This clip and and blurb is provided by the Financial Times.
“Very serious’ food crisis possible, says FAO”
Jacques Diouf, director general of the UN’s Food and Agriculture Organisation, calls for a doubling of investment in agriculture among developing nations and a re-regulation of commodity futures trading to stop speculation that has helped drive prices higher. Failure to act, he tells the FT’s Richard Edgar, could result in further civil disturbances across the globe.
I haven’t found an official video yet, but this is the leading single off debut album “Cape Dory” by Tennis. I don’t know if this is the first time a sport has been used for a band name – I can’t think of one right now. Cape Dory is an old boat manufacturer from Massachusetts. This husband and wife duo apparently recorded the album after sailing around the north western US. We’re hearing much more of this “surfer” sound returning to indie music. I’m not going to lie. I like it.
Here is some positive news as it relates to Canadian credit. Growth has slowed to a 9 year low. Debt is still out pacing income, which is something that needs more attention, but it appears that government messaging has been working in recent months to curb the use of credit facilities. We will see if Obama’s team can send a similar message to the US.
Here are some highlights of the report issued by the CIBC this morning.
- After coming through the most leveragedperiod of consumer spending in recent history,Canadians are getting the message that theyneed to cut back on their debt levels.
- The Bank of Canada continues to warn Canadians about the risk of rapidly rising household debt, but the reality is that slowly, behind the scenes, credit growth is already softening. Inflation adjusted growth in household credit in the third quarter of 2010 was the slowest in more than 9 years, while the 0.27% increase in credit during October of last year (the latest available data point) was the softest monthly reading in more than 15 years.
- After rising since early 2008, consumer bankruptcies are in a clear downward trend, with the number of bankruptcies now falling on a year-over-year basis (3-month moving average) by close to 25%. On a cumulative basis, bankruptcies are now falling by close to 19%, with bankruptcies in Ontario showing the best improvement.
Two really contradicting articles surfaced in the last few days, of which I found some interesting subject matter. Amidst my pessimism about financial stability, I must admit as an admirer of great art I found this topic rather interesting. My own jury is still out to whether I believe its a realistic, safe, or intelligent way to invest money, it is however interesting nonetheless.
What I’m referring to are “Art Funds” where individuals can literally buy “shares” or “pieces” of an art work, in the hope that as the art appreciates in value and you will be able to sell your share for a profit. For the egoists, you would also be able to lay claim to having ownership of a Picasso, for example.
This first article lays out the landscape and provides some praise for the concept, written by Heidi Moore from the Dealbook of NY Times. The second, a scathing follow up from Reuters journalist Felix Salmon.
As I have maintained over the past few days, any full recovery is going to be driven through the consumer’s ability to save, and then spend. With growing household debt woes, and the potential for an increase in interest rates (they aren’t going down) the ability to keep up with paying down debts will weaken, an exert below from Sonya Gulati, an economist at TD Bank from an article featured in The Globe and Mail.
“Canadian household indebtedness levels and the prospect of higher borrowing rates confirm the notion that households cannot continue doing the heavy lifting going forward,”
About two years ago I read a book titled “The Forever War“. It was a NY Times best selling book written by journalist Dexter Wilkins and it provided a hands on account of the wars in both Iraq and the early stages of Afghanistan. It was gripping and eye-opening, I literally read the book in two days. Fast forward, and today I have just dug into the book “War” by Sebastian Junger. Also a best seller on the NY Times list. In the opening pages the author explains that he and his photographer Tim Hetherington captured hours of footage over the course of five separate visits to the Korengal Valley, commonly known as the deadliest place on earth where Taliban and US troops fight around the clock. The trailer above is the film they have created from this footage.
I am in the midst of doing my January New Year cleanse, diet, and following my new work-out regime. This came into my inbox today. For those Torontonian’s out there who are looking for some new places to try and you don’t get the daily BlogTO update, be sure to check this link right here to learn about the Top 10 Restaurants in Toronto from 2010. I personally really enjoyed Salt – I loved the atmosphere, and the food was pretty damn tasty too.
I was looking at The Globe and Mail online today (to my international readers, its the national paper in Canada) and I found it very interesting that two articles were prominent on the main page. The first was the major headline “Canada adds 22,000 jobs in December”, it went on to explain that Canadian unemplyoment had returned to pre-recession levels around 7.6%, where the second article’s was the major headline for the business section, its title was “It will take years for jobs to come back: Bernanke”. The concern was that the drop to 9.4% unemployment use due largely in part because people have given up looking for jobs.
Clearly our brothers to the south are feeling continuing ramifications of their collapse. I remain with the view that the US recovery is not close to being in place. Continued unemployment means default on mortgages and other forms of credit are going to continue to rise – and in turn likely continue to push the house price market downward, which then perpetuates this problem. Further, if credit debt is not being repaid, taxes certainly are not – and this is in line with the 60 minutes report on growing and increasing US State debt. I believe we are standing on bubbling debt, and its again the tip of the iceberg. Double dip? Today I think so.
This article is taken from The Globe and Mail this morning. With continued pressure on world food prices, we will see rising consumer costs in the US and abroad. I am convinced that true recovery will occur when consumer or household debt begins to come to stable levels. If pricing continues to increase, it only amplifies the pressure on the US consumer spending ability.
World food prices have hit their highest on record, and there are fears that the devastating floods in Australia could push them even higher.
The Food and Agricultural Organization, an arm of the United Nations based in Rome, said today its food price index climbed in December to its highest since it began collecting data in 1990. The measure, which tracks costs of items such as rice, wheat, corn, sugar meat, rose more than 4 per cent from a month earlier.
That will raise fears over the possibility of another crisis like that of 2007-2008, when countries such as Bangladesh and Haiti were the scene of riots, The Financial Times reports. The index has now topped those levels.
There are also fears that the flooding in Australia, a key producing region for sugar, for example, will boost prices even more.
“Recent flooding in Australia’s northeast has added to supply concerns in a number of farm commodities, which began to emerge last summer with weather problems in key producing areas (e.g., Russia, Canada),” said Kenrick Jordan of BMO Nesbitt Burns, adding that prices of wheat and corn have surged 17 per cent and 11 per cent, respectively, since the beginning of December.
“The price spike has raised fresh concerns about food price inflation,” he said.
He added, though, that while higher grain and oilseed prices will pressure overall food prices in the longer term, the historical relationship between foodstuffs and prices suggests no marked inflation in industrialized countries in the near term. “In developing countries, where food accounts for a much more significant part of household budgets, the inflation threat is much greater,” he said.
Bloomberg News reports today that cane growers in Australia suggest that sugar production capacity could see curbs for two to three years given the hit to crops that were planted, and the nature of regrowth.
“The production capacity for the industry will be greatly diminished as a result of the extremely wet conditions,” Ron Mullins, acting chief executive officer of Canegrowers,” told the news agency.
In my personal and humbled opinion, the greatest city in the world has been announced to play host to one of the most spectacular events in the sporting world. The 34th America’s Cup will be hosted in San Francisco in 2013. You can rest assured that I will be doing everything within my powers to attend this race and coveted event. The video below is of the press conference announcing the protocol of the race.