The next price bubble to watch is food speculation. Who Benefits From High Food Prices?

[ElsewheresDaughter]

http://www.motherjones.com/commentary/columns/2008/06/who-benefits-from-high-food-prices.html




Last week, new consumer price data released by the US Labor Department confirmed what most shoppers already suspected: Food prices, which took their biggest one-month leap in nearly two decades in April, rose even further in May. Energy costs, too, went up last month. The big question, though, is why?

Commodity analysts are quick to pinpoint reasons: Midwest flooding affecting food, livestock feed overdrive provoked by the Chinese, biofuel-related demand, and a weak dollar. These reasons all have some merit, but I'd argue it's speculation that's skyrocketed prices higher faster, not supply vs. demand.

At the financial leaders G8 summit that wrapped up over the weekend, food and oil speculation were front and center.And G8 leaders aren't the only ones expressing concern over traders profiting from the world's pain. Major hedge-fund stars like George Soros and Michael Masters are also screaming moral foul on commodity speculation—a clear signal there's more fire than smoke on the horizon.

As Masters told a Senate committee last month, "Institutional investors have purchased over 2 billion bushels of corn futures in the last five years. have stockpiled enough corn futures to potentially fuel the entire United States ethanol industry at full capacity for a year."

Indeed, the current agricultural price bubble has produced record highs in soybeans and wheat as well. Against this backdrop, a clueless Congress passed US farmer and food-stamp aid within the recent farm bill, without addressing the possibility that speculation could be to blame, or that curtailing speculation could help alleviate the domestic and global food crisis. They should have looked toWall Street's lead.


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[babylonsister]

1. The oil companies get the prices they demand, and we all suffer. nt

[TahitiNut]

3. It looks like Morgan Stanley might be profiting more than Exxon-Mobil on the CFT markets.

They're making the Hunt brothers' play on silver look like child's play. :shrug: Oh ... and Goldman Sachs.

It's not like nobody knew about it.
Over two years ago, we had http://www.iht.com/articles/2006/04/30/business/web.0430oil.php
Even Senator Levin addressed it http://levin.senate.gov/newsroom/release.cfm?id=255275

[babylonsister]

7. Morgan Stanley who rec'd $5B from China? Investment Corp in Dec 07

I admit, I know nothing about this, but wiki'ed MS and found this. I will read your links tomorrow, and try to inform myself. Thanks.

http://en.wikipedia.org/wiki/Morgan_Stanley


In 2004, Morgan Stanley co-managed the Google IPO which is the largest internet IPO in U.S. history. In the same year Morgan Stanley acquired the Canary Wharf Group. On December 19, 2006, after reporting 4th quarter earnings, Morgan Stanley announced the spin-off of its Discover Card unit. In order to cope up with the write-downs during the Subprime mortgage crisis, Morgan Stanley announced on December 19, 2007 that it would receive a US$5 billion capital infusion from the China Investment Corporation in exchange for securities that would be convertible to 9.9% of its shares in 2010.<12>

[Snarkoleptic]

2. Wall Street can't make money on some of their usual niches.

This is causing them to go heavily into oil and crop futures.
And then there's the hamfisted federal reserve response.

[KittyWampus]

6. so is it fair to say that as house market goes belly up, investors need safe places to put money

and as they go for solid things like oil and food, they end up creating another bubble?

[tridim]

4. The people that make Ramen noodles will benefit.

Hospitals and prisons too.

[SmileyRose]

9. better buy out the shelf on ramen and Mac & Cheese

funny how the least nutritious food is the cheapest.

[flvegan]

5. Imagine an economic based market, rather than commodity based speculation.

Supply/demand v investors looking to make a buck.

Pure fucking genius.

[PetrusMonsFormicarum]

8. Mickey D

The cheerful exchange of poor fat America's lint-riddled pocket change for the malign illusion of a full stomach and questionable nutrition. An out-of-shape populace is never going to make trouble for the regime.

[ElsewheresDaughter]

10. and the 1%ers thanks you Edward Bernays for the engineering of consent

"We must shift America from a needs- to a desires-culture. People must be trained to desire, to want new things, even before the old have been entirely consumed. <...> Man's desires must overshadow his needs."

watch the documentary film "The Century of the Self"