Food Prices Jump to Six-Month High as Dairy Costs Rise - Bloomberg
World food prices rose in September to the highest in six months as dairy and meat producers passed on higher feed costs to consumers, the United Nations’ Food & Agriculture Organization said.
An index of 55 food items tracked by the FAO rose to 215.8 points from a restated 212.8 points in August, the Rome-based agency reported on its website today. Dairy costs jumped the most in more than two years.
Livestock breeders and dairy farmers are passing on the higher cost of feed, after grain prices jumped in June and July, according to Abdolreza Abbassian, an economist at the FAO in the Italian capital. Higher prices don’t mean a food crisis is imminent, he said today by phone.
“Despite a very difficult market, the fundamentals that suggest a food crisis are just not there,” Abbassian said. “Market sentiment is now accepting high prices more as a rule than as an exception.” — Bloomberg
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Sure it’s not a food crisis, for those who can afford higher prices.
Italy’s Prime Minister Mario Monti said the permanent rescue fund will gain access to European Central Bank liquidity via a bank license, challenging German policy makers to back more actions to tame the euro-area crisis.
“I think this would help, I think this will in due course occur,” Monti said in Helsinki yesterday at a news conference with Finnish Prime Minister Jyrki Katainen. Monti’s assertion was a rebuff to Chancellor Angela Merkel’s Cabinet hours after ministers meeting in Berlin hardened their opposition to granting the planned bailout fund access to the ECB’s resources.
(via Monti Bets on Banking License for Rescue Fund in Poke at Germany - Bloomberg)
(via Medicine is Killing the Patient; Increasing the Dose is Madness)
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I absolutely agree. Given that Europe suffers from a Currency Crisis; which basically means that different economies with different structures are being forced to remain in a system that works only for similar structured economies, continuing on the path politicians insist on (saving the Euro) will create a very unstable situation politically, socially, and economically. Either they must seek political and fiscal union, which I am not hopeful for, or they let the Euro dissolve.
Slovenian Government Collapses After Confidence Vote Loss; EFSF Ratification To Be Delayed Until 2012 | ZeroHedge
The longer European authorities wait, the more sentiment will shift towards nationalism.
I’ve long-warned about a political event acting as the match that lights the dynamite. Seems like we need a bunch of events to occur before the dynamite is lit.
Greek Bank Deposits Decline For 7th Month In A Row: Tax Collectors Celebrate By Striking
News like this tells me that the fundamental issues with the crisis still haven’t been dealt with.
Moment of Truth May Be Here for Europe
US markets ended in negative territory today. Most of the action was attributable to a disappointing result from the latest “Merkozy” meeting. No Eurobond program was announced; not even an expansion of the EFSF. Instead, they called for Eurozone nations to enact balanced-budget constitutional amendments as well as the formation of a “new economic government”, to be completed by summer 2012. On the prospect of Eurobonds Sarkozy stated: “One day we could imagine them, but at the end of a process of European integration, not at the beginning”. The prospect of Eurobonds, seen by many, as the only solution to stop contagion seems to be far off. Eurozone officials are woefully behind the curve in my view.
The recent slowing in core-countries such as France and Germany (not to mention contraction in most peripheral countries), makes the current situation even more dangerous. If Eurozone economies (especially France and Germany) were expanding smartly, perhaps investors would have more patience and accept piece-meal steps like the ones discussed today. Unfortunately they are not; French GDP growth stalled while German GDP only grew at a 0.1% in the second quarter. Confidence is dangerously fragile. What happens if the market doesn’t have the patience to move at “political speed” anymore? Today Art Cashin, Head UBS Trader, said that Europe’s wolfs may circle the markets tomorrow morning. If European markets have an ugly day tomorrow, it would signal that investors have had enough of the can-kicking and want results now. I don’t think the EU would be able to provide them in time due to a myriad of legal hoops and bureaucratic steps ALL European governments would have to go through. The political will of the people is increasingly not in favor of continuing the madness either.
The global economy is walking on thin ice and I can hear cracks.
G-Pap Survives the Vote, But Euro Reaction Puzzling
You’d figure the EUR/USD would have blasted off after this huge uncertainty was lifted. It wasn’t to be. Apparently the market already had the result priced in. It was confident that the vote would pass. Why woudn’t it pass? Financiers, not politicians, are the real peeps in charge, to the detriment of democracy it seems.
Could Today's Vote Plunge Greece into Chaos?
You have rolling blackouts now on top of non-stop protests (click on link above). How can the Greek populace make their displeasure more obvious? Subjecting ordinary citizens to recession to further support the bad decisions of wealthy investors is just plain wrong. I’m surprised it’s gone this far!
So what happens if the Vote of Confidence succeeds? While it’s only a first step, it would clear a big hurdle towards getting additional bailout money. It would also signal that further austerity would be implemented, directly against the wishes of the protestors.
Given that we’ve had violent protests in the past, could a ‘Yes’ vote trigger mass violent protests in the days ahead as the political establishment effectively ignores the wishes of its people to bailout banksters?
Merkel Felt the Heat (Click here)
I posted this a few days ago. It seems that Merkel’s political life is in danger and she’s in a terrible bind.
If Germany doesn’t approve the long-term EU bailout mechanism expected by the financial markets, you’ll be hearing more Eurozone sovereign-debt problems in the near-term (a few months).
Markets are tanking as the Egypt issue is gaining momentum. Reminds me of Greece. While Egypt isn’t that big a player on the global stage, the Suez Canal, which is an important waterway for oil shipments may be shut down. This explains why oil is up 4+% today.
Come on Fed, keep printing. Give investors more liquidity to bid up asset prices. These are the results.
Even though I believe that Treasuries are a good buy at this point, it’s always good to hear the other side of the trade….and boy the story sure is getting stronger by the week it seems.
Germany is once again standing its ground.
As long as there’s doubt on whether they will backstop a larger rescue package, look for the Euro to weaken further.
