The Rude Awakening
Laguna Beach, California
Monday, April 8, 2007 ------------------------------ - Boots-on-the-ground insight from the corn fields,
- Prudence? Not for all the AAA-rated banks in the world!
- Knowing when to expect the unexpected,
------------------------------ Unsurprised but eternally hopeful, Joel Bowman reports from California… In a recent weekend edition of the Rude Awakening, we asked the perennially vexing question that every man seeks the answer to at some stage of his life, "How long is a piece of string?" Fortunately, we enjoy the benefit of casting such perplexing conundrums into the vast and erudite Rude Awakening readership pool in hope of an answer. It came within a few hours of publishing: "Twice the distance from the middle to one of the ends," replied one of our Rude correspondents. That night, relieved of our mental disquiet, we slept like a baby. Of course, not all of our daily considerations involve such labyrinthine befuddlements. Sometimes we consider the simple, the mundane, and the obvious. Often it is these seemingly straightforward puzzles that turn out to be the most Gordian in nature. Glancing over the pages of the virtual daily rag here in California, we are confronted with headlines that would not seem, at least at a cursory glance, to incite any great degree of confusion. Quite the opposite, in fact. They are relatively similar to yesterdays, and to the day before and, most likely, tomorrow's headlines will be unremarkably akin once again. Let's start with the most obvious few: "Subprime Loan Worries Hit Funds," chronicles APP.com . "U.S. equity mutual funds rose 2.7 percent in the first quarter, less than half the pace of the previous three months, as the worst housing slump in more than a decade eroded stock-market increases."
Alright, everything seems to be in order here… "U.S. Watchdog Sees Future Crisis," observes BillingsGazette.com , before going on to reveal, "The United States has a "fiscal cancer" and must undergo dramatic and fundamental government reforms over the next 20 years to survive, the nation's top accountant says." So far, so good… The Toronto Star rounds off our routine news scour by informing us, "China holds $46.9 billion (U.S.) more U.S. Treasury debt than previously thought, according to a U.S. Treasury report released Friday that revised the basis for estimating foreign holdings of U.S. securities." So, China continues to buy more of the debt the United States is unable to really afford and watchdogs continue to issue unheeded cautions. Relatively similar to yesterday, probably similar to tomorrow. But wait…what's this? "Snowflakes on the Cherry Blossoms" sings the Drudge Report. "An unseasonable cold snap put a chill on Easter Sunday services across the Southeast and much of the rest of the country, moving some events indoors and adding layers over spring frocks." Now THAT is something we had not counted on. If the weather we exist under is prone to such peculiar irregularities, what of the rest of the news? Is it possible that the tides of the subprime tsunami may soon recede? Might the American consumer suddenly begin to exhibit a heretofore dormant strain of fiscal prudence? Is it possible that the Chinese's voracious appetite for commodities will plummet alongside their assiduous manufacturing of the world's supply of, well, almost everything? Are these scenarios, for better of for worse, even possible? In a word, yes. But are they likely? Well, we will dutifully check tomorrow's headlines and let you know. Until then, we once again turn to the Rude readership for their take on the happenings around the world and at home in today's Monday Mailbag. First up, an email sent to Kevin Kerr, editor of the Resource Trader Alert. ------------------------------ Hi Kevin,
Awhile back I wrote you saying basically given enough time the American Farmers can screw up any good market…I know…I'm a farmer myself. Four dollar corn seemed to be the magical number for lots of acres in 2007…and we've seen corn take a dive south and very few acres have even been planted as of April 6, 2007. Here in Ohio today we're enjoying (LoL) freezing temperatures and snow flurries…not exactly the best environment for growing corn or soybeans. I think over the last twenty-some years I've learned just what you constantly say in you emails. A trade is never a loss until it shows up on that little paper your broker sends you. Corn basically grows from mid April to around the first part of October. The South will have more corn acres which is no big deal to me. It can get real warm down there come June and July and, if not irrigated, rather dry which can kill corn yields in a week. Basically, it not the "Corn Belt." Of course, when the hurricanes come through they "miss" every acre of corn…sure. Even with all the additional acres the corn market just put in the lows for the year if demand stays anywhere near the last 6 month's action. It always thrills me how we're going to have records yields even before it's planted. I have my doubts that we've even seen the highs for this crop yet. The US was exporting corn right and left at $4.50…I wonder if anybody thinks $3.60 might just be a steal? Something you can check out on your midwestern trip…the USDA (which I've renamed the dept. of rip-off every farmer you can) comes out with all these figures and compares them to last year…add them up…somewhere we gained over 6 million acres. Last time I checked my farm hasn't grown any. Of course, this is funny bookkeeping which serves Washington well. Is there anybody who believes anything out of Washington? Next thing you know, the dollar will suddenly become super strong and everybody will get a new manufacturing job and we'll have zero unemployment…especially in Ohio. Have a good trip…and I enjoy your RTA emails! Daryl ----- Government Guaranteed Gold ----- From Hulbert's #1 Ranked Advisory Letter of the Last 5 Years, The Closest Thing to No
risk Wealth on the Market Today… "Government Guaranteed Gold" This new U.S. government-backed guarantee lets you own gold with no risk… but with 100% of the gains should gold prices take off. Here's the catch… You must act on this by April 17, 2007… or you risk missing the official deadline and getting shut out of this forever…Click here for more information: ------------------------------------------------- Dear Rude, Some time ago when you were asking for possible water technology companies I sent info about Hyflux which you shared with your readers. Today I comment about something else. First, I am a follower of Uranium. Fairly early-on I bought Urasia (uuu.tx) and watched it triple, then took my principle out, and have held it since then. Now SXR Uranium One is acquiring Urasia and it popped up very well. I really like Uranium! Despite enthusiasm for Uranium, it has become very speculative territory. Second, I also am greatly interested in coal to liquid technologies as there is an abundance of coal in the ground that nations know how to tap (US/China, etc)…. Read on here. A while back I bought Sasol (SSL) & Headwaters (HW), both cheap, to that end! Any thoughts on the above? FYI - In the past few years I also bought: ECA, PTR, Shenhua, Lukoil, PCU, Jiangxi Copper, Husky Energy, Petrokazakhstan - acquired, and have no regrets. I am an American based in Asia, Philippines to be exact. Cheers!
Jim ---------------------------------- Dear Rude, With derivatives now approaching 800 trillion USD (and somehow growing at a compounded rate exceeding the world combined GDP's); and while UBS has a derivative hoard too big for the Swiss to ever bail out; it is interesting to know that there are only 11 AAA rated banks in the entire world: 10 in Europe and the remaining one is in Australia!! 0 are in Asia, Africa and the Americas!! Let us hope that some poorly rated banks do not buy up too many of the remaining AAA rated banks. Sincerely,
Paul Weber -------------------------------------------------------------- Joel's Endnote: We'll be back with all the unsurprising headlines tomorrow…hopefully
with surprising insights about them. In the meantime, send any thoughts you have on
today's news to us here at aussiejoel@the-rude-awakening.com . Cheers, Joel Bowman
Managing Editor
Rude Awakening | 
