The inflation that’s stalking the world’s commodity prices caused Egypt to ban rice exports and the Philippines to say it would have to buy a huge amount on the world markets, which are already at their lowest supply point in more than thirty years, because it is far short of its needs. India, Vietnam, and Cambodia are also getting all protectionist on their rice trade.
The paper notes that the food is a staple for 2.5 billion people in Asia, but also in other parts of the globe:
Rice is also a staple in Africa, particularly for small countries such as Cameroon, Burkina Faso and Senegal that have already suffered social unrest because of high food prices.
The cost of rice has more than doubled since January. That’s when prices started ticking up for rice even though those for corn, wheat, and other foods had been rising since 2006, though the FT doesn’t tell us why that is.
Americans on the couch
NYT’s columnist Floyd Norris delves into the other crisis—in consumer confidence— (a story we think hasn’t been getting nearly enough ink) and finds that by some measures consumers are more pessimistic than they’ve been in the four decades records have been kept. He blames that on the belief that “America is no longer a leader, or perhaps even competent, in one area in which we believed it excelled”—finance.
In December 1973 the Conference Board’s consumer expectations index hit the lowest level ever, 45.2. The reading disclosed this week, 47.9, ranks second.
In some ways, there is even less optimism now than there was then. A lower proportion of those surveyed expect business conditions to improve within six months, and the percentage of people who think their own income will rise is much lower now than it was then. Only in jobs is there more optimism now, and the difference is small.
Great rates for ‘crap’
The WSJ reports on A2 that Wall Street isn’t scrambling for the Fed’s new (and unprecedented) direct-loan program as desperately as many thought it would. The paper says that could be an indication that cash problems on the Street aren’t as severe as markets feared just a week ago.
The WSJ also says a separate lending program saw only “modest increase in demand”, though it looks to us like the amount borrowed jumped by nearly 30 percent in a week, to $37 billion.
The programs essentially allow Wall Street to put up their sketchiest assets as collateral to borrow short-term from the Fed. Short-term loans grease the wheels of capitalism and markets have seized up in recent months as lenders have feared for the solvency of those to whom they lend.
The WSJ has another story on C2 that says the results of the auction are a positive sign for the health of the financial industry.
Bond traders and strategists said the auction result may inject some optimism back into the markets, lessening worries of a deeper credit crunch that could push investors to further reprice risk.
“It means banks are financing all the crap at a great rate,” said Michael Franzese, head of government bond trading in New York at Standard Chartered. “This should open up some cash and ease some of the credit crunch.”
Trashing the house
Michael M. Phillips, the WSJ’s Renaissance man, reports on A1 that banks and mortgage companies are paying homeowners not to trash their about-to-be-foreclosed-upon homes. The “trash-out” phenomenon has been growing in the last several months along with the delinquency rate.
These days, bankers and mortgage companies often find that by the time they get the keys back, embittered homeowners have stripped out appliances, punched holes in walls, dumped paint on carpets and, as a parting gift, locked their pets inside to wreak further havoc. Real-estate agents estimate that about half of foreclosed properties to be sold by mortgage companies nationwide have “substantial” damage, according to a new survey by Campbell Communications, a marketing and research firm based in Washington, D.C.
The most practical way to ensure the houses are returned in decent shape, lenders and their agents say, is to pay homeowners hundreds or even thousands of dollars to put their anger in escrow and leave quietly.
Lots of anger out there, which leads us to our Violently Pissed-Off Homeowner Quote of the Day, as seen by a mild-mannered Realtor:
“When you’re losing your dream, and you’re paying all this money to it…and you’re hoping that it’s going to go up, and you’re going to make 100 grand like everybody else did, and it doesn’t happen—you know, people get upset,” says Joe Kraemer, a broker with Century 21 Advantage Gold who deals in foreclosed homes.