Akkam’s Razor

This really should come as no surprise, as McCain has an established track record of pulling the ejection handle or rapid reverses.  By now you’ve certainly heard that John McCain has ’suspended’ his campaign.

(Yeah, yeah - I know its an F-16, an Air Force jet, and the Thunderbirds.  But it works…)

This morning, the WSJ reports the following occurred:

Make no mistake, it is coming. They are clearly in panic mode [nakedcapitalism via Economist's View]:

“We have lost control,” said Hale, quoting [Federal Reserve Chairman] Bernanke. “We cannot stabilize the dollar. We cannot control commodity prices.”

(Please note that they really could never control it anyway, regardless).

The NYT says:

The head of the Treasury and the Federal Reserve began discussions on Thursday with Congressional leaders on what could become the biggest bailout in United States history. While details remain to be worked out, the plan is likely to authorize the government to buy distressed mortgages at deep discounts from banks and other institutions. The proposal could result in the most direct commitment of taxpayer funds so far in the financial crisis that Fed and Treasury officials say is the worst they have ever seen.

• Twelve Ways to Sell Social Media to Your Boss - You probably already get social media, and see its value, and think it’s really nifty cool. But if you can’t articulate the benefits and the return on the effort, and several other little details to the folks upstairs, it’s going to be hard to get your ideas moved from “wouldn’t this be great?” to “let’s assign a project manager and get started.” First and foremost, you have to jump over the fence from where you’re thinking, and get into their mindset.

You can’t tell me that St. BBQ, the maverick of campaign finance reform, doesn’t know explicitly how to game the rules that he helped author.

You can’t tell me that Bernake’s academic focus of research on the Great Depression wasn’t a factor in his selection as leader of the Fed.

You can’t tell me that the decision to stop reporting M3 is not at all reflective of the need to inflate us out of our current financial dilemma.

You can’t tell me that no one could have foretold the current economic crisis while the debate regarding bankruptcy reform was going on in Congress in 2005.

• The Raw Story | White House admits pre-war e-mails not archived
  “The harm is that we’ve lost a huge piece of history,” says Anne Weisman, a lawyer for CREW. Weisman estimated the total number of missing White House e-mails at “10 million-plus.”
  (tags: emails georgebush whitehouse iraq war preparation backup archive)
• The 75 Skills Every Man Should Master
  (tags: skills men social howto business diy Esquire)
• The Gospel of Consumption | Orion magazine
  Instead, we have allowed the owners of those machines to define their purpose: not reduction of labor, but “higher productivity”—and with it the imperative to consume virtually everything that the machinery can possibly produce.
  (tags: consumerism economics history politics consumption society culture)

I’ve been hearing a lot about hoarding, rationing, or shortages of some food products - mostly rice, but also flour and cooking oil.  Even the Wall Street Journal is talking like its Y2K!

Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you’ll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to Bankrate.com. And those yields are before tax.

Meanwhile the most recent government data shows food inflation for the average American household is now running at 4.5% a year.

And some prices are rising even more quickly. The latest data show cereal prices rising by more than 8% a year. Both flour and rice are up more than 13%. Milk, cheese, bananas and even peanut butter: They’re all up by more than 10%. Eggs have rocketed up 30% in a year. Ground beef prices are up 4.8% and chicken by 5.4%.

These are trends that have been in place for some time.

And if you are hoping they will pass, here’s the bad news: They may actually accelerate.

The reason? The prices of many underlying raw materials have risen much more quickly still. Wheat prices, for example, have roughly tripled in the past three years.

Sooner or later, the food companies are going to have to pass those costs on.

What if something else is afoot?  What if it’s manipulation and/or speculation? Consider the following:

• Both production and supply are constant (one could argue China, our main source of rice, might keep crop for domestic consumption or switch to a more lucrative cash crop, but there’s no evidence for that).
• There could be anxiety at the wholesale level (as there has been with flour amongst bakers and pizza shops), causing a ‘rice-run’ at retailers.
• Consumers could be tuned-in to news on the subject and stockpiling (how likely could that be?)
• Or, it could be good, old fashioned pump-and-dump manipulation.

I recall that the most common way prices can be driven up (or maintained) is through scarcity - increasing demand or cutting supply.  Since production and demand seem rather constant, what other explanations are there?  Barry Ritholtz at Big Picture casts a suspicious eye towards the Federal Reserve.  Tim F. at Ballon Juice opines as well.  Angry Bear argues too-low interest rates versus demand outstripping supply.

Popularity: 10% [?]

• Emptywheel » The Rhetoric of More of the Same
  [W]e want to retain an exception to such regulation for the wilder and more complex financial products. So rather than admit that such a system is no longer sustainable, we will institutionalize a general ‘re-set’ button for the entire financial system.”
  (tags: us treasury finance regulations)
• Job Search Made Simple | SimplyHired
  Use our nifty tools to find local jobs, identify trends, research salaries, and secure that offer letter.
  (tags: jobs jobsearch career employment job search web2.0)

• The Job Loss Caused by John McCain
  Hey, a $35BB [military airplane tanker] contract went overseas [and not to Boeing], evidently via the influence of John McCain, and I want some straight talk from the man. Is anyone in the media awake?
  (tags: boeing EADS Airbus johnmccain 2008 election president)
• Cultural sustainability - Marketing & Strategy Innovation Blog
  To me, the idea of “cultural sustainability” is about companies whose actions offset the consequences of their presence (or disappearance).
  (tags: ecomics culture cultutalsustainability business)