Ed Seykota and The Whipsaw Song

Commodities Rise Most in 7 Weeks; Oil, Fuel, Corn Hit Records
(Bloomberg) -- Commodities jumped the most in two weeks as crude oil, gasoline and corn surged to records following U.S. government reports signaling demand for energy and grain still outpacing supplies.

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• (FT) The world's leading banks have accepted much of the blame for the credit crisis in an attempt to stave off calls for more regulation, even as the International Monetary Fund slashed global growth estimates and warned that the US would suffer a recession.
  
  

• GDP in the Euro area rose 2.6% in 2007.
  
  

• The U.S. Department of Energy said:
  Supplies of crude oil fell 3.2 million barrels to 316.0 million barrels.
  Supplies of gasoline fell 3.4 million barrels
  Supplies of heating oil fell 2.7 million barrels.
  Refinery use rose from 82.4% to 83.0% of capacity.
  Gasoline demand rose o.3% YoY
  Distillate demand was unchanged YoY.
  (Oil hits record above $112 after US inventories)
  
  

• The USDA's estimate for 2007-2008 U.S. ending stocks of:
  Corn was reduced from 1.438 to 1.283 billion bushels.
  Soybeans were raised from 140 to 160 million bushels.
  Wheat is unchanged at 242 million bushels.
  Sugar was reduced from 1.978 to 1.950 million tons.
  Cotton was raised from 9.40 to 9.70 million bales.
  

• The USDA's estimate for 2007-2008 world ending stocks of:
  Corn was reduced from 104 to 103 million tons.
  Soybeans were increased from 47.4 to 49.3 million tons.
  Wheat was increased from 110.4 to 112.5 million tons.
  Cotton was increased from 59.2 to 59.6 million bales.
  

• The USDA increased its estimate of 2008 beef production from 26.4 to 26.6 billion pounds, up 0.6% YoY.
  

• The USDA increased its estimate of 2008 pork production from 23.1 to 23.5 billion pounds, up 7.3% YoY.
  
  

• The USDA increased its estimate of Florida's 2007-2008 orange crop from 167 to 169 million boxes.
  
  
  

• Brazil estimated the upcoming coffee harvest at 44.2 million bags.

• Gold Fields Mineral said that 2008 gold production will remain stable, suggesting to some, that this will result in a tightening of supply.
  

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• The National Association of Realtors said the index of pending home sales fell from 86.2 to 84.6 in February.
  

• Home prices in the U.K. fell 2.5% in February.
  

• The USDA said that 45% of the winter wheat crop was rated good to excellent, down from 64% last year.

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• Japan's index of leading indicators increased from 36.4% to 50% in February.

Iceland contagion may spread far and wide
Fitch said countries that run current account deficits above 10pc of GDP for any length time almost always come to grief. East Asia's debt crisis in 1997 erupted before any state reached double digits. Iceland's deficit is now 16pc of GDP. Latvia is at 25pc, Bulgaria 19pc, Georgia 18pc, Estonia 16pc, Lithuania 14pc, Romania 14pc and Serbia 13pc. The region will need $337bn in foreign loans this year.

Borrowing in foreign currencies was all the rage in the heady days of the credit bubble. Most mortgages in Hungary over the last two years have been in Swiss francs, with the Balkans and Poland not far behind. This is now turning into slow torture. The franc has risen 5pc against the euro since October. The real level of the debt is ratcheting up.

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• U.S. unemployment rate rose from 4.8% to 5.1% in March

• Canada’s unemployment rate increased from 5.8% to 6.0% in March
  Canada’s consumer confidence fell from 96.5 to 94.5
  

• Australia's retail sales fell 0.1% in February.

• The Philippine government proposed a law that makes the hoarding of rice a crime punishable by life imprisonment.
  

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• The Institute of Supply Managements' index of U.S. services rose from 49.3 to 49.6 in March.

• Retail sales volume in the Euro area fell 0.5%.
  

• Service index in the Euro area dropped from 52.3 to 51.6.
  

• Corn rose above $6 a bushel for the first time ever in Chicago, as cool wet weather in the Midwest threatens to delay planting.
  

False ideology at the heart of the financial crisis
By George Soros
Instead of reshuffling regulatory agencies, the authorities ought to prepare for the next shoes to drop. I shall mention only two. There is an esoteric financial instrument called credit default swaps. The notional amount of CDS contracts outstanding is roughly $45,000bn. To put it into perspective, that is about equal to half the total US household wealth and about five times the national debt. The market is totally unregulated and those who hold the contracts do not know whether their counterparties have adequately protected themselves. If and when defaults occur, some of the counterparties are likely to prove unable to fulfil their obligations. This prospect hangs over the financial markets like a sword of Damocles that is bound to fall, but only after some defaults have occurred

Daily caffeine 'protects brain'
Coffee may cut the risk of dementia by blocking the damage cholesterol can inflict on the body, research suggests

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• U.S. factory orders fell 1.3% in February, weaker than expected
  

• Weak dollar boosts Long Beach (CA) exports 36%, but cuts imports 7.6% in February.
  
  

• The U.S. Department of Energy said:
  Supplies of crude oil rose 7.4 million barrels to 319.2 million barrels.
  Supplies of gasoline fell 4.5 million barrels.
  Supplies of heating oil supplies fell 1.3 million barrels.
  Refinery use increased from 82.2% to 82.4% of capacity.
  Gasoline demand was unchanged.
  Distillate demand fell 3.1%.
  
  

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• The Institute of Supply Management said t its index of U.S. manufacturing increased from 48.3 to 48.6 in March,
  

• U.S. Construction spending fell 0.3% MoM and 3.5% YoY.
  

• The unemployment rate in the Euro area unchanged at 7.1%.
  
  

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• The Chicago Purchasing Managers' index rose from 44.5 to 48.2 in March.
  
• Canada’s GDP rose 0.6% MoM, and 2.2% YoY
  

• Japan's industrial production fell 1.2% in February.
  

• U.K.'s index of services rose 0.6% in January.
  
  

• In 2008 the USDA expects farmers to plant:
  86.0 million acres of corn, down 8% YoY.
  74.8 million acres of soybeans, up 18% YoY
  63.8 million acres of wheat, up 6% YoY.
  9.4 million acres of cotton, down 13% YoY.
  

• The USDA said, as of March 1st, U.S. stocks of:
  Corn totaled 6.86 billion bushels, up 13% YoY.
  Soybeans totaled 1.43 billion bushels, down 20% YoY.
  Wheat totaled 710 million bushels, down 17% YoY.

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• U.S. Personal incomes rose 0.5% in February, better than expected. Consumer spending rose 0.1%.
  
  

• The University of Michigan's consumer sentiment index fell from 70.8 to 69.5
  

• U.K.'s GDP rose 0.6% QoQ and 2.8% YoY.
  

• Japan’s T unemployment rate rose from 3.8% to 3.9% in February.
  Japan's consumer prices fell 0.2% MoM, but rose 1.0% YoY.
  
  

• The U.S. produced 6.48 billion gallons of ethanol in 2007, up 34% YoY. The U.S. capacity is now 13.4 billion gallons with another 5.2 billion gallons on the way in 08.
  

• The USDA said that, on March 1st, there were 65.909 million head of hogs and pigs in the U.S. -- up 6.5% YoY.
  

• (FT) Rice prices jumped 30% to an all-time high, raising fears of fresh outbreaks of social unrest across Asia where the grain is a staple food for more than 2.5bn people
  

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• U.S. GDP was unrevised at 0.6% growth for the fourth quarter of 2007, the slowest pace since late 2002.
  

• The U.S. economy seems to be slipping into recession and the Federal Reserve must cushion the pain and make it as brief as possible, a Fed policy maker said.
  

• Ahead of the United States Department of Agriculture's planting intentions estimates out Monday, March 31, Allendale Inc. sees a 7.2 million acre decrease in corn acreage, a 10.6 million acre increase for soybeans, and a slightly higher total wheat planting figure

Senate panel chief questions Dimon's Fed seat
"I have great respect for Jamie Dimon, who's head of JPMorgan," Dodd, a Connecticut Democrat, said in the interview with National Public Radio.

"He also sits on the board of directors at the Federal Reserve in New York. Having decisions being made over the weekend with an institution where its leader is also a member of that board raises some serious issues," Dodd said. "It aught to be addressed."

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• U.S. new home sales fell 1.8% MoM and 29.8% YoY
  

• U.S. durable goods orders fell 1.7% in February. Excluding transportation, orders fell 2.6%.
  

• German business confidence increased from 104.1 to 104.8
  

• Industrial new orders for the Euro area 15 rose 2.0% MoM and 7.3% YoY.
  
  

• The U.S. Department of Energy said:
  Supplies of crude oil were unchanged at 311.8 million barrels.
  Supplies of gasoline fell 3.3 million barrels
  Supplies of heating oil fell 1.3 million barrels.
  Refinery use fell from 83.8% to 82.2% of capacity last week.
  Gasoline demand fell 0.3% YoY
  Distillate demand fell 4.0% YoY.
  
  
  
  
  

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• Standard & Poor's/Case-Shiller index of U.S. home prices fell by 11.4% in January, the biggest monthly drop since the index began in 1987.
  

• The Conference Board's consumer confidence index fell from 76.4 to 64.5 in March, weaker than expected -- it’s the lowest in 34 years.
  
  

• Canada’s retail sales rose 1.5% in January.
  

• Iceland's central bank raised its key interest rate by 1.25 percentage points to 15%, citing higher-than-expected inflation.
  

• The American Coalition for Ethanol says gasoline prices would be 6 to 9 cents per gallon higher were it not for ethanol.

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• The National Association of Realtors said existing home sales were at an annual rate of 5.03 million units in February, up 2.9% MoM and better than expected. Inventories of unsold homes fell 3% to 4.03 million units.
  

• Japan's sentiment index fell from +0.5 to -9.3 in the first quarter.
  

• (WSJ) Many Chinese towns, lacking irrigation systems, rely on ad-hoc well digging, a practice that is in effect reducing their ground water levels year by year.
  
  

• J.P. Morgan quintupled the price it will pay for Bear Stearns to $10 a share.
  

• India reiterates claim they will not need wheat imports in the coming year - a quite optimistic claim if production estimates could be believed.
  

• The Russian government said it would extend its 40% export tax on grain until July 1 from a previous ending date of April 30th.
  

• The USDA reports that commercial red meat production during February 2008 totaled 3.968 billion pounds, down 10% from January's 4.416 billion but up 10% from February 2007's 3.615 billion.