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EYE ON Commodities - Corn

CORN - Friday's USDA report showed an increase in U.S. inventories before the 2009 harvest and there is speculation that ideal crop weather will help the U.S. crop recover from the flood. About 833 million bushels of unsold corn will be on hand before next year's harvest, up from 673 million forecast a month ago, the U.S. Department of Agriculture said July 11.

The surplus for the year ending Aug. 31 will be 1.598 billion bushels, up 12 percent from last month's estimate as ethanol-plant construction delays and falling demand for animal feed lifts this year's corn supply, the government said.

SOY BEANS - A shift to hot, dry weather will reduce yields after record Midwest rains last month stunted root development, leaving U.S. crops vulnerable to heat stress.

The Beginning Of The End Of The Nonsense...

There is a great post that our friend and editor of "Footnoted.org", Michelle Leder, put up this morning titled "The SEC wants to put an end to false rumors"...

Michelle clipped the following from the SEC release:

The examinations we are undertaking with FINRA and NYSE Regulation are aimed at ensuring that investors continue to get reliable, accurate information about public companies in the marketplace, said SEC Chairman Christopher Cox. They will also provide an opportunity to double-check that broker-dealers and investment advisers have appropriate training for their employees and sturdy controls in place to prevent intentionally false information from harming investors.

This nonsense of unethical business practice is not going to end well for the perpetrators.

KM

Pakistan Getting Pounded...

Despite Hank Paulson's call for confidence in global markets, the Karachi Index in Pakistan got crushed again, closing down -4.4% on the day.

Since June 26, Pakistan has lost another -10.2% of it's value, and this begs the simple question as to why?

The reality is that geopolitical risk in this increasingly interconnected global economy does not go away because it is ignored.

Pakistan is dealing with their worst crisis of stagflation in modern history, and the confidence in their domestic political leadership is gone.

These pictures are scary. It is global this time, indeed.

KM

(picture: http://img.dailymail.co.uk/i/pix/2007/12_04/bhuttoflameES_468x355.jpg)

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Euro 1.59 Is Not Fun For Everyone...

Importantly, this morning's nasty slowdown in European Industrial Production growth was the May #, not that which is likely worse here in July.

The Euro Zone reported their largest month over month decline in Industrial Production growth since 1992, and at -0.6% year over year this marks the 1st negative growth report in 3 years.

European inflation continues to accelerate, despite the Euro strengthening, and this equates to more of the same. Global Stagflation is here.

KM

Does This Picture Make You Less Scared?

"Sen Banking Committee Chairman Dodd to call Paulson and Bernanke to Senate hearing Tuesday" -- AP (Dow Jones)

At every turn now, we have a circus of government led intervention...

Where are the capitalists?
KM

(picture: http://media.washingtonpost.com/wp-dyn/content/photo/2008/02/26/PH2008022601396.jpg)

"For What It's Worth" - An Interesting Note From One Of Our Readers...

I often have very intelligent editorials sent to me. I thought this one was worth sharing...
KM

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I was up in New Hampshire this past weekend. My friend's father came up in the investment world in the 60s and 1970s and amassed a fortune selling his asset management business to one of the biggest firms on Wall Street in the early 1980s, and then investing on his own thereafter. He is actually going to introduce me to the CEO of a very successful Healthcare IT company who owns an interest in.

We were talking about the markets and the 1970s and he made a couple of interesting points. In the 70s there was no doubt about the supremacy of the US military and the dollar as the reserve currency of the world. He said that while we are still the dominant power, there's never been a period like this where so many small countries are essential flipping the bird at us.

The US Dollar's weakness speaks for itself. While the parallels to the 70s are interesting, it may actually be worse this time. Also, I listened to Bloomberg radio last night with a technical analyst Louise Yamada and her thought was that conditions today are more similar to the period from 1 than the 1970s.

For what it's worth...

-The Professor

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