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Grain shipments stalled in credit drought
The credit crisis is spilling over into the grain industry as international buyers find themselves unable to come up with payment, forcing sellers to shoulder often substantial losses.

Before cargoes can be loaded at port, buyers typically must produce proof they are good for the money. But more deals are falling through as sellers decide they don't trust the financial institution named in the buyer's letter of credit, analysts said.

"There's all kinds of stuff stacked up on docks right now that can't be shipped because people can't get letters of credit," said Bill Gary, president of Commodity Information Systems in Oklahoma City. "The problem is not demand, and it's not supply because we have plenty of supply. It's finding anyone who can come up with the credit to buy."

So far the problem is mostly being felt in U.S. and South American ports, but observers say it is only a matter of time before it hits Canada.

"We've got a nightmare in front of us and a lot of people are concerned it's going to get a lot worse," said Anthony Temple, a grain marketing expert based in Vancouver.

Hat tip to Zandar1 on BT

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet

by Melanchthon on Fri Oct 10th, 2008 at 02:39:05 PM EST
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FT.com / In depth - Financial system close to collapse, UK warns
UK authorities insisted on Friday that action, not words, was needed from this weekend's meeting of the group of seven leading economies if there was to be any hope of saving the world financial system from collapse.

As financial markets stared at the abyss, the UK delegation to the meeting sought to raise the stakes in an effort to avoid a mere agreement on a set of broad principles.

Describing a world in which wholesale money markets were now refusing to lend to banks, even overnight, the UK authorities warned that the world was on the edge of a collapse of the financial system.

The UK does not believe that every country should follow its specific proposals, but they are insisting that all of them must announce measures to demonstrate that they agree on the provision of unlimited liquidity; a plan to strengthen financial institutions, including a huge recapitalisation of banks; and emergency measures for wholesale money markets, which Mr Darling said would "enable banks to start lending to each other".

There were indications on Friday that Germany was taking steps in this direction, after the Die Welt newspaper reported that Berlin was working on a UK-style rescue plan for its financial sector which could involve guarantees of more than €100bn ($137.2bn) and a large capital injection.

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Fri Oct 10th, 2008 at 02:46:17 PM EST
[ Parent ]
Nationalisation, American style | Bloomberg | 10 Oct 2008

Under the equity purchase program, the Treasury would not be involved in bank management, Paulson said. Equity purchases would take place alongside Treasury's coming program of "broad" mortgage asset purchases, he [Paulson] said. ...

Asked about how newly approved funds would be divided between the mortgage-asset and bank equity purchases, Paulson declined to offer specifics.

"Any equity the government purchases through a broadly available equity program would be on a non-voting basis, except with respect to the market-standard terms to protect our rights as investors," Paulson said.

A Prisoner's Dilemma | Kucinich | 5 Oct 2008

Instead of Democrats going back to classic New Deal economics where we prime the pump of the economy and start money circulating among the population through saving homes, creating jobs and building a new infrastructure, our leaders chose to accelerate the wealth of the nation upwards. They did so in a way that was destructive of free-market principles. They ripped away all the familiar moorings. We are in an uncharted sea where the traditional roles of the political parties are being switched. The Democrats have unfortunately become so enamored and beholden to Wall Street that we are not functioning to defend the economic interest of the broad base of the American people. It was up to the Republicans to protect not just a so-called free market but the American taxpayer and attempt to block this. This is an outrage. This was democracy's Black Friday. ...

We had two take-it-or-leave-it propositions and the second one was worse than the first ...Tax cuts are antithetical to a bailout. We never solved the problem. There were never any hearings on the bill. This premise, that we could prop up the stock market with a $700-billion investment and create some liquidity, was flawed. The problem is that banks do not want to loan to each other. It is not a liquidity problem. Banks are afraid they are going to collapse in short selling. There is a war going on between security firms and banks. Banks are under assault. They are not loaning. The dynamic is driven by the Accounting Standards Board, the Securities and Exchange Commission and the Fed.

A Redemption Song to whistle while you vote.

Diversity is the key to economic and political evolution.

by Cat on Fri Oct 10th, 2008 at 09:37:00 PM EST
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everything is going as planned by/for the ultra-wealthy.

Next, rumors of food shortages, hoarding, and food riots.  Let the poor/middle class kill themselves off while the wealthy put their feet up, sip 30 year old single malt, and chuckle.

We could have changed things since Reagan and CHOSE not to.  Time to reap our rewards.

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Sat Oct 11th, 2008 at 08:59:19 AM EST
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This is where the global crisis gets real.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Sat Oct 11th, 2008 at 02:42:56 PM EST
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