If they aren’t about to go under, they are making so much money that everyone else hates them.
Something is about to give.

Rice wars

The FT fronts news of an astonishing jump in the world’s most common food, raising “Fears of unrest across Asia as rice price surges 30% in a day” as the salmon sheet says in its headline.

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.

While Reuters agrees with the Journal’s take, The Associated Press reaches the opposite conclusion, reporting that “demand was high.”

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

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.