[toeslist] US Derivative reform : The food bubble: How Wall Street starved millions and got away with it By Frederick Kaufman
Riaz Tayob
The food bubble:
How Wall Street starved millions and got away with it
By Frederick Kaufman<http://harpers.org/subjects/FrederickKaufman>
Frederick Kaufman is a contributing editor of Harpers Magazine. His
last article for the magazine, Let Them Eat
Cas<http://www.harpers.org/archive/2009/06/0082533>h, appeared in
the June 2009 issue.
The history of food took an ominous turn in 1991, at a time when
no one was paying much attention. That was the year Goldman Sachs
decided our daily bread might make an excellent investment.
Agriculture, rooted as it is in the rhythms of reaping and sowing,
had not traditionally engaged the attention of Wall Street bankers,
whose riches did not come from the sale of real things like wheat
or bread but from the manipulation of ethereal concepts like risk
and collateralized debt. But in 1991 nearly everything else that
could be recast as a financial abstraction had already been considered.
Food was pretty much all that was left. And so with accustomed care
and precision, Goldmans analysts went about transforming food into
a concept. They selected eighteen commodifiable ingredients and
contrived a financial elixir that included cattle, coffee, cocoa,
corn, hogs, and a variety or two of wheat. They weighted the
investment value of each element, blended and commingled the parts
into sums, then reduced what had been a complicated collection of
real things into a mathematical formula that could be expressed as
a single manifestation, to be known thenceforward as the Goldman
Sachs Commodity Index. Then they began to offer shares.
As was usually the case, Goldmans product flourished. The prices
of cattle, coffee, cocoa, corn, and wheat began to rise, slowly at
first, and then rapidly. And as more people sank money into Goldmans
food index, other bankers took note and created their own food
indexes for their own clients.
Investors were delighted to see the value of their venture increase,
but the rising price of breakfast, lunch, and dinner did not align
with the interests of those of us who eat. And so the commodity
index funds began to cause problems.
Wheat was a case in point. North America, the Saudi Arabia of cereal,
sends nearly half its wheat production overseas, and an obscure
syndicate known as the Minneapolis Grain Exchange remains the supreme
price-setter for the continents most widely exported wheat, a
high-protein variety called hard red spring. Other varieties of
wheat make cake and cookies, but only hard red spring makes bread.
Its price informs the cost of virtually every loaf on earth.
As far as most people who eat bread were concerned, the Minneapolis
Grain Exchange had done a pretty good job: for more than a century
the real price of wheat had steadily declined. Then, in 2005, that
price began to rise, along with the prices of rice and corn and soy
and oats and cooking oil. Hard red spring had long traded between
$3 and $6 per sixty-pound bushel, but for three years Minneapolis
wheat broke record after record as its price doubled and then doubled
again. No one was surprised when in the first quarter of 2008
transnational wheat giant Cargill attributed its 86 percent jump
in annual profits to commodity trading. And no one was surprised
when packaged-food maker ConAgra sold its trading arm to a hedge
fund for $2.8 billion. Nor when The Economist announced that the
real price of food had reached its highest level since 1845, the
year the magazine first calculated the number.
Nothing had changed about the wheat, but something had changed about
the wheat market. Since Goldmans innovation, hundreds of billions
of new dollars had overwhelmed the actual supply of and actual
demand for wheat, and rumors began to emerge that someone, somewhere,
had cornered the market. Robber barons, gold bugs, and financiers
of every stripe had long dreamed of controlling all of something
everybody needed or desired, then holding back the supply as demand
drove up prices. But there was plenty of real wheat, and American
farmers were delivering it as fast as they always had, if not even
a bit faster. It was as if the price itself had begun to generate
its own demandthe more hard red spring cost, the more investors
wanted to pay for it.
Its absolutely mind-boggling, one grain trader told the Wall Street
Journal. You dont ever want to trade wheat again, another told the
Chicago Tribune.
We have never seen anything like this before, Jeff Voge, chairman
of the Kansas City Board of Trade, told the Washington Post. This
isnt just any commodity, continued Voge. It is food, and people
need to eat.
The global speculative frenzy sparked riots in more than thirty
countries and drove the number of the worlds food insecure to more
than a billion. In 2008, for the first time since such statistics
have been kept, the proportion of the worlds population without
enough to eat ratcheted upward. The ranks of the hungry had increased
by 250 million in a single year, the most abysmal increase in all
of human history.
Then, like all speculative bubbles, the food bubble popped. By late
2008, the price of Minneapolis hard red spring had toppled back to
normal levels, and trading volume quickly followed. Of course, the
prices world consumers pay for food have not come down so fast, as
manufacturers and retailers continue to make up for their own heavy
losses.
The gratuitous damage of the food bubble struck me as not merely a
disgrace but a disgrace that might easily be repeated. And so I
traveled to Minneapoliswhere the reality of hard red spring and the
price of hard red spring first went their separate waysto discover
how such a thing could have happened, and if and when it would
happen again.
________________________________
The name of the Minneapolis Grain Exchange may conjure images of
an immense concrete silo towering over the prairie, but the exchange
is in fact a rather severe neoclassical steel-frame building that
shares the downtown corner of Fourth Street and Fourth Avenue with
City Hall, the courthouse, and the jail.
I walked through its vestibule of granite and Italian marble, past
renderings of wheat molded into the terra-cotta cartouches, and as
I waited for the wheat-embossed elevator I tried not to gawk at the
gold-plated mail chute. For more than a century, the trading floor
of the Minneapolis Grain Exchange had been the place where wheat
acquired a price, but as I stepped out of the elevator the opening
bell tolled and echoed across a vast, silent, and chilly chamber.
The place was abandoned, the phones ripped out of the walls, the
octagonal grain pits littered with snakes of tangled wire.
I wandered across the wooden planks of the old pits, scarred by the
boots of countless grain traders, and I peered into the dark and
narrow recesses of the phone booths where those traders had scribbled
down their orders. Beyond the booths loomed the massive cash-grain
tables, starkly illuminated by rays of sunlight. In the old days,
when brokers and traders looked into one anothers faces, not computer
screens, they liked to examine the grain before they bought it.
Now an electronic board began to populate with green, red, and
yellow numbers that told the price of barley, canola, cattle, coffee,
copper, cotton, gold, hogs, lumber, milk, oats, oil, platinum, rice,
and silver. Beneath them shimmered the indices: the Dow, the S&P
500, and, at the very bottom, the Goldman Sachs Commodity Index.
Even the video technology was quaint, a relic from the Carter years,
when trade with the Soviet Union was the final frontier, long before
that moment in 2008 when the chief executive officer of the Minneapolis
Grain Exchange, Mark Bagan, decided that the future of wheat was
not on a table in Minneapolis but within the digital infinitude of
the Internet.
As a courtesy to the speculators who for decades had spent their
workdays executing trades in the grain pits, the exchange had set
up a new space a few stories above the old trading floor, a
gray-carpeted room in which a few dozen beige cubicles were available
to rent, some featuring a view of a parking lot.
I had expected shouting, panic, confusion, and chaos, but no more
than half the cubicles were occupied, and the room was silent. One
of the grain traders was reading his email, another checking ESPN
for the weekend scores, another playing solitaire, another shopping
on eBay for antique Japanese vases.
Were trading wheat, but its wheat were never going to see, Austin
Damiani, a twenty-eight-year-old wheat broker, would tell me later
that afternoon. Its a cerebral experience.
Todays action consisted of a gray-haired man padding from cubicle
to cubicle, greeting colleagues, sucking hard candy. The veteran
eventually ambled off to a corner, to a battered cash-grain table
that had been moved up from the old trading floor. A dozen aluminum
pans sat on the table, each holding a different sample of grain.
The old man brought a pan to his face and took a deep breath. Then
he held a single grain in his palm, turned it over, and found the
crease.
The crease will tell you the variety, he told me. Thats a lost art.
His name was Mike Mullin, he had been trading wheat for fifty years,
and he was the first Minneapolis wheat trader I had seen touch a
grain of the stuff.
Back in the day, buyers and sellers might have spent hours insulting,
cajoling, bullying, and pleading with one another across this
tableanything to get the right price for hard red springbut Mullin
was not buying real wheat today, nor was anybody here selling it.
Above us, three monitors flickered prices from Americas primary
grain exchanges: Chicago, Kansas City, and Minneapolis. Such
geographic specificities struck me as archaic, but there remain
essential differences among these wheat markets, vestiges of
old-fashioned concerns such as latitude and proximity to the Erie
Canal.
Mullin stared at the screens and asked me what I knew about wheat
futures, and I told him that whereas Minneapolis traded the contract
in hard red spring, Kansas City traded in hard red winter and Chicago
in soft red winter, both of which have a lower protein content than
Minneapolis wheat, are less expensive, and are more likely to be
incorporated into a brownie mix than into a baguette. High protein
content makes Minneapolis wheat elite, I told Mullin.
He nodded his head, and we stood in silence and watched the desultory
movement of corn and soy, soft red winter and hard red spring. It
was a slow trading day even if commodities, as Mullin told me, were
overpriced 10 percent across the board. Mullin figured he knew the
real worth of a bushel and had bet the price would soon head south.
Am I short? he asked. Yes I am.
I asked him what he knew about the commodity indexes, like the one
Goldman Sachs created in 1991.
Its a brainless entity, Mullin said. His eyes did not move from the
screen.
You look at a chart. You hit a number. You buy.
________________________________
Grain trading was not always brainless. Joseph parsed Pharaohs dream
of cattle and crops, discerned that drought loomed, and diligently
went about storing immense amounts of grain. By the time famine
descended, Joseph had cornered the marketan accomplishment that
brought nations to their knees and made Joseph an extremely rich
man.
In 1730, enlightened bureaucrats of Japans Edo shogunate perceived
that a stable rice price would protect those who produced their
countrys sacred grain. Up to that time, all the farmers in Japan
would bring their rice to market after the September harvest, at
which point warehouses would overflow, prices would plummet, and,
for all their hard work, Japans rice farmers would remain impoverished.
Instead of suffering through the Osaka markets perennial volatility,
the bureaucrats preferred to set a price that would ensure a living
for farmers, grain warehousemen, the samurai (who were paid in
rice), and the general populationa price not at the mercy of the
annual cycle of scarcity and plenty but a smooth line, gently
fluctuating within a reasonable range.
While Japan had relied on the authority of the government to avoid
deadly volatility, the United States trusted in free enterprise.
After the combined credit crunch, real estate wreck, and stock-market
meltdown now known as the Panic of 1857, U.S. grain merchants
conceived a new stabilizing force: In return for a cash commitment
today, farmers would sign a forward contract to deliver grain a few
months down the line, on the expiration date of the contract. Since
buyers could never be certain what the price of wheat would be on
the date of delivery, the price of a future bushel of wheat was
usually a few cents less than that of a present bushel of wheat.
And while farmers had to accept less for future wheat than for real
and present wheat, the guaranteed future sale protected them from
plummeting prices and enabled them to use the promised payment as,
say, collateral for a bank loan. These contracts let both producers
and consumers hedge their risks, and in so doing reduced volatility.
But the forward contract was a primitive financial tool, and when
demand for wheat exploded after the Civil War, and ever more grain
merchants took to reselling and trading these agreements on a
fast-growing secondary market, it became impossible to figure out
who owed whom what and when. At which point the great grain merchants
of Chicago, Kansas City, and Minneapolis set about creating a new
kind of institution less like a medieval county fair and more like
a modern clearinghouse. In place of myriad individually negotiated
and fulfilled forward contracts, the merchants established exchanges
that would regulate both the quality of grain and the expiration
dates of all forward contractseventually limiting those dates to
five each year, in March, May, July, September, and December. Whereas
under the old system each buyer and each seller vetted whoever might
stand at the opposite end of each deal, the grain exchange now
served as the counterparty for everyone.
The exchanges soon attracted a new species of merchant interested
in numbers, not grain. This was the speculator. As the price of
futures contracts fluctuated in daily trading, the speculator sought
to cash in through strategic buying and selling. And since the
speculator had neither real wheat to sell nor a place to store any
he might purchase, for every long position he took (a promise to
buy future wheat), he would eventually need to place an equal and
opposite short position (a promise to sell). Farmers and millers
welcomed the speculator to their market, for his perpetual stream
of buy and sell orders gave them the freedom to sell and buy their
actual wheat just as they pleased.
Under the new system, farmers and millers could hedge, speculators
could speculate, the market remained liquid, and yet the speculative
futures price could never move too far from the spot (or actual)
price: every ten weeks or so, when the delivery date of the contract
approached, the two prices would converge, as everyone who had not
cleared his position with an equal and opposite position would be
obligated to do just that. The virtuality of wheat futures would
settle up with the reality of cash wheat, and then, as the contract
expired, the price of an ideal bushel would be discovered by hedger
and speculator alike.
No less an economist than John Maynard Keynes applied himself to
studying this miraculous interplay of supply and demand, buyers and
sellers, real wheat and virtual wheat, and he gave the standard
futures-pricing model its own special name. He called it normal
backwardation, because in a normal market for real goods, he found,
futures prices (for things that did not yet exist) generally stayed
in back of spot prices (for things that actually existed).
Normal backwardation created the occasion for so many people to
make so much money in so many ways that numerous other futures
exchanges soon emerged, featuring contracts for everything from
butter, cottonseed oil, and hay to plywood, poultry, and cat pelts.
Speculators traded molasses futures on the New York Coffee and Sugar
Exchange, and if they lost their shirts they could head over to the
New York Burlap and Jute Exchange or the New York Hide Exchange.
And despite the occasional market collapse (onions in 1957, Maine
potatoes in 1976), for more than a century the basic strategy and
tactics of futures trading remained the same, the price of wheat
remained stable, and increasing numbers of people had plenty to
eat.
________________________________
The decline of volatility, good news for the rest of us, drove
bankers up the wall. I put in a call to Steven Rothbart, who traded
commodities for Cargill way back in the 1980s. I asked him what he
knew about the birth of commodity index funds, and he began to
laugh. Commodities had died, he told me. We sat there every day and
the market wouldnt move. People left. They couldnt make a living
anymore.
Clearly, some innovation was in order. In the midst of this dead
market, Goldman Sachs envisioned a new form of commodities investment,
a product for investors who had no taste for the complexities of
corn or soy or wheat, no interest in weather and weevils, and no
desire for getting into and out of shorts and longsinvestors who
wanted nothing more than to park a great deal of money somewhere,
then sit back and watch that pile grow. The managers of this new
product would acquire and hold long positions, and nothing but long
positions, on a range of commodities futures. They would not hedge
their futures with the actual sale or purchase of real wheat (like
a bona-fide hedger), nor would they cover their positions by buying
low and selling high (in the grand old fashion of commodities
speculators). In fact, the structure of commodity index funds ran
counter to our normal understanding of economic theory, requiring
that index-fund managers not buy low and sell high but buy at any
price and keep buying at any price. No matter what lofty highs long
wheat futures might attain, the managers would transfer their long
positions into the next long futures contract, due to expire a few
months later, and repeat the roll when that contract, in turn, was
about to expirethus accumulating an everlasting, ever-growing long
position, unremittingly regenerated.
Youve got to be out of your freaking mind to be long only, Rothbart
said.
Commodities are the riskiest things in the world.
But Goldman had its own way to offset the risks of commodities
tradingif not for their clients, then at least for themselves. The
strategy, standard practice for most index funds, relied on
replication, which meant that for every dollar a client invested
in the index fund, Goldman would buy a dollars worth of the underlying
commodities futures (minus management fees). Of course, in order
to purchase commodities futures, the bankers had only to make a
good-faith deposit of something like 5 percent. Which meant that
they could stash the other 95 percent of their investors money in
a pool of Treasury bills, or some other equally innocuous financial
cranny, which they could subsequently leverage into ever greater
amounts of capital to utilize to their own ends, whatever they might
be. If the price of wheat went up, Goldman made money. And if the
price of wheat fell, Goldman still made moneynot only from management
fees, but from the profits the bank pulled down by investing 95
percent of its clients money in less risky ventures. Goldman even
made money from the roll into each new long contract, every instance
of which required clients to pay a new set of transaction costs.
The bankers had figured out how to extract profit from the commodities
market without taking on any of the risks they themselves had
introduced by flooding that same market with long orders. Unlike
the wheat producers and the wheat speculators, or even Goldmans own
customers, Goldman had no vested interest in a stable commodities
market. As one index trader told me, Commodity funds have historically
made moneyand kept most of it for themselves.
No surprise, then, that other banks soon recognized the rightness
of this approach. In 1994, J.P. Morgan established its own commodity
index fund, and soon thereafter other players entered the scene,
including the AIG Commodity Index and the Chase Physical Commodity
Index, along with initial offerings from Bear Stearns, Oppenheimer,
and Pimco. Barclays joined the group with eight index funds and,
in just over a year, raised close to $3 billion.
Government regulators, far from preventing this strange new way of
accumulating futures, actively encouraged it. Congress had in 1936
created a commission that curbed excessive speculation by limiting
large holdings of futures contracts to bona-fide hedgers. Years
later, the modern-day Commodity Futures Trading Commission continued
to set absolute limits on the amount of wheat-futures contracts
that could be held by speculators. In 1991, that limit was 5,000
contracts. But after the invention of the commodity index fund,
bankers convinced the commission that they, too, were bona-fide
hedgers. As a result, the commission issued a position-limit exemption
to six commodity index traders, and within a decade those funds
would be permitted to hold as many as 130,000 wheat-futures contracts
at any one time.
We have not seen U.S. agriculture rely this much on the market for
almost seventy years, was how Joseph Dial, the head of the commission,
assessed his agencys regulatory handiwork in 1997. This paradigm
shift in the governments farm policy has created a new era for
agriculture.
________________________________
Goldman and all the other banks that followed them into commodity
index funds had figured out how to safeguard themselves, but there
was a lot more money to be made if the banks could somehow convince
everyone else that an inherently risky product designed to protect
the banksand only the bankswas in fact also safe for investors.
Good news came on February 28, 2005, when Gary Gorton, of the
University of Pennsylvania, and K. Geert Rouwenhorst, of the Yale
School of Management, published a working paper called Facts and
Fantasies About Commodities Futures. In forty graph-and-equation-filled
pages, the authors demonstrated that between 1959 and 2004, a
hypothetical investment in a broad range of commoditiessuch as an
indexwould have been no more risky than an investment in a broad
range of stocks. Whats more, commodities showed a negative correlation
with equities and a positive correlation with inflation. Food was
always a good investment, and even better in bad times. Money
managers could hardly wait to spread the news.
Since this discovery, reported the Financial Times, investors had
become attracted to commodities in the hope that returns will differ
from equities and bonds and be strong in case of inflation. Another
study noted as well that commodity index funds offered an inherent
or natural return that is not conditioned on skill. And so the
long-awaited legion of new investors began buying into commodity
index funds, and the food bubble truly began to inflate.
A few years after Facts and Fantasies appeared, and almost as if
to prove Gorton and Rouwenhorsts point, the financial crisis hit
mortgage, credit, and real estate marketsand, just as the scholars
had predicted, those who had invested in commodities prospered.
Money managers had to decide where to park what remained of their
endowment, hedge, and pension funds, and the bankers were ready
with something that looked very safe: in 2003, commodity index
holdings amounted to a not particularly awe-inspiring $13 billion,
but by 2008, $317 billion had poured into the funds. As long as the
commodities brokers kept rolling over their futures, it looked as
though the day of reckoning might never come. If no one contemplated
the effects that this accumulation of long-only futures would
eventually have on grain markets, perhaps it was because no one had
never seen such a massive pile of long-only futures.
From one perspective, a complicated chain of cause and effect had
inflated the food bubble. But there were those who understood what
was happening to the wheat markets in simpler terms. I dont have
to pay anybody for anything, basically, one long-only indexer told
me. Thats the beauty of it.
________________________________
Mark Bagan, CEO of the Minneapolis Grain Exchange, invited me to
his office for a talk. A self-proclaimed grain brat, Bagan grew up
among bales, combines, and concrete silos all across the United
States before attending Minnesota State to play football. As I
settled into his oversize couch, admired his neatly tailored
pinstriped suit, and listened to his soft voice, it occurred to me
that if the grain markets were a casino, Mark Bagan was the biggest
bookie. Without him, there could be no bets on hard red spring.
From our perspective, were price neutral, value neutral, Bagan said.
I asked him about the commodity index funds and whether they had
transformed the traditional wheat market into something wholly
speculative, artificial, and hidden. Why did anyone except bankers
even need this new market?
There are plenty of markets out there that have yet to be thought
of and will be very successful, Bagan said. Then he veered into the
intricacies of running a commodities exchange. With our old system,
we could clear forty-eight products, he said. Now we can have more
than fifty thousand products traded. Its a big number, building
derivatives on top of derivatives, but weve got to be prepared for
that: the financial world is evolving so quickly, there will always
be a need for new risk-management products.
Bagan had not answered my question about the funds, so I asked
again, as directly as I could: What did he make of the fact that
speculation in commodity index funds had caused a global run on
hard red spring?
Bagan slowly shook his head, as though he were an elementary-school
teacher trying to explain a basic conceptsubtraction? ice?to a
particularly dense child. The Goldman Sachs Commodity Index did not
include a single hard red spring future, he told me. Minneapolis
wheat may have set records in 2008 and led global food prices into
the stratosphere, but it had nothing to do with Goldmans fund. There
just wasnt enough speculation in the hard red spring market to
satisfy the bankers. Not enough liquidity. Bagan smiled. Was there
anything else I wanted to know?
Plenty, but there was nothing more Bagan was about to disclose. As
I left the office, I remembered the rumors Id heard at a grain-crisis
conference in Washington, D.C., a few months earlier. Between
interminable speeches about price ceilings and grain reserves, more
than one wheat expert had confided, strictly on background, that
at the height of the bubble, Minneapolis wheat had been cornered.
No one could say whether the culprit had been Cargill or the Canadian
Wheat Board or any other party, but the consensus was that as the
world had cried for food, someone, somewhere, had been hoarding
wheat.
________________________________
Imaginary wheat bought anywhere affects real wheat bought everywhere.
But as it turned out, index traders had purchased the majority of
their long wheat futures on the oldest and largest grain clearinghouse
in America, the Chicago Mercantile Exchange. And so I found myself
pushing through the frigid blasts of the LaSalle Street canyon. If
I could figure out precisely how and when wheat futures traded in
Chicago had driven up the price of actual wheat in Minneapolis, I
would know why a billion people on the planet could not afford
bread.
The man who had agreed to escort me to the floor of the exchange
traded grain for a transnational corporation, and he told me several
times that he could not talk to the press, and that if I were to
mention his name in print he would lose his job. So I will call him
Mr. Silver.
In the basement cafeteria of the exchange I bought Mr. Silver a
breakfast of bacon and eggs and asked whether he could explain how
index funds that held long-only Chicago soft red winter wheat futures
could have come to dictate the spot price of Minneapolis hard red
spring. Had the world starved because of a corner in Chicago? Mr.
Silver looked into his scrambled eggs and said nothing.
So I began to tell him everything I knew, hoping he would eventually
be inspired to fill in the blanks. I told him about Joseph in Egypt,
Osaka in 1730, the Panic of 1857, and futures contracts for cat
pelts, molasses, and onions. I told him about Goldmans replication
strategy, Gorton and Rouwenhorsts 2005 paper, and the rise and rise
of index funds. I told him that at least one analyst had estimated
that investments in commodity index funds could easily increase to
as much as $1 trillion, which would result in yet another global
food catastrophe, much worse than the one before.
And I told Mr. Silver something else I had discovered: About two
thirds of the Goldman index remains devoted to crude oil, gasoline,
heating oil, natural gas, and other energy-based commodities. Wheat
was nothing but an indexical afterthought, accounting for less than
6.5 percent of Goldmans fund.
Mr. Silver sipped his coffee.
Even 6.5 percent of the Goldman Sachs Commodity Index made for a
historically unprecedented pile of long wheat futures, I went on.
Especially when those index funds kept rolling over the contracts
they already hadall of them long, only a smattering bought in Kansas
City, none in Minneapolis.
And then it occurred to me: It was neither an individual nor a
corporation that had cornered the wheat market. The index funds may
never have held a single bushel of wheat, but they were hoarding
staggering quantities of wheat futures, billions of promises to
buy, not one of them ever to be fulfilled.
The dreaded market corner had emerged not from a shortage in the
wheat supply but from a much rarer economic occurrence, a shock
inspired by the ceaseless call of index funds for wheat that did
not exist and would never need to exist: a demand shock. Instead
of a hidden mastermind committing a dastardly deed, it was old Mike
Mullins brainless entity, the investment instrument itself, that
had taken over and created the effects of a traditional corner.
Mr. Silver had stopped eating his eggs.
I said that I understood how the index funds unprecedented accumulation
of Chicago futures could create the appearance of a market corner
in Chicago. But there was still something I didnt get. Why had the
wheat market in Minneapolis begun to act as though it too had been
cornered when none of the index funds held hard red spring? Why had
the worlds most widely exported wheat experienced a sudden surge
in price, a surge that caused a billion people
At which point Mr. Silver interrupted my monologue.
Index-fund buying had pushed up the price of the Chicago contract,
he said, until the price of a wheat future had come to equal the
spot price of wheat on the Chicago Mercantile Exchangeand still,
the futures price surged. The result was contango.
I gave Mr. Silver a blank look. Contango, he explained, describes
a market in which future prices rise above current prices. Rather
than being stable and steady, contango markets tend to be overheated
and hysterical, with spot prices rising to match the most outrageously
escalated futures prices. Indeed, between 2006 and 2008, the spot
price of Chicago soft red winter shot up from $3 per bushel to $11
per bushel.
The ever-escalating price of wheat and the newfound strength of
grain markets were excellent news for the new investors who had
flooded commodity index funds. No matter that the mechanism created
to stabilize grain prices had been reassembled into a mechanism to
inflate grain prices, or that the stubbornly growing discrepancy
between futures and spot prices meant that farmers and merchants
no longer could use these markets to price crops and manage risks.
No matter that contango in Chicago had disrupted the operations of
the nations grain markets to the extent that the Senate Committee
on Homeland Security and Governmental Affairs had begun an investigation
into whether speculation in the wheat markets might pose a threat
to interstate commerce.
And then there was the question of the millers and the warehousersthose
who needed actual wheat to sell, actual bread that might feed actual
people.
Mr. Silver lowered his voice as he informed me that as the price
of Chicago wheat had bubbled up, commercial buyers had turned
elsewhereto places like Minneapolis. Although hard red spring
historically had been more expensive than soft red winter, it had
begun to look like a bargain. So brokers bought hard red spring and
left it to the chemists at General Mills or Sara Lee or Dominos to
rejigger their dough recipes for a higher-protein variety.
The grain merchants purchased Minneapolis hard red spring much
earlier in the annual cycle than usual, and they purchased more of
it than ever before, as real demand began to chase the ever-growing,
everlasting long. By the time the normal buying season began, drought
had hit Australia, floods had inundated northern Europe, and a vogue
for biofuels had enticed U.S. farmers to grow less wheat and more
corn. And so, when nations across the globe called for their annual
hit of hard red spring, they discovered that the so-called visible
supply was far lower than usual. At which point the markets veered
into insanity.
Bankers had taken control of the worlds food, money chased money,
and a billion people went hungry.
Mr. Silver finished his bacon and eggs and I followed him upstairs,
beyond two sets of metal detectors, dozens of security staff, and
a gaudy stained-glass image of Hermes, god of commerce, luck, and
thievery. Through the colored glass that outlined the deity I caught
my first glimpse of the immense trading floor of the Chicago
Mercantile Exchange. The electronic board had already begun to
populate with green, yellow, and red numbers.
________________________________
The wheat harvest of 2008 turned out to be the most bountiful the
world had ever seen, so plentiful that even as hundreds of millions
slowly starved, 200 million bushels were sold for animal feed.
Livestock owners could afford the wheat; poor people could not.
Rather belatedly, real wheat had shown up againand lots of it. U.S.
Department of Agriculture statistics eventually revealed that 657
million bushels of 2008 wheat remained in U.S. silos after the
buying season, a record-breaking carryover. Soon after that bounteous
oversupply had been discovered, grain prices plummeted and the wheat
markets returned to business as usual.
The worldwide price of food had risen by 80 percent between 2005
and 2008, and unlike other food catastrophes of the past half century
or so, the United States was not insulated from this one, as 49
million Americans found themselves unable to put a full meal on the
table. Across the country demand for food stamps reached an all-time
high, and one in five kids came to depend on food kitchens. In Los
Angeles nearly a million people went hungry. In Detroit armed guards
stood watch over grocery stores. Rising prices, mused the New York
Times, might have played a role.
On the plane to Minneapolis I had read a startling prediction: It
may be hard to imagine commodity prices advancing another 460 percent
above their mid-2008 price peaks, hedge-fund manager John Hummel
wrote in a letter to clients of AIS Capital Management. But the
fundamentals argue strongly, he continued, that these sectors have
significant upside potential. I made a quick calculation: 460 percent
above 2008 peaks meant hamburger meat priced at $20 a pound.
On the ground in Minneapolis I put the question to Michael Ricks,
chairman of the Minneapolis Grain Exchange. Could 2008 happen again?
Could prices rise even higher?
Absolutely, said Ricks. Were in a volatile world.
I put the same question to Layne Carlson, corporate secretary and
treasurer of the Minneapolis Grain Exchange. Yes, said Carlson, who
then told me the two principles that govern the movement of grain
markets: fear and greed.
But wasnt it part of a grain exchanges responsibility to ensure a
stable valuation of our daily bread?
I view what were working with as widgets, said Todd Posthuma, the
exchanges associate director of market operations and information
technology, the man responsible for clearing $100 million worth of
trades every day. I think being an employee at an exchange is
different from adding value to the food system.
Above Mark Bagans oversize desk hangs a jagged chart of futures
prices for the hard red spring wheat contract, mapping every peak
and valley from 1973 to 2006. The highs on Bagans chart reached
$7.50. Of course, had 2008 been included, the spikes would have,
literally, gone through the roof.
Would the price of wheat rise again?
The flow of money into commodities has changed significantly in the
last decade, explained Bagan. Wheat, corn, soft commoditiesI dont
see these dollars going away. It already has happened, he said. Its
inevitable.
__._,_.___ Reply to
sender<mailto:riaz....@gmail.com?subject=US%20Derivative%20reform%20:%20The
%20food%20bubble:%20How%20Wall%20Street%20starved%20
%20millions%20and%20 got%20away%20with%20it%20By%20Frederick%20Kaufman>
| Reply to
group<mailto:toes...@yahoogroups.com?subject=US%20Derivative%20reform%20:%20
The%20food%20bubble:%20How%20Wall%20Street%20starved%20
%20millions%20and %20got%20away%20with%20it%20By%20Frederick%20Kaufman>
| Reply via web
post<http://groups.yahoo.com/group/toeslist/post;_ylc=X3oDMTJxMW1iNGQ4BF9TAzk
3MzU5NzE0BGdycElkAzIxNTc3MDcEZ3Jwc3BJZAMxNzA1MDgzNDY5BG1zZ0lkAzIwNTI5BHNlYwNm
dHIEc2xrA3JwbHkEc3RpbWUDMTI3NzIyMDQ4Mg--?act=reply&messageNum=20529>
| Start a New
Topic<http://groups.yahoo.com/group/toeslist/post;_ylc=X3oDMTJlZm51bzRtBF9TAz
k3MzU5NzE0BGdycElkAzIxNTc3MDcEZ3Jwc3BJZAMxNzA1MDgzNDY5BHNlYwNmdHIEc2xrA250cGM
Ec3RpbWUDMTI3NzIyMDQ4Mg--> Messages in this
topic<http://groups.yahoo.com/group/toeslist/message/20529;_ylc=X3oDMTM2YXJhb
G85BF9TAzk3MzU5NzE0BGdycElkAzIxNTc3MDcEZ3Jwc3BJZAMxNzA1MDgzNDY5BG1zZ0lkAzIwNT
I5BHNlYwNmdHIEc2xrA3Z0cGMEc3RpbWUDMTI3NzIyMDQ4MgR0cGNJZAMyMDUyOQ-->
(1) Recent Activity:
Visit Your
Group<http://groups.yahoo.com/group/toeslist;_ylc=X3oDMTJlNW9sdW9wBF9TAzk3MzU
5NzE0BGdycElkAzIxNTc3MDcEZ3Jwc3BJZAMxNzA1MDgzNDY5BHNlYwN2dGwEc2xrA3ZnaHAEc3Rp
bWUDMTI3NzIyMDQ4Mg--> MARKETPLACE
Stay on top of your group activity without leaving the page you're
on - Get the Yahoo! Toolbar
now.<http://us.ard.yahoo.com/SIG=15o14c3pe/M=493064.13983314.14041046.1329843
0/D=groups/S=1705083469:MKP1/Y=YAHOO/EXP=1277227683/L=bfefa822-7e12-11df-b08d
-3f60d7973d95/B=6iYj3mKImoI-/J=1277220483914342/K=b2hLqQInhqOV5FBneToZ6g/A=60
60255/R=0/SIG=1194m4keh/*http://us.toolbar.yahoo.com/?.cpdl=grpj>
________________________________
Get great advice about dogs and cats. Visit the Dog & Cat Answers
Center.<http://us.ard.yahoo.com/SIG=15oinlh2u/M=493064.13814537.14041040.1083
5568/D=groups/S=1705083469:MKP1/Y=YAHOO/EXP=1277227683/L=bfefa822-7e12-11df-b
08d-3f60d7973d95/B=6yYj3mKImoI-/J=1277220483914342/K=b2hLqQInhqOV5FBneToZ6g/A
=6078812/R=0/SIG=114ae4ln1/*http://dogandcatanswers.yahoo.com/>
________________________________
Hobbies & Activities Zone: Find others who share your passions!
Explore new
interests.<http://us.ard.yahoo.com/SIG=15og1v7vc/M=493064.14012770.13963757.1
3298430/D=groups/S=1705083469:MKP1/Y=YAHOO/EXP=1277227683/L=bfefa822-7e12-11d
f-b08d-3f60d7973d95/B=7CYj3mKImoI-/J=1277220483914342/K=b2hLqQInhqOV5FBneToZ6
g/A=6015306/R=0/SIG=11vlkvigg/*http://advision.webevents.yahoo.com/hobbiesand
activitieszone/>
[http://l.yimg.com/a/i/us/yg/logo/us.gif]<http://groups.yahoo.com/;_ylc=X3oDM
TJkYjc5bHFlBF9TAzk3NDc2NTkwBGdycElkAzIxNTc3MDcEZ3Jwc3BJZAMxNzA1MDgzNDY5BHNlYw
NmdHIEc2xrA2dmcARzdGltZQMxMjc3MjIwNDgy> Switch to:
Text-Only<mailto:toeslist-t...@yahoogroups.com?subject=Change%20Delive
ry%20Format:%20Traditional>, Daily
Digest<mailto:toeslis...@yahoogroups.com?subject=Email%20Delivery:%20Dig
est>
Unsubscribe<mailto:toeslist-u...@yahoogroups.com?subject=Unsubscribe>
Terms of Use<http://docs.yahoo.com/info/terms/>
.
__,_._,___
[demime 1.01d removed an attachment of type image/gif which had a
name of ATT00001..gif]
Jay Hanson
Part Two: The Limits of Magic
The first half of this essay sketched out the unfamiliar terrain
thats beginning to open out in front of the peak oil community as
the concept of hard energy limits seeps back out into public
awareness, after thirty years of exile in the Siberia of the
imagination where our society imprisons its unwelcome truths. One
probable feature of that landscape is the rise of revitalization
movements among people in the industrial world. Last week I talked
about those movements in general terms, but its possible to explain
them a good deal more clearly by saying that revitalization movements
try to cope with drastic and unwelcome social change through ritual
action.
Ritual is poetry in the world of acts, according to the influential
Druid writer and teacher Ross Nichols; in less gnomic form, ritual
is action done for its symbolic meaning rather than its practical
value. Most social movements combine ritual with practical action
in various ways. What sets revitalization movements apart is that
they emerge when practical responses to a changing world are either
unworkable or unthinkable, and so the plan of action they offer is
entirely a matter of ritual; even those actions that have practical
aspects are done because of their symbolic power.
The wild card here is that ritual can have remarkable properties
when its applied in the right way, for the right purposes. This is
the secret of magic the art and science of causing change in
consciousness in accordance with will, to repeat Dion Fortunes
definition. If what youre trying to do depends on the choices of
conscious beings, magic works. Rosie the Riveter, whos been discussed
in these essays more than once, is an example of successful magic.
We can do it, her most famous poster said, and millions of American
women discovered that they could; housewives who had never handled
a machine tool in their lives headed off to factories to build
airplanes, tanks, and cannons at a pace that exceeded even the most
sanguine hopes of Allied planners, and flooded battlefields around
the world with a tidal wave of munitions that swept the Axis powers
into historys dumpster.
For an even more extreme example, consider the trajectory that
created the most dangerous of those same Axis powers. Not much more
than a decade before the Second World War began, Germany was a
textbook example of a failed state, an economic basket case with a
discredited political establishment, riven by internal struggles
that hovered close to the brink of civil war. Reasonable methods
applied by reasonable men had failed to do anything about these
problems. Hitler was not a reasonable man; he understood, better
than nearly anyone else at the time, the power of the nonrational
to shape human thought and action, and his response to Germanys
disintegration amounted to government by magic. Germany became one
vast ritual theater, flooded with symbols, incantations and ceremony.
Reasonable men predicted that he would be out of a job in six months;
six years later, in total control of a tautly disciplined nation
and one of the worlds most fearsome war machines, he declared war
on most of the planet, and it took another six years and total
defeat to break his grip on the German people.
Theres a rich irony that one of the few contemporaries of Hitler
who could match his understanding of the nonrational was Mohandas
K. Gandhi. Gandhi was not a reasonable man, either, but his mind
rose as far above the level of reason as Hitlers sank below it. In
many ways, the task of prying loose the jewel in the crown of the
British Empire from its overlords was a more astonishing feat than
pulling Germany out of its post-1918 death spiral, and Gandhi did
the job without any of the institutional tools Hitler relied on to
work his magic. The spectacle of the largest empire in human history
forced to submit to the gentle will of a single elderly mystic may
be taken as an example of the positive potential of magic; the
cataclysmic failure of the Twelve Year Reich show just as clearly
its potential downside.
The difference in results unfolded partly from the moral distance
between the two enchanters. Ethics are as important in magic as
sanitation is in surgery, and for the same reason; neglect either
one and you can count on things going septic. Still, there are also
differences of means and ends, and these bear directly on the theme
of this essay. In order to accomplish his purpose, Gandhi needed
only to affect the thoughts and decisions of people in Britain,
India, and any other countries that might influence one or the
other. His work, in other words, was ultimately a matter of causing
changes in consciousness, and that was something that symbolic
action could and did accomplish.
Hitler, for his part, started out working on similar lines. To bring
his vision of a triumphant Germany into reality, he had to cause
changes in the consciousness of the German people, on the one hand,
and in the minds of the leaders of other European nations on the
other, and the magical knowledge he got on the fringes of the Vienna
occult scene proved more than adequate to that task. Once he went
past those goals to pursue the fantasy of military conquest, though,
he passed out of the range of effects that could be accomplished
by changes in consciousness, and into a realm that depended on the
hard material realities of oil, steel, and geography. Once he crossed
that line he was doomed; magic can transform a failed state into a
unified nation, but it cant make a world empire in an industrial
age out of a modestly sized European state with few resources, no
petroleum, and no defensible borders.
All this is simply to say that magic, like any other tool, is very
well suited to carry out some jobs and completely useless for others.
If the troubles faced by an individual or a community are primarily
a function of consciousness, magical methods can be extraordinary
effective in dealing with them. If the troubles that have to be
faced has its roots in the world of matter, though, there are hard
limits to what magic can do. You cant use incantations and rituals,
for example, to put oil in the ground if it was never there in the
first place, or if the oil fields have already been pumped dry. You
cant even use magic to run a successful coal-to-liquids program if
the net energy of the technology youre using is too low; Hitlers
regime did its level best to accomplish that, with some of the
worlds best scientists and engineers, the substantial coal reserves
of occupied Europe, and an unrestricted supply of slave labor and
the Wehrmacht still ran out of fuel.
These examples are particularly relevant to the present, because
the movements led by Hitler and Gandhi both had plenty in common
with revitalization movements. Both emerged in response to drastic
social stresses resistant to any more practical or reasonable
approach the post-Versailles near-collapse of Germany on the one
hand, the economic and social burdens of British imperial rule over
India on the other. Both drew heavily on symbolism, incantation,
ritual, and the rest of the hardware in the magicians toolkit, and
both became mass movements characterized by the wild enthusiasm and
millenarian expectations common to revitalization movements everywhere.
The success of Gandhis project and the failure of Hitlers thus
points up, among other things, the difference between what a
revitalization movement can do and what it cant.
Thats of crucial importance just now, because the thing that most
people in the industrial world are going to want most in the very
near future is something that neither a revitalization movement nor
anything else can do. We are passing from an age of unparalleled
abundance to an age of scarcity, economic contraction, and environmental
payback. As the reality of peak oil goes mainstream and the end of
abundance becomes impossible to ignore, most people in the industrial
world will begin to flail about with rising desperation for anything
that will bring the age of abundance back. Even those who insist
they despise that age and everything it stands for have in many
cases already shown an eagerness to cling to as many of its benefits
as they themselves find appealing.
The difficulty, of course, is that the end of the age of abundance
isnt happening because of changes in consciousness; its happening
because of the laws of physics. The abundance weve all grown up
thinking as normal was there only because a handful of nations
burned their way through the Earths store of fossil carbon at
breakneck speed. Most of the fossil fuel reserves that can be gotten
cheaply and quickly have already been extracted and burnt; the dregs
that remain high-sulfur oil, tar sands, brown coal, and the like
yield less energy after whats needed to extract them is taken into
account, and impose steep ecological costs as well; renewables and
other alternative energy resources have problems of their own, and
have proved unable to take up more than a small fraction of the
slack. These limitations are not subject to change, or even to
negotiation; they define a predicament that we will all have to
live with, one way or another, for a very long time to come.
What this means is that the fundamental causes of the crisis of
modern industrial civilization are not susceptible to magic. We
cant conquer the future under the banner of abundance any more than
Hitler could conquer the world under the banner of National Socialism,
and for much the same reason:
the physical resources to win such a war simply dont exist. Now its
true that we could respond to the present crisis by changes in
consciousness, using the tools of magic among many others, but those
responses would require us to accept the end of the age of abundance
and the loss of essentially all of its benefits. Thats something
very few people today are willing to do.
This is why I mentioned earlier that revitalization movements emerge
when all practical responses to a changing world are either unworkable
or unthinkable.
Modern industrial civilization has wedged itself into just such a
situation;
those responses our political leaders and the bulk of our populations
are willing to think about are unworkable, and those responses that
might actually keep things from going haywire in fairly dramatic
ways are unthinkable. That leaves ritual as the one remaining option.
If that option could be used in the right way, to change consciousness
so that people learned how to think about the unthinkable, accept
the end of the age of abundance, recognize the huge gap between
what we currently think we need and what we actually need, and
retool their lives and expectations to fit a post-abundance world,
it could accomplish extraordinary things. The problem here is that
its not usually possible to get people to use ritual action to
achieve something they desperately dont want to achieve. Magic,
again, is the art and science of causing change in consciousness
in accordance with will; if the will isnt there, neither is the
magic.
That leaves the foredoomed but profoundly seductive attempt to make
the physical world obey the desires of the majority of industrial
humanity by means of ritual action. The Sarah Palin fans chanting
Drill, baby, drill, as though drilling a hole in the ground magically
obliged the Earth to put oil at the bottom of it, are taking tentative
steps in that direction. So are the people who insist that we can
keep on enjoying the trappings of the age of abundance if we only
support a technology, or join a movement, or adopt an ideology, or
well, the list is already long, and its going to get much longer
in the near future. My guess is that weve got a couple of years at
most before somebody puts the right ingredients together in the
right way, and the first fully fledged revitalization movement
begins attracting a mass following with its strident denunciations
of the existing order of things and its promise of a bright future
reached by what amounts to a sustained exercise in magic.
Those of my readers who have been paying attention will recognize
that this doesnt mean people will be putting on robes and funny
hats and brandishing ornate wands while intoning the names of spirits
in whose existence they dont actually believe. Just as magical
incantations in the peak oil scene these days have replaced the old
barbarous names with such words of power as hydrogen economy, algal
biodiesel, advanced petroleum recovery technology and the like, the
rituals that will be practiced by the revitalization movements to
come may take the form of community building exercises, protest
marches, outdoor festivals, and campaigns for political office.
They may even include sensible steps such as weatherstripping homes
and building solar greenhouses. What defines an act as ritual,
remember, is that its done for symbolic rather than practical
reasons; weatherstripping a house is a practical action when its
done for the practical reason of saving a few dozen dollars a year
on heat bills, but it becomes a ritual action when its done under
the conviction that steps of this nature can ward off the end of
the age of abundance.
This is why I suggested at the end of the first half of this post
that an effective counterspell against the misplaced magical thinking
at the core of the coming revitalization movements is the recognition
that there is no bright future ahead. Those words conjured up some
remarkably intense reactions among readers of this blog, and that
was exactly what they were supposed to do. The sentence needs to
be understood with a certain degree of subtlety, though. It does
not predict a future of unbroken misery, or claim that there will
be no gains to measure against the immense losses most of us will
suffer.
What it means is that the core faith of the age that is passing,
the faith that the future will be better than the past or present,
has become a delusion. In almost every sense, the future ahead of
us will be worse than the present and the recent past The vast
majority of us will be much poorer than we have been; many of us
will have to worry at least now and then about gettng enough food
to stay alive; most of us will have to do without adequate medical
care; most of us will not have the opportunity to retire; most of
us will die at least a little sooner than we otherwise would have
done. The security most of us take for granted, with police and
firefighters on call and the rule of law acknowledged even when its
not equally enforced, will in many places become a fading memory;
many areas that have been at peace for a long time will have to
cope with the ghastly realities of domestic insurgency or war.
All these things will be part of everyday life for the vast majority
of us for decades, and on the other side of it lies, not some
imagined golden age, but a temporary respite of stabilization and
partial recovery that might last for half a century at most before
the next wave of crises hits.
This is the way civilizations decline and fall. Its our bad luck
to be living at the dawn of the second great wave of decline to hit
Western civilization the first, for those who havent been keeping
track of their history, began in 1914 and ended in the early 1950s
and this wave will probably be a great deal worse than the first,
if only because it comes right after the peak of conventional
petroleum production and thus has to face a decline in net energy
per capita on top of everything else. Its comforting, and will
doubtless be common, to look for scapegoats for the troubled times
ahead, but it seems more useful to recognize that this is simply
what happens at this point on the curve of historys wheel.
Of all the reactions that the first half of this post fielded,
though, the ones that interested me most were those that suggested
that having a bright future to reach for is the only thing that
gives meaning to life. Fortunately, this isnt even remotely true.
Nearly all of our ancestors lived in times when there was no bright
future on the horizon; nearly all of our descendants will experience
the same thing. The great majority of the former and, no doubt, of
the latter as well, found other reasons for living. Thats an equally
viable option right now, given a willingness to think the unthinkable,
recognize that the age of abundance is ending, and consider the
possibility that doing the right thing in a time of crisis, no
matter how uncomfortable or challenging the right thing might be,
may be a more potent source of meaning than waiting for magic to
make a bright future arrive.
__._,_.___ Reply to
sender<mailto:jayh...@hawaii.rr.com?subject=This%20piece%20could%20be%20nam
ed%20"limits%20of%20economics"> | Reply to
group<mailto:toes...@yahoogroups.com?subject=This%20piece%20could%20be%20nam
ed%20"limits%20of%20economics"> | Reply via web
post<http://groups.yahoo.com/group/toeslist/post;_ylc=X3oDMTJxNzJwNmVsBF9TAzk
3MzU5NzE0BGdycElkAzIxNTc3MDcEZ3Jwc3BJZAMxNzA1MDgzNDY5BG1zZ0lkAzIwNTMwBHNlYwNm
dHIEc2xrA3JwbHkEc3RpbWUDMTI3NzIzMTgyNA--?act=reply&messageNum=20530>
| Start a New
Topic<http://groups.yahoo.com/group/toeslist/post;_ylc=X3oDMTJlODVoOGFsBF9TAz
k3MzU5NzE0BGdycElkAzIxNTc3MDcEZ3Jwc3BJZAMxNzA1MDgzNDY5BHNlYwNmdHIEc2xrA250cGM
Ec3RpbWUDMTI3NzIzMTgyNA--> Messages in this
topic<http://groups.yahoo.com/group/toeslist/message/20529;_ylc=X3oDMTM2dG8wc
Ww4BF9TAzk3MzU5NzE0BGdycElkAzIxNTc3MDcEZ3Jwc3BJZAMxNzA1MDgzNDY5BG1zZ0lkAzIwNT
MwBHNlYwNmdHIEc2xrA3Z0cGMEc3RpbWUDMTI3NzIzMTgyNAR0cGNJZAMyMDUyOQ-->
(2) Recent Activity:
Visit Your
Group<http://groups.yahoo.com/group/toeslist;_ylc=X3oDMTJla2lqZzkwBF9TAzk3MzU
5NzE0BGdycElkAzIxNTc3MDcEZ3Jwc3BJZAMxNzA1MDgzNDY5BHNlYwN2dGwEc2xrA3ZnaHAEc3Rp
bWUDMTI3NzIzMTgyNA--> MARKETPLACE
Stay on top of your group activity without leaving the page you're
on - Get the Yahoo! Toolbar
now.<http://us.ard.yahoo.com/SIG=15ocil5sk/M=493064.13983314.14041046.1329843
0/D=groups/S=1705083469:MKP1/Y=YAHOO/EXP=1277239024/L=27a2b576-7e2d-11df-b7ee
-6fc5e984bb05/B=1JnzBWKJiUg-/J=1277231824837493/K=Li2pjnrTSzyBfQRH8PSOZg/A=60
60255/R=0/SIG=1194m4keh/*http://us.toolbar.yahoo.com/?.cpdl=grpj>
________________________________
Get great advice about dogs and cats. Visit the Dog & Cat Answers
Center.<http://us.ard.yahoo.com/SIG=15ovu0kc1/M=493064.13814537.14041040.1083
5568/D=groups/S=1705083469:MKP1/Y=YAHOO/EXP=1277239024/L=27a2b576-7e2d-11df-b
7ee-6fc5e984bb05/B=1ZnzBWKJiUg-/J=1277231824837493/K=Li2pjnrTSzyBfQRH8PSOZg/A
=6078812/R=0/SIG=114ae4ln1/*http://dogandcatanswers.yahoo.com/>
________________________________
Get real-time World Cup coverage on the Yahoo! Toolbar. Download
now to win a signed team
jersey!<http://us.ard.yahoo.com/SIG=15okq8eku/M=493064.14012770.13963757.1329
8430/D=groups/S=1705083469:MKP1/Y=YAHOO/EXP=1277239024/L=27a2b576-7e2d-11df-b
7ee-6fc5e984bb05/B=1pnzBWKJiUg-/J=1277231824837493/K=Li2pjnrTSzyBfQRH8PSOZg/A
=6093983/R=0/*http://us.lrd.yahoo.com/_ylc=X3oDMTFnaW51Y3EyBHRtX2RtZWNoA1RleH
QgTGluawR0bV9sbmsDVTExMjc3MDUEdG1fbmV0A1lhaG9vIQ--/SIG=1219e5kan/**http%3A//t
oolbar.yahoo.com/tour%3Ftab=wc%26.intl=us%26.cpdl=wc>
TJkZnRuYjl1BF9TAzk3NDc2NTkwBGdycElkAzIxNTc3MDcEZ3Jwc3BJZAMxNzA1MDgzNDY5BHNlYw
NmdHIEc2xrA2dmcARzdGltZQMxMjc3MjMxODI0> Switch to: