Supplemented from yesterday......

General Motors Downshifts Toward Default Drive or bankruptcy boulevard headlines Bloomberg in a dreary warning to all. They are on the hook for billions from companies they backed that are going bankrupt, the bond agencies are about to lower their rating again, and nobody wants their SUVs. In a surprise, the usually sad sack Chrysler (Diamler Chrysler) is starting to do a lot better. Chrysler Group, a Detroit automaker accustomed to near-death experiences, is managing to avoid the pain of its two larger Detroit-based rivals. Their stock is up and investment firms have put them on their buy lists. Overall this is very bad news for the economy because if GM goes, it will mean a million jobs at least.

Things are OK on the Mississippi, the grains can go all the way to port, a fact that has helped to cause a near collapse in the prices of beans and corn. This will mean lower meat prices pretty soon since both products are animal feed not human food (corn is not the sweet corn that we eat). This will mean that one inflation index, the CRB, will be moving down a little from record highs. All the meats are near all time highs right now---as anyone who shops for beef or pork knows---but relief is at hand. We won't feel it in the stores for at least a couple of months. As cattle herds are rebuilt, keep in mind that the cycle for cattle---screwing, having a calf, having it grow and breed again, etc.----is seven years; Hogs---those fuckers have litters of at least eight twice per year, easy to rebuild stock. Right now some meat contracts are at ALL TIME HIGHS and trending higher; keep in mind that there are now commodity FUNDS (like mutual funds) in these markets and when they bail out, because they all use the same chart signals, markets collapse; funds are now a disproportionate share of futures markets..

For those of you interested, go HERE, for a terrific piece on the outlook for energy based on technical analysis of the market. Scroll half way down to "liquid energy." This is a proprietary site but you can order their stuff.