London (business.timesonline.co.uk) - "THE world is only ten weeks away from running out of wheat supplies after stocks fell to their lowest levels for 50 years.

      The crisis has pushed prices to an all-time high and could lead to further hikes in the price of bread, beer, biscuits and other basic foods.

      It could also exacerbate serious food shortages in developing countries especially in Africa.

      The crisis comes after two successive years of disastrous wheat harvests, which saw production fall from 624m to 600m tonnes, according to the United Nations’ Food and Agriculture Organisation (FAO).

      Experts blame climate change as heatwaves caused a slump in harvests last year in eastern Europe, Canada, Morocco and Australia, all big wheat producers.

      Booming populations and a switch to a meat-rich diet in the developing world also mean that about 110m tons of the world’s annual wheat crop is being diverted to feed livestock.

      Short term pressures have compounded the problem. Speculative buying by investors gambling on further price rises has further pushed up prices.

      Though shortages are often blamed on the use of land for biofuel crops, the main biofuel cereal crop is maize, not wheat. Farmers have brought millions of acres of fallow land into production and the FAO predicts that the shortages could be eliminated within 12 months..."

      New York {BBC) - "The price of a barrel of oil has hit a record high of $102.59 in New York because of strong demand and the further weakening of the dollar.

      The price of a barrel of sweet crude finished the normal trading period up 3% and continued to rise towards almost $103 in after-hours trading.

      The falling value of the US currency and the prospect of lower interest rates pushed up the oil price.

      Crude prices are very close to the inflation-adjusted high set in 1980.

      The International Energy Agency said the price of a barrel of oil peaked at $102.53 in April 1980, after taking account of inflation..."


More:

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      NEW YORK (AP) - "No good news today on the economic front. Consumer confidence plunged, the wholesale inflation rate soared, the number of homes being foreclosed jumped, home prices fell sharply and a report predicts big increases in health care costs.

      Consumer confidence weakened significantly as Americans worry about less-favorable business conditions and job prospects. The New York-based Conference Board says in a report released on Tuesday that its Consumer Confidence Index plunged in February to 75.0 from a revised 87.3 in January.

      The reading — the lowest since the index registered 64.8 in February 2003 — is far below the 83.0 analysts expected.

      The index measures how consumers feel now about the economy. It has been weakening since July, suggesting that wary consumers may retrench financially, which could fatigue the economy further.

      Inflation at the wholesale level soared in January, pushed higher by rising costs for food, energy and medicine. The monthly increase carried the annual inflation rate to its fastest jump in a quarter century.

      The Labor Department said Tuesday that wholesale prices rose 1 percent last month, more than double the 0.4 percent increase that economists had been expecting.

      The January surge left wholesale prices rising by 7.5 percent over the past 12 months, the fastest pace in more than 26 years, since prices had risen at a 7.5 percent pace in the 12 months ending in October 1981.

      The number of homes facing foreclosure jumped 57 percent in January compared to a year ago, with lenders increasingly forced to take possession of homes they couldn't unload at auctions, a mortgage research firm said Monday.

      Nationwide, some 233,001 homes received at least one notice from lenders last month related to overdue payments, compared with 148,425 a year earlier, according to Irvine, Calif.-based RealtyTrac Inc. Nearly half of the total involved first-time default notices.

      The worsening situation came despite ongoing efforts by lenders to help borrowers manage their payments by modifying loan terms, working out long-term repayment plans and other actions..."

      CONCORD, N.H. - "Another snowstorm swept across New England on Wednesday, toppling seasonal snowfall records and dumping so much heavy snow on buildings that some collapsed under the weight.

      An unoccupied summer pizza shop collapsed at Weirs Beach in Laconia, after the roof sagged about halfway into the two-story building and bowed the walls out, officials said.

      On Tuesday, several people had to flee as the roof fell in at the Over Easy Cafe in Ossipee, N.H.

      The dangerous snow load has kept roofing contractors and homeowners been busy.

      "People can't keep up with the snow. They think it's going to stop, but it's just not stopping," said Shawn Greenwood, owner of Greenwood Construction, in St. Johnsbury, Vt.

      "I've been roofing for 20 years and this is the worst I've ever seen," he said. "I was shoveling a roof off one day two weeks ago and the house next door caved in.".."

      NEW YORK (Financialpost.com) -- "Economists are no longer talking about a U.S. recession but a deep recession after figures yesterday showed business sentiment continued to plummet in early February.

      Forecasts for a more severe retreat came as CIBC World Markets forecast U.S. house prices would end up sliding 20% before the dust has settled on the American housing meltdown. CIBC estimated 50% of U.S. homeowners who took out below-prime mortgages in 2006 will end up in a negative-equity position -- owing more than their house is worth.

      "There seems to be a sense of a very deep-seated collapse in the economy," said Michael Englund, chief economist at Action Economics.

      The Philadelphia Federal Reserve's index of manufacturing activity in the U.S. Northeast dropped to -24.0 in February from January's already terrible reading of -20.9. Analysts had been expecting a bounce to about -10 after that sharp drop in January.

      "As far as this indicator is concerned, a recession, and a severe one at that, is already underway," said Paul Ash-worth, of Capital Economics.

      "The headline index is now consistent with a deep recession, if sustained at this level," said Ian Shepherdson, chief economist at High Frequency Economics, in a note.

      The index is based on a survey of manufacturing firms by the Federal Reserve Bank of Philadelphia and their plans for general activity, shipments, new orders, employment and hours worked. It is one of the earliest monthly readings on the U.S. economy and has had a solid track record at predicting national manufacturing and future trends in actual output.

      The collapse in the outlook for activity six months out was particularly worrisome, Merrill Lynch said. It posted the steepest decline in the 40-year history of this report, suggesting the United States is facing a recession on par with the early 1990s' downturn rather than the milder 2001 contraction..."

      NEW YORK (Fortune) -- "Another winter writedown storm hit Wall Street Monday. Shares in Citi, Fannie Mae and Freddie Mac sank after analysts predicted another round of multibillion-dollar losses at the struggling financial firms.

      The expected writedowns, which reflect rising loan defaults and sharp declines in indexes tracking debt-related securities, come as falling house prices and a slow economy weigh on U.S. consumers. Shares in Citi (C, Fortune 500) dropped 2% after Oppenheimer analyst Meredith Whitney slashed her full-year earnings forecast to 75 cents a share from $2.70 previously.

      Whitney, who made headlines late last year by being the first analyst to predict Citi would cut its dividend - which it soon did - said the bank's profits will be hammered by Citi's need to reduce the value of loans and bonds on its balance sheet. The analyst, who rates the stock the equivalent of sell, predicts "further writedowns to their carrying values of [collateralized debt obligations] related to sub-prime mortgages, further writedowns from leverage lending commitments, and further writedowns associated with on balance sheet consumer loans."

      That's a lot of writedowns, but Citi isn't alone in facing big hits to its earnings. Goldman Sachs downgraded Fannie (FNM) and Freddie (FRE, Fortune 500) to sell from neutral, saying it expects $4.2 billion of writedowns at Freddie and $2.6 billion worth at Fannie when the government-sponsored enterprises report fourth-quarter earnings this week. The downgrade comes on the heels of a similar move Friday by analysts at Merrill Lynch. Goldman even recommended that investors short Freddie Mac shares ahead of Thursday morning's expected earnings release. And it also significantly reduced earnings predictions for other Wall Street giants, including Bear Stearns, Morgan Stanley, Merrill Lynch and Lehman Brothers..."

      Washington D.C. - (washingtonpost.com) -  "It doesn't look like an old-fashioned bank run because it involves the biggest financial institutions trading paper assets so complicated that even top executives don't fully understand the transactions. But that's what it is -- a spreading fear among financial institutions that their brethren can't be trusted to honor their obligations.

      Frightened financiers are pulling back from credit markets -- going on strike, if you will -- to escape the unraveling daisy chain of securitized assets and promissory notes that binds the global financial system. As each financier tries to protect against the next one's mistakes, the whole system begins to sag. That's what we're seeing now, as credit market troubles spread from bundles of subprime residential mortgages to bundles of other kinds of debt -- from student loans to retailers' receivables to municipal bonds.

      Investors are nervous because they aren't sure how to value these bundles of securitized assets. So buyers stay away, prices fall further, and the damage spreads.

      The public, fortunately, doesn't understand how bad the situation is. If it did, we might have a real panic on our hands. And there would be more pressure for bad policies -- ones that try to freeze the damage, rather than letting prices fall to levels where buyers will return and the markets will clear. Hillary Clinton's proposed moratorium on home foreclosures, in that respect, is one of the truly bad ideas of our time. It would make the situation worse by increasing even more the illiquidity and inflexibility of the housing market..."

      Canada - (edmontonsun.com) -  "A worldwide shortage of wheat means shoppers will soon be shelling out more dough for a loaf of bread.

      "Within a week, our prices will increase by about 30%," said Hilton Dinner, who owns west Edmonton's popular Bon Ton Bakery. "And I think the whole baking industry is in the same boat."

      The price of flour has risen by 100% to 150% in the last seven or eight months, said Dinner, adding that he's never seen such a leap in his 19 years in the baking industry.

      "Prices creep up seasonably. They might go up 10%, then down 5%. They never go back to where they started, but they creep. This is not creeping, this is drastic," he said.

      The wheat shortage is being driven in part by a two-year drought in Australia that has diminished yields.

      The biofuel movement is also being blamed, as grain farmers switch from wheat to corn - the main crop used for ethanol.

      "It's not something that's going to go away," said Dinner. "Food in general is going to go up. As wheat goes up, so does the price of eggs and chicken because they eat grain-based feed.

       "It affects people who can't afford to pay more for their food.".."

      United States - (worldnetdailty.com) -  "In a ceremony that received virtually no attention in the American media, the United States and Canada signed a military agreement Feb. 14 allowing the armed forces from one nation to support the armed forces of the other nation during a domestic civil emergency, even one that does not involve a cross-border crisis.

      The agreement, defined as a Civil Assistance Plan, was not submitted to Congress for approval, nor did Congress pass any law or treaty specifically authorizing this military agreement to combine the operations of the armed forces of the United States and Canada in the event of a wide range of domestic civil disturbances ranging from violent storms, to health epidemics, to civil riots or terrorist attacks.

      In Canada, the agreement paving the way for the militaries of the U.S. and Canada to cross each other's borders to fight domestic emergencies was not announced either by the Harper government or the Canadian military, prompting sharp protest.

      "It's kind of a trend when it comes to issues of Canada-U.S. relations and contentious issues like military integration," Stuart Trew, a researcher with the Council of Canadians told the Canwest News Service.  "We see that this government is reluctant to disclose information to Canadians that is readily available on American and Mexican websites."

      The military Civil Assistance Plan can be seen as a further incremental step being taken toward creating a North American armed forces available to be deployed in domestic North American emergency situations.

      The agreement was signed at U.S. Army North headquarters, Fort Sam Houston, Texas, by U.S. Air Force Gen. Gene Renuart, commander of NORAD and U.S. Northern Command, or USNORTHCOM, and by Canadian Air Force Lt. Gen. Marc Dumais, commander of Canada Command.

      "This document is a unique, bilateral military plan to align our respective national military plans to respond quickly to the other nation's requests for military support of civil authorities," Renuart said in a statement published on the USNORTHCOM website..."