate to ask and feel free not to answer, but what do your avg annual returns look like? I'm prepared to be a very jealous bitter investor on your report.

Where does Fairfax county come up with such a massive amount of money to buy up foreclosure properties?

Peter

Would you argue that modern medicine is in fact often counterproductive, that disease should be allowed to spread maintaining population control?

In your view, has our medical and biological science corrupted the natural order of things? Would we be better off with black plagues and rampant aids, malarial population culling of the weak, old, and unlucky sobs?

NVR,

I just manage my own funds, I grew up and worked in different parts of the world, which gave me a perspective a bit different from home-grown Americans.

Thanks for your compliment but I am really a peon individual investor. My return is consistently in the double digits because I am very conservative. During the down years I am able to stay above water but during the good years I make less than sector average. I invest my hard-earned money, and I don't have any expensive hobbies, so I don't need lots of investment return to feel happy.

Whether you like it or not, we are entering a phase of instability around the world. But as the history of human beings has proven, resets and turmoils still happen, yet with an increasingly milder impact on our lives. In the 16th century, such an economic reset meant massive-scale famine and war and cannibalism, while in the last century, such reset meant a world war that wiped out a much smaller portion of the human population than before. I think the reset this time will definitely be even milder. Of course there will be hardship, but in the grand scheme of things, we are already doing so much better than our ancestors.

BTW, I think it is a worthwhile bet to start accumulating Yen now.

Japan's rice (main staple) is heavily reliant on imports. Oil and rice combined will make it extremely difficult for the Japanese to keep cutting interest rate to peg their Yen to us.

Once the Yen breaks the peg, it can easily blow through the 80s as all the carry-trade funds come home to roost.

Where does Fairfax county come up with such a massive amount of money to buy up foreclosure properties?

I'm certain the first thought of county Finance Director was to create some securities with the housing as collateral, I suspect the banksters cabaling in his circle quickly straightened him out. :-)

The chair of county sups is primary proponent, he usually gets his way. Council is debating proposal even as I write this. Lots of quotes from local FB's, complaining about the upkeep of the empty properties affecting their "values".

Real estate personal property tax increase? That would be perfect.

In his annual State of the County address, the Democratic chairman and 11th District congressional candidate will announce he wants to explore the use of some of the $23 million affordable housing fund to reverse the damage foreclosures have dealt to neighborhoods, and at the same time allow more families to afford to live in the county.
But since Fairfax was struck by a rash of foreclosures amid a nationwide crash in the subprime mortgage market, the chairman is banking on the county being able to scoop up the empty houses at a far lower cost.

Fairfax County saw 4,527 foreclosures in 2007 compared with 347 a year before, and is on track to see more this year, according to forecasts.

“Clearly, taking a home out of foreclosure would help restore stability to a neighborhood and restore confidence in the local real estate market.

It also would allow the county to open these homes to working families for purchase at an affordable rate,” Connolly is slated to say in his speech.

“Work force housing is in great demand but short in supply.”

The Fairfax County USD amounts are not meaningful at this point, but it merits a REDFLAG. This is another taxpayer loss conduit, potentially coming to a theatre near you.

OO,

Thanks as always for the excellent insight. What DennisN said one day has remained etched in my thoughts. "We are the Saudi Arabia of food".

I am looking at RJN, MOO thanks to you and DinOR. But it's much harder to make money on this theme.

Japan’s rice (main staple) is heavily reliant on imports. Oil and rice combined will make it extremely difficult for the Japanese to keep cutting interest rate to peg their Yen to us.

Good point.

Now we just need to find a good instrument for investing in rice.

Would you argue that modern medicine is in fact often counterproductive, that disease should be allowed to spread maintaining population control?

Not if medicine is market-driven. Companies should be free to provide medical solutions for profits. Naturally, this will happen.

I am not against universal health care if a society can afford such a luxury.

I am a strong supporter of farm subsidy no matter how much it costs. Food security is just as important as maintaining a military superiority, without both we are just another Argentina.

I am beginning to agree with you. However, the needs to be incentives for farmers to improve efficiency and lower costs.

Oh my, here it is.....the mother of all bailouts. Prepare to be annoyed.

The Bush Whitehouse mortgage bailout plan, fresh off the presses, courtesy of the Washington Post

http://tinyurl.com/ypo6rc

Soylent Green is people.

But wouldn't the farmers be better served by paving over their black farming soil and filling the land with McStucco brand shitboxes? I mean what's growing food when you can grow wealth? With money can't you just buy the food?

ahahahahhahahahahahahahahahahahahahahhahahaha

amazing how quickly the fecal matter has hit the cooling device.

The Bush Whitehouse mortgage bailout plan, fresh off the presses, courtesy of the Washington Post

Oh fuck me, where the fuck do I sign up?

amazing how quickly the fecal matter has hit the cooling device.

Call it a fertilizer application system. :)

Wheat Killer Detected In Iran: Dangerous Fungus On The Move From East Africa To The Middle East
http://www.sciencedaily.com/releases/2008/03/080317091046.htm

So the Federal Reserve seems to be nominating itself to enjoy broad new powers become an uberoverseer of the US economy. Quasi public entity the Fed is.....really just opaque instrument of power for those in control of the banking institutions.

Not so long ago, Goldman Sachs created a private stock exchange for unregistered securities, open to clients with $100 Million Minimum. Unregulated.

Oh, and NASDAQ opens unregulated private stock exchange for those with a minimum of $100 Million in Assets.

I'm feeling very much like a card carrying member of the sheeple of late.

Some changes could actually reduce the power of the Securities and Exchange Commission, which is charged with maintaining orderly stock and bond markets and protecting investors.

That would be a significant expansion of the central bank’s regulatory mission, which has been limited primarily to supervising commercial banks. When Fed officials agreed earlier this month to rescue Bear Stearns, once the nation’s fifth-largest investment bank, they pointedly noted that the Fed never had the authority to monitor its financial condition or order it to beef up its protections.

This is worth a real hard look. Las Vegas construction half built and quite likely to stay that way. Reminds one a bit of Bangkok.

To date, I can think of no image of this current crisis that really drives home the new reality of our situation with more impact than this one. This very well could become iconic.

Las Vegas crash in all its glory

We've got one site like that in Boise. But it's only one site. There's a block downtown where a skyscraper was intended to be built. Only a foundation exists today.

wow that vegas site is impressive.

i hope it stays half done like that 4eva so my yearly trip to vegas can include a ghost town tour right on the strip.

Growing up in the 80's I always expected to live in a post apocalypse one day.
It was supposed to be nuclear bombs, but it turns out BANKS are more dangerous than bombs.

Los Angeles is also crashing swimmingly. Heres a home sold for 1.25m in Feb 07, now listed for 750k a year later. Thats a 500k/40% haircut. Lots of hair left though... these deals are everywhere now pissing off the dream price listings.

http://tinyurl.com/2c6duw

Quick update from across the pond.....

Germany is now in a defacto state of financial martial law, its institutions in full blown preparation mode for the complete collapse of the global financial system.

Spain.....

Spain’s once-booming property market is in freefall, official statistics have revealed for the first time.

“Many people thought that buying property, especially a second or third home, was an investment to make a profit. Now we’ll see cascades of these homes up for sale.” Mr Blesa was speaking in Vienna, where his savings bank yesterday inaugurated a new headquarters to handle credit lines for big construction companies operating in central and eastern Europe.

And if anyone cares or is watching, Iraq looks to be on the edge of complete chaos and breakdown of social order. US prop'ed central gov't might easily fail and not recover. What a mess.

So we need McCain. :)

Spain is not the only place. England is seeing cracks. Portugal.

From what I can tell the financial problems associated wih a credit crunch are very wide spread. It would b ironic is fiath in the US were restored by shear virtue of the fact that the size of our problem relative toour GDP is so much smaller. Can you imagine attrackting capital based on the premise that our corrupt, opaque, horrible financial sysem is better than everyone else corrupt, opaque, horrible financial systems?
Time will tell how the securitization bond market goes. . .