4% sounds a little low, but I really don't know. I'm know a significant chunk of the population was involved in farming. 30% sounds reasonable. When you pass over the Kansas border today, a billboard tells you one Kansas farmer feeds 120(?) I can't remember the exact number, but it's big.
I saw someone complaining on a board that we are in a depression. An oldtimer responded that this is no depression (yet); a depression is when you go dig up dandelions in your front yard for food.
This is no depression. If the government figures are true, we aren't even in a recession. That doesn't mean all the hanky panky going on is harmless. What's been going on is no less than a con game that's now coming undone. This could be big trouble. But I'm hoping not.
I hear dandelions are best served with a light olive oil vinegret. :)
Among the day's most noteworthy rumor was that the Federal Reserve was convening an "emergency meeting" to deal with the market's meltdown in general and J.P. Morgan's derivatives exposure specifically.
A spokesman for the Fed did not return phone calls seeking comment (not that I expect it would have commented, anyway). Late Tuesday, Adam Castellani, a J.P. Morgan spokesman, called and said the rumors were "completely untrue and irresponsible."
At the end of 2002's first quarter, the notional value of derivatives contracts involving U.S. commercial banks and trust companies was $45.9 trillion, according to the Office of the Comptroller of the Currency's bank derivatives report.
The OCC noted seven commercial banks accounted for almost 96% of the total notional amount of those derivative contracts, which are complex financial instruments that are used to hedge risk against and/or increase leverage to movements in various financial assets. J.P. Morgan Chase is far and away the most active participant in the derivatives market, with involvement in $23.2 trillion, or 50.5% of the total. ("Notional value" is the total value of the contract, and J.P. Morgan's direct exposure to those derivatives was $51 billion as of Dec. 31, or less than 1% of the notional value, according to the firm. About 80% of the company's exposure was with investment-grade counterparties.)
For some time now, years literally, the hard-core bears have been talking about a "sum of all fears" scenario involving J.P. Morgan's exposure to derivatives in general, and bearish bets on gold in particular.
Today, the price of gold fell 3.4% to $312.60 per ounce, its lowest close since July 8, while the dollar rallied sharply vs. the euro, which fell below parity to 98.62 cents vs. yesterday's close of $1.0080. The dollar also rallied against the yen, and the dollar index rose 1.95 to 107.08.
Given the greenback has recently been moving in the same direction as equities (i.e., down), while gold has been trading inversely (although more sideways-to-down of late), today's movements were somewhat curious.
Indeed, a person given to conspiracy theories might surmise the Fed did convene a meeting today and decided to intervene to boost the dollar and weaken gold in order to help alleviate pressure on money-center banks, such as J.P. Morgan and Citigroup.
From thestreet.com