More rain and snow is falling in Canada, Britain and northern Europe, two-thirds of which is attributable to human activities. Britain is suffering one of its wettest summers ever, with severe flooding in England. More rain is also falling in areas immediately south of the equator including Brazil, southern Africa, Indonesia and Australia. Nearly all of this is caused by mankind. But countries immediately north of the equator, in Africa, India and parts of China, are getting less water. [More]

While sidewalks crackle in the summer heat, NASA scientists are keeping a close eye on the sun. It is almost spotless, a sign that the Sun may have reached solar minimum. Scientists are now watching for the first spot of the new solar cycle to appear. The 11 year long solar cycle is marked by two extremes, solar minimum and solar maximum. Solar minimum is the period of least solar activity in the solar cycle of the sun. During this time sunspot and solar flare activity diminishes, and often does not occur for days at a time. [More]

Though hurricane season begins on June 1, the stormiest months tend to be August and September, when conditions in the Atlantic basin are most ripe for a hurricane to develop. During these months, ocean temperatures are warmer and there is typically less wind in the upper atmosphere to shear the tops off of developing storms.

Some seasons have seen unusually late starts. The 1992 season, for example, didn’t start up until August. And boy did it start with a bang: Hurricane Andrew decimated South Florida. [More]

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The Merc's purchase of the CBOT marks a transition from pit to electronic trading, said Caitlin Zaloom, an assistant professor at New York University and author of ``Out of the Pits: Traders and Technology from Chicago to London'' (University of Chicago Press, 238 pages, $29).

Zaloom said moving the Merc's pits to the CBOT building preserves traditional face-to-face trading, which many traders still prefer. Eventually, though, she expects trading floors to become obsolete as electronic trading takes over. [More]

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Rising tortilla prices in Mexico are due to a supply issue in that country – not increased U.S. ethanol production or U.S. corn prices. The U.S. Grains Council (USGC) and the National Corn Growers Association (NCGA) report that lower corn production in Mexico and the lack of import licenses have caused white corn shortages there. [More]

American corn ethanol policy seems like a bad idea for sure. Let's open up our markets to superior Brazilian sugar-based ethanol. That would lower American and also Mexican corn prices.

And Mexico? My head knows what is right but my heart is torn. Can Mexico can afford the protectionism which keeps local producers going and gives it the world's best and most diverse corn, the world's best tortillas, and supports a major part of its national identity, most of all for its most oppressed and politically sensitive groups? I am emotionally torn and will not proceed with the question any further.

Labels: economics, marketing

Corn investors are gleeful about the first bear market in two years.

Goldman Sachs Group Inc. predicts a rebound that will turn $10 million into $18.15 million by the time Iowa farmers harvest their crop in October. Krom River Partners LLP and the Mother Earth Investment AG fund are so certain a recovery is imminent they're buying corn during the current rout. [More]

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First, it is not what they did that was important but it is what they said that made all the difference. Fed chief Ben Bernanke basically said that he is more willing to consider the fall off in the housing market and the blow up in the sub prime lending market as a more important consideration short term then inflation. Translation: he is likely preparing the market for the potential for rate cuts in the weeks ahead.

The reason this has significance is because it is telling you the Federal Reserve is ready to put the foot on the liquidity pedal and let Japan decelerate its liquidity pump. This lit a fire underneath the equity markets globally yesterday and has a profound impact on the likely acceleration of global growth as we head into the back half of 2007 and especially into 2008. It does not mean that the transition will happen with out some further disruptions but it does mean the Fed is aware of the danger of the yen-carry trade distortion and is looking to minimize, the best that it can, the effects of its eventual unwinding. Have no illusions of grandeur here: Japan will continue to raise rates in the year ahead and the yen-carry trade will unwind from its current amebic state. So expect the yen to strengthen significantly against the dollar and expect the US dollar to stay under pressure against most other currencies as well.

Labels: economics, economy, marketing

But for those who view things from Greenspan's perspective, there are worrisome indicators. Orders for durable goods — covering everything from jet engines to computers, as well as washing machines and other household appliances — fell more than forecast last month, the Commerce Department announced, a sign of ongoing weakness in manufacturing. The 7.8% decline was the biggest since October. Another important indicator of business spending, orders for nondefense capital goods not including aircraft, fell 6%, the third drop in four months.

Even though a new report from the National Association of Realtors showed that sales of previously owned homes rose 3% in January, the median price of those homes fell to $210,600, down 3% from the same period last year. Inventories of unsold homes also remain high. [More]

One concern is that the heavy wiring in the markets could not keep up with the rapid changes. Another is the rapid growth of derivatives. The problems in the subprime mortgage sector have focused attention on the slicing and dicing of risk using sophisticated instrument such as collateralised debt obligations and credit default swaps. Banks have used these to shed credit risk, but it is not clear where all that risk now lies. Financial shares were hit particularly hard on Tuesday, suggesting that nerves are starting to jangle over this uncertainty. Shares in Goldman Sachs, perhaps the smartest of the financial alchemists, ended down 6.6%. This was partly due to its Asian exposure (it owns a stake in a big Chinese bank). But its role in conjuring up and trading exotic financial instruments was probably also a factor. [More]

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