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Yeats Signals
Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
-William Butler Yeats, The Second Coming
Setting aside its religious imagery, the opening stanza of The Second Coming remains one of my favorite go-to sources for "uh oh" language in my writing.
In conversation at IFTF this morning, a reference to a profound oddity in crop markets led to the coining of the phrase "Yeats Signals," a play on the IFTF term "weak signals" (referring to subtle indicators of big changes). The profound oddity is this:
Whatever the reason, the price for a bushel of grain set in the derivatives markets has been substantially higher than the simultaneous price in the cash market.When that happens, no one can be exactly sure which is the accurate price in these crucial commodity markets, an uncertainty that can influence food prices and production decisions around the world. [...]
Market regulators say they have ruled out deliberate market manipulation. But they, too, are baffled. The Commodity Futures Trading Commission, which regulates the exchanges where these grain derivatives trade, has scheduled a forum on April 22 where market participants will discuss these anomalies and other pressure points arising in the agricultural markets.
This simply should not be happening, and yet it is. As an indicator of major instabilities in what had been structurally stable (if not always predictable) markets, it's a big one. Big enough that it wouldn't take much to imagine this as a sign of a major financial crisis in the global food market -- something with profound economic and health implications for everyone, including the rich countries.
It seems to me that we've been seeing more than our fair share of Yeats Signals lately.
Comments
I'm really glad that you pointed this out, and I think that you are right on the money.
The British Newspaper The Independent is already declaring this "The Great Depression" based on the high numbers of U.S. citizens currently collecting food stamps. This doesn't seem too far fetched, since there are a lot of things that look eerily similar to 1929: highly-leveraged equity, bank failures and a run-up in consumer spending.
It seems like all around we are seeing signals of foreboding things to come...
Posted by: Steve Puma | April 1, 2008 9:51 AM
Has this anything to do with a new strain of rust fungus (which has been spreading faster than expected)?
Posted by: Tony Fisk | April 1, 2008 3:50 PM
Couldn't this just be a side effect of the rapidly rising cost of food? Won't it stabilize in time? Why does it have to be "a sign of a major financial crisis in the global food market"? Would an economist say this? (Feel free to answer Y/N or not at all, I'm just tossing this out in case anyone has further insight.)
I find the idea of "weak signals" interesting, but I'm skeptical about it. It seems too easy to twist into predictions one wanted to make all along. Say there are 1,000 weak signals. 950 of them are meaningless, only 50 foreshadow something significant. Without an empirically tested way of telling their predictive validity apart, it's incredibly difficult to use them for predicting the future. (Maybe IFTF does have a way, I just don't know it.)
Posted by: Michael Anissimov | April 1, 2008 7:36 PM
More and more, basic necessities like food and water are becoming news because of higher prices and shortages. I expect this summer is going to be very difficult on a number of levels - gas shortages, high food prices, and water shortages in the Western US, Southern US, just as there currently is around Barcelona, Spain.
Nobody's paying attention but Tajikistan has been going through their own hell with an energy crisis throughout the winter and now a food crisis on top of that.
Those of us who are interested in sustainability should be shifting into survival mode. Do you have an escape plan?
Posted by: gmoke | April 1, 2008 7:41 PM
Escape plan? Survival mode?
Oh, please. That's loser talk. That's how you lose any chance of changing things for the better.
Don't escape. Engage.
Posted by: Stefan Jones | April 1, 2008 9:26 PM
I'm surprised to see gmoke talking about escape plans, since he's long been on the forefront of smart home/individual sustainability strategies.
Michael, my sense of alarm about the price deviations comes from the opinions of the economists and market analysts in the article (and in blogs pointing to the article).
As for weak signals, bear in mind that IFTF doesn't do predictions, they do "forecasts" -- intrinsically fuzzier.
Posted by: Jamais Cascio | April 2, 2008 11:02 AM
My father models the commodities markets for a living. What he has said-- and I've not heard anything to the contrary-- is that major market players are getting very nervous about holding wealth in the form of money, so they're hedging by buying things that might hold their value in various scenarios.
The commodities markets are just one of the places this is showing up. Massive amounts of money, looking for somewhere safer than the traditionally-safe-but-recently-scary currency-related markets.
They're also new players in these markets, and as such tend to be dumb money. They're losing massive amounts of capital. But I suppose they're achieving their goal of being hedged.
Posted by: Mike Johnson | April 2, 2008 12:10 PM
I say Solar IS Civil Defense and part of civil defense is to have an escape plan. That's not giving up. That's planning. Once you have a plan you should feel more secure and that will allow you to work more effectively to change the things we can now to avoid the disaster(s) that are on the horizon.
Don't think that I'm giving up and bugging out. I'm not depressed. I'm pissed.
Monday - Peak Oil meeting at MA State House
Tuesday - Ira Flatow speaking on global warming and the media
Wednesday - Joe Stiglitz on the $3 trillion war
Cmon, folks, this is Boy Scouts stuff - be prepared!
Posted by: gmoke | April 2, 2008 5:07 PM
So, putting Mike and gmoke's points together, it may be time to invest in a home solar power system?
Posted by: Tony Fisk | April 2, 2008 10:56 PM
Weak signals are one of those things that are linkely common, but probably only discernable with accuracy to historians.
Posted by: Howard Berkey | April 3, 2008 6:42 AM