The Washington Post continues its front-page food-crisis series, reporting in depth on how the increased demand (and subsidies) for corn-based ethanol is pushing up food prices overall. The piece says there’s even talk of a $3 billion ethanol pipeline in the Midwest.
Breaking news: um, factory farms are bad
The Post also goes big on A2 with a report on a damning independent study that finds that factory farming is bad for rural communities and bad for animals—and, yeah, bad for humans in general. Nice to see folks are finally catching up with Fast Food Nation, released seven years ago.
Several observers said the report, by experts with varying backgrounds and allegiances, is remarkable for the number of tough recommendations that survived the grueling research and review process, which participants said was politically charged and under constant pressure from powerful agricultural interests.
The study recommends ending hard-core caging of animals, banning most antibiotic use in farm animals, and aggressively policing antitrust laws in agriculture.
The WSJ on A4 emphasizes that the study’s authors bemoaned the influence of the agriculture industry “at every turn.”
The housing bust continues to weigh on consumer confidence, which fell to the lowest level since March 2003, when the Iraq war started (that’s a blip—other than that the outlook was the worst since the early 1970s). Barron’s Econoday called it one of the “most alarming reports on consumer confidence in 40 years of data.”
The LAT takes a look at what this means for the economy and has a hard time just coming out and saying the obvious—it seriously hurts. It also appear not to have realized that a consumer-confidence news came out the morning before its story appeared, but it’s an otherwise good analysis.
It notes that consumers upped their spending in real dollars by more than half over the last quarter of a century. How? By “reducing their savings, taking on debt and relying first on rising stock prices and then on increased housing values to keep them financially whole.” Those veins are clearly tapped out.
“Nothing’s going to reverse a generation of behavior overnight,” said Feldman, the Credit Suisse economist. But “what the markets are signaling is we have to consume less and export more.” Doing so would make for a very different—and considerably less heady—America than that of the last quarter of a century.
Citigroup, hat in hand
Troubled Citigroup went begging for more money yesterday, this time $3 billion in common shares it says it plans to issue. The Financial Times says and the WSJ notes on C5 that the move comes just a week after it raised $6 billion issuing preferred shares and investors will likely have their stakes diluted by the issue.
The sharp-eyed analyst Meredith Whitney, who’s been correct often in the last few months, says it’s a drop in the bucket and that Citi needs to raise more money. Depending on whom you believe, her number is: $20 billion or so (the FT), $15 billion to $18 billion (the <i>NYT), or $10 billion to $15 billion (Bloomberg). What’s a few billion dollars between friends? The Journal doesn’t cover the newsworthy analyst report at all.
It does, however, have our Ya Think? Quote of the Day:
“The market is probably not going to like more dilutive shares being issued,” said Jeffery Harte, an analyst with Sandler O’Neill & Partners.
The mouse that roared
The Journal’s editorial-independence committee squealed yesterday, saying it was unhappy with being left out of the loop on Rupert Murdoch’s decision to kick top editor Marcus Brauchli to the curb. The WSJ puts it on B1 and covers it well, and the NYT reports on C4 that the committee says it “intends to exercise fully its role in the approval of a successor managing editor and to take the steps necessary to prevent a repeat of the process it has just been through.”