They didn't mention fiscal drought. Perhaps it's implicit. I guess that would be a sea of red ink over the whole country except for K Street and Wall Street... 8/15/12
FWIW, I spend time between Silicon Valley and Lake Tahoe. The very dry winter was expected to bring drought conditions and extraordinary forrest fire conditions. Dear old AllState even cancelled our household insurance in anticipation of our ski cabin being a "wild fire" risk ... so nice of them to take ten years of policy coverage and then skedaddle at the prospect of actual risk. Champions. Anyhoot, seeing local conditions, I would not use the word drought. Rivers are flowing, rain is ... um ... precipitating ... I think there's a good "business" in being in that red shaded area and getting government subsidies for growing corn or whatever. Whether it means there really will be crop or primary production effects, I don't think this is the year to anticipate market conditions. Ironically, the last "drought" (wheat) was just market manipulation by Russia as they stockpiled to force prices. I wonder if this FSA map is from their scientific and technical people or from their marketing department. I was listening to Larry Williams (of trading fame for things like Williams AD) and he goes to the trouble of driving through the green belt and he reported seeing not the drought stricken wasteland others had reported (I didn't buy his report, so I don't know the details of his reportage.) I'm not into fundamentals in such intrinsic terms in any case. I really like Bernstein's seasonality for grains, live cattle and so on -- prices make more sense to me than corn as high as an elephant's eye. : ) 8/15/12
Adam Green
