I wish I lived in a country where Wall Street did not set the interest rates. But sadly that does not seem to be the case. The best predictor for what the Fed will do seems to be what the markets want. This from Calculated Risk….

It’s now a tossup, based on market expectations, between a 50 bps rate cut and a 75 bps rate cut, on January 30th.

Just a couple of days ago, I heard a couple of analysts say that the Fed wouldn’t cut 75 bps because that would give the appearance that the Fed is panicking.

Wall Street is apparently saying “Bring on the panic”.

From Naked Capitalist……

Third, and most important, I am concerned that “mistakes as policy” is becoming established as acceptable practice in American companies, so I applaud the bankruptcy judges’ moves against it. I have been this become entrenched at my health insurer, Cigna. I have been with them for over two decades. It used to be that my claims would be processed, and the fights would be on charges they deemed to be excessive or procedures they didn’t like, such as chiropractic and acupuncture (before you get on your high horse about alternative medicine, Cigna promotes its coverage of acupuncture on its website, but then seeks not to pay for it, even for conditions where there is a considerable body of research saying it produces superior outcomes). I am persistent and have always prevailed (I believe people should live up to their contracts, what a novel concept, and am considerably aided by the fact that I live in the communist state of New York, which allows for external appeal to a state board which then turns to independent experts).

But I have seen a pattern with Cigna very similar to Countrywide’s, that of making persistent mistakes that are clearly errors in their favor, and hoping that the consumer doesn’t catch them. Before 2006, Cigna never mislaid a single claim I sent them. Suddenly, they failed to receive (meaning threw out) about 20%, which puts the onus on me to notice what hasn’t been reimbursed, confirm that it isn’t in their system, and resubmit the claim. Even with customers like me, they get the benefit of hanging on to their dough longer. Their new 2007 trick was trying to reinterpret how the applied claims to the deductible, which since I kept my records and there had been no change in my policy, was not successful. But I imagine that sort of move would have succeeded with at least half the plan members they tried it on.

The worst famines of the last 100 years were all caused by government policy. Think of Mao’s great leap forward or the horrible Ukrainian famines. So while it is tempting to dismiss Stuart Staniford’s “Fermenting the Food Supply” as being to alarmist, we should not forget that government’s have a track record of causing massive starvation in the name of the greater good.

The weakest part of Mr. Staniford’s argument is where he argues that Ethanol plants would still be profitable even without government subsidies. Especially given the fact that he does not seem to be taking into account the fact that government has been mandating that the refineries put an increasing amount of Ethanol into their gasoline blends.

But this weakness is overshadowed by the graphs he made showing how fast the Ethanol industry has grown and how much of our food supply is already being burned. Anyone who thinks that Ethanol is the wave of the future should look at those graphs and image what will happen if the growth in Ethanol production continues.

From BBC....

People across South Asia are struggling to cope with a severe shortage of affordable wheat and rice.

There have been queues outside Pakistani shops in towns around the country, and flour prices have shot up.

Wheat flour is a staple foodstuff in Pakistan, where rotis or unleavened bread are eaten with almost every meal.

Last week Afghanistan appealed for foreign help to combat a wheat shortage while Bangladesh recently warned it faced a crisis over rice supplies.

Global wheat prices are at record highs. Problems have been compounded by crop failures in the northern hemisphere and an increase in demand from developing countries.