for the large commodity importers especially with the commodity price this is especially about india he says maybe only 5% were 6%. he is quite right to put them on the political scene many things have gone wrong at the same time. but there is a great recession. but now you have flipped. when those fundamentals are created i don't think they can. with at demographic period the problem of population explosion. you say you have the expanding work force but the population growth it will rise slowly than decline and then looking at those 300 million. there actually members of the work force the guardians of the west coast people not to in the work force. the chinese did doing better. would get 60 or 70 with the collapse why does this happen? of the working-class people send the women out. and education? fortunately the demographic show women get to more educated then that is the end of the work force macy major benefit coming in the form of democracy at -- tomography where is the subject of responsibility. india it is not the only a poor country so we have the ketchup possibility if many

[inaudible] commodity prices? i think he is right. there's been a huge boom everything kept going up fiveover six times. [inaudible] the reason i thing he's wrong what we are today is in an attention to the environment and environment [inaudible] which is never been in history before. everybody wanted do this. you all kind of areas with the oil. we have the united states which is banned all drills on the east coast and the west coast. there are only three states in the country that allow drilling at offshore which is texas, louisiana, everybody else is forbade. we have a large gas perspective. [inaudible] okay. oil is -- [inaudible] gas prospects -- [inaudible] incredible reaction. yeah. how do you know you -- [inaudible] for the first time in history a striking oil has been a disaster. every other kind of mining. [inaudible] india has the third largest oil reserves in the world. because of problems with the -- [inaudible] india has become one of the biggest imports of coal. i had to write a column saying something about it. a massive

we think it's the commodity itself.: okay, i'm loving how you explain this to our viewers because it is boots on the ground, you're not leaning on government numbers which i think is great. >> we always watch them. liz: okay. so you believe you've eyeballed corn, you've gotten into these cornfields. what else looks like it's going to be very expensive going forward? >> well, we think the whole food sector is on the uprise, and we don't think this is just inflation or speculation. we think we're going through a repricing of commodities, and it's a natural aftereffect of three decades of paper, stocks and bond outperformance. now we're just shifting into the productivity gains that we saw in the paper market, and inelasticity coming into the feed, food, agriculture markets and commodities as we meet up with increasing demand due to emerging markets, population moving up the food chain and supply shocks at the same time. it's a perfect storm, and it's here to stay. ashley: that's a great line right there. you don't like al

some of them have served commodities claims. those kind of issues have to be resolved and i have to keep reserved so i don't discriminate if it turns out those claims are that come away sufficient money do that. so that is the biggest problem at present. as we collect additional fun, segregated funds or whatever, would move as quickly as we can with the court. we will distribute additional funds they collect it from the cme and will make distributions as quickly as we can. so i see this is going on a sort of a serial process. the litigation with the u.k. administrators over 700 million come in that case is being published before the courts. they're put in their initial position on not. the u.k. administrators position is that these funds are not segregated under u.k. law and they are unsecure general assets for his restoration. these are 30.7 funds that the firm on the u.k. part of the firm agreed and so should be segregated. our position -- are responding position on that case will be filed in september. there will be discovery

following the deregulation or commodity markets in the year two thousand those are the two factors. the corn to ethanol conversion has given rise to a rabbit but smooth increase in prices starting in about two thousand and six. and the speculation has given rise to shore peaks in two thousand and seven eight in two thousand and eleven and that's the analysis that we did in that all right so professor talk about the deregulation of the year two thousand so you are referring i would take it to the commodity futures modernization act this act of course which came at the very tail end of the clinton ministration essentially legalized portions of the financial transactional ised economy that previously had been classified as pure gambling now i want to the also mention the word supply and demand there and typically supply and demand are drivers in any economy they have buyers and sellers and they meet in the market and a price is mitchell excepted but we're entering post two thousand but really building for a couple of decades there an economy that's really more systems oriented and requ

a lot of it is due to commodity speculation rather than through the drought itself but either way the food prices are going to increase and and that's going to put us even higher than the previous two peaks and the danger zone surely of widespread revolution and our projections are that this isn't going to take much time a few weeks to a few months is all that. it will take to be over the threshold and then the question becomes on the response side how do countries over there. that there are citizens of the poor from the stress of the food prices what happens and everywhere in the world now depend upon how we react. there are big policy options which if you would look like i can tell you about but there are also of course country based options in terms of the interventions that it takes to protect us from the rising all right professor nearby yeah i'm founding president of the new england complex systems institute rata time but thanks so much for being on the kaiser report pleasure thank you ok and that's going to do it for this edition of the kaiser report with me max kaiser and stac

david: mark, let's talk specifically commodities. with corn up and a hurricane coming on the coast, maybe is now the time to start talking seriously about getting rid of ethanol, that ethanol requirement in gasoline? >> i think it makes a lot of sense. you know, the cme -- report from iowa state saying you could drop corn price as little over 7% if you drop the ethanol requirement and i don't think the ethanol requirement is really lowering gas prices by any means, especially if corn starts to threaten 9 bucks which is entirely possible. so i think that a lot could be done by at least really easing some of those requirements, that that would be great for the american consumer. it would be okay for the farmers because they are still getting great prices. maybe the small loser there would be archer-daniels-midland but there's always to be a loser when something like that happens. i think it makes a ton of sense. tracy: you know who else loses though mark? the consumer; right? you've got grain prices up. you've got gas prices up. beef p

the commodities futures trading commission has filed a complaint against peregrine financial group or p.f.g. and its owner who you see there mr wasson dorf the c.r.t.c. alleges fraud by misappropriating customer funds violating customer segregation laws making false statements in financial statements does this all sound familiar we've been reporting on a lot of these same issues same themes for months in the wake of m.f. global's collapse so we'll get more into the big picture in a moment first we want to get up to speed with what customers are dealing with christopher olsen is one he's also president and c.e.o. of treasure island points and first i really appreciate you being on the show thank you so much mr olson thanks for having me on the arm absolutely so first just bring us up to speed what is your relationship to this firm and what's happened in your personal situation well we've been trading futures through p.s.u. best for nearly twenty years and we recently began trading for x. driven two cents fundamentals with them through those fundamentals division the early twenty ten we

property being to be charitable this is appropriate why the commodities burn us. such a short time we've got the first instance going on since the early. in the way there was with them o'toole so it seems like we're still pretty much the same a similar process and. speaking of that process you have been going through it with m.f. global you've been looking at all of the fine print of how that was able to happen i want to know the c.r.t.c. in january said it found no material breaches of customer fund protection requirements and a joint review of the seventy largest f c m's with the f.a.a. so this was due was included in this. how does it happen. well there's no answer for that was the f.c.c. is going to have. the simple i'm not tying a bank account to or that could have been produced at are more with the bank holding the bond underneath there that is an utter failure regulators that is absolutely incomprehensible knows the system of regulation is going to work if the regulators are incompetent so to our mind this calls for accountants sure there's been a tremendou

we are not commodities traders. second, the profits of the company, we want them going higher, not the revenues which is wildly overrated in the media. profits, very cool. profits produce higher dividends. that's what investors want. dividends are superior to the payments from bonds and earnings growth is the best predictor of higher dividends. we cannot underrate the turn in housing. as jeremy siegel told scott wapner today, 25% of the economy is directly related to housing. it can drive retail, banks because of mortgages. packaged goods because housing is new households being formed. that's been coming down. the number is reversing. these people are getting out of the in-laws house. we have side shows to detract us from the rally. today we have republican vice presidential candidate causing buzz. it has nothing to do with the price of stocks. endless distractions that are stocks. nokia. a guy will say, walking past what do you think of nokia? enough. next guy, research in motion, yahoo!. i get asked constantly. wh

the commodity got a boost. nyemex up. gold is up at 1,662. we continue to keep our eyes on south africa, platinum up again today to 1553. that's where we trade right now, in europe, what's happening with the asian markets today? >> thanks, ross. the asian markets turn positive with more easing from central banks. the shanghai composite closed a quarter%. and gold got a strong boost. in hong kong, the hang seng gained a strong 1.2%. earnings rolled out of major china banks. the nikkei climbed to a three-month high. and 1.4% after main creditors are planning to extend it. bellwether samsung electronics firmed up 8.1% on bargain hunting. and led by material and industrials, q kwan as it added lower loss. more on qantas later on in the show. back to you. >> we'll catch later. also still to come on today's program, we're going to be talking about qantas. and we'll continue our triple a week. today we head out to munich and determine how germany's retained its gold-plated rating. >>> plus, bankers have kicked off a two-day strike in protest. we'll

, commodity stocks and country that is produce commodities. you mentioned australia. the etf with australia is down almost 2% today. south africa's etf is down, russia, china, canada. any of the countries associated with commodities to the downside. generally risk off around the world and e tfs trading, for example, german stocks, japanese stocks, also down today and not as much as with the countries associated with commodities. emerging market stocks are weak, as well. seeing a down curve here and for example the emm. the major etf for emerging markets. mandy, back to you. >> thank you so much. >>> well, there's a big speech in tampa, florida, tonight at the rnc but it's a speech tomorrow that probably means more for your money. fed chairman bernanke speaking to a conference in wyoming and everybody looking for clues what he'll say. ahead of the speech, atlanta's fed president sat down with our own steve liesman to handicap the likelihood of more easing. let's welcome in steve liesman. all right, steve, you have been speaking with the movers

we're not commodities traders. second, we want to see the profits of these companies go higher, not necessarily revenues which is a wildly overrated in the media metric. the media, oh, but the revenues. no. hey, profits, very cool. profits produce higher dividends. that's what investors want. dividends are for our superior from the payments you get from owning bonds. and earnings growth is the best predictor of higher dividends. third, we cannot underrate the power of housing. as jeremy siegle told scott wapner on "the fast money halftime report," 25% to 30% of our economy is directly related to housing. it's been driving retail, banks, mortgage demand. it can even drive packaged goods as housing is a function of new households being formed. i think that number is reversing. i think people are having more kids again. or at least getting out of the inlaws' house. on any given day, we have sideshows that distract us from this prize of a rally. today as you'll hear later in the show, we have a republican vice presiden

and losses for japan's nikkei and it may not be too late to join in the commodities boom take a look at the core it's prices hit a record high on friday as the u.s. government slashed its forecast for the drought damaged crop do worst drought in more than a half a century i should add overnighted became the hottest commodity on the list but it still has a lot of. its dramatic rise is also the result of even all increasingly becoming part of the ghastly mix the second harvest is gold in july it saw the largest quarterly price drop since two thousand and eight or the bad news about the state of the global economy suggests central banks will increase stimuli read crank up the printing press and turn away on the u.s. dollar that will boost the gold as an alternative investment it's now priced well below its inflation adjusted high over around two thousand four hundred dollars an ounce of reached in one nine hundred eighty last but not least is crude arguably it's the most popular commodity and that's understandable since it's part of nearly every faucet over every day lives from fuel to

some of them have served commodities claims. those kind of issues have to be resolved and i have to keep reserved so i don't discriminate if it turns out those claims are that come away sufficient money do that. so that is the biggest problem at present. as we collect additional fun, segregated funds or whatever, would move as quickly as we can with the court. we will distribute additional funds they collect it from the cme and will make distributions as quickly as we can. so i see this is going on a sort of a serial process. the litigation with the u.k. administrators over 700 million come in that case is being published before the courts. they're put in their initial position on not. the u.k. administrators position is that these funds are not segregated under u.k. law and they are unsecure general assets for his restoration. these are 30.7 funds that the firm on the u.k. part of the firm agreed and so should be segregated. our position -- are responding position on that case will be filed in september. there will be discovery

in the past, we had some capacity to use commodity credit corp resources. congress provided appropriations -- we could not utilize those resources as has been done in the past for disaster assistance. we are very limited in terms of what we can do and we have to be as creative as possible in allocating these resources. the money will go to help purchase of forage, help move water, help reclaim some of the land that has been negatively impacted by the drought. it is obviously a small amount of money compared to the challenge that we face, but is an indication of an administration that is focused on doing everything we can. it is not simply limited to those efforts. it also involves emergency loans, lowering the interest rate -- the credit union administration is opening up opportunities. credit will help folks who are having cash flow issues get through a very tough time. >> i wonder if you could address the issue of ethanol. 40% of the corn is used to promote -- produce ethanol. a number of the trade group's -- the united nations has an article in the finan

and things like commodities raw materials are seeing record prices on fears paper money can no longer be trusted autism has the story. it's five years ago the saugus that the world will come up to the shock we now call the global financial crisis successful investing during these years proved challenging it turns out commodities namely corn gold and brant crude offered the biggest return strong double digits here compared to modest gains for the footsie and the s. and p. and losses for japan's nikkei and it may not be too late to join in the commodities boom take a look at the core it's prices hit a record high on friday as the u.s. government slashed its forecast for the drought damaged crop do worst drought in more than a half a century i should add overnighted became the hottest commodity on the list but it still has a lot of top it's dramatic rises also the result of even all increasingly becoming part of the ghastly mix the second harvest is gold in july it saw the largest quarterly price drop since two thousand and eight or the bad news about the state of the global economy sugg

oh it didn't seem to have the same impact on on commodity prices as q.e. so there are some differences but still the creation of new the quiddity was necessary to reflate our global wrapt to keep it from sinking and you're talking about two really contradictory positions which is i think what makes your view so unique so let's really delve into this because while you definitely make no apologies for the problems of this money system in the paper currency system you also say hey this is what we have we have not had capitalism for a long time arguably since i think world war two so can you explain that why you say that all right well let's think about it under capitalism say in the nineteenth century the government played very little role. well now in the united states the federal government spends twenty four percent of g.d.p. so one dollar out of four spent by the government under capitalism gold was money and the government had nothing to do with it now the fed creates money from thin air and manipulate it as a value but even more to my point i would say

financial system we'll hear from a former fraudster and the commodity customer coalition founders about how to restore the broken faith speaking of said fraudster do you remember this. it's crazy every day very big big big bucks doing crazy these crazy day sales crazy getting those prices are. what's really insane is crazy eddie was home to one of the largest securities fraud uncovered during the nineteen eighties the criminal c.f.o. who helped mastermind it said he did it for fun and for profit and if he hadn't been caught he'd still be doing it today so what does this mean bigger picture about what's going on now on wall street after bad and arguably criminal actions at firms that helped cause the financial crisis have gone largely unpunished we'll talk to the former praise yetis c.f.o. sam antara about it plus the e.c.v. disappoints today as mario draghi fails to deliver a whatever it takes plan so is this back to a crisis as usual and how is the private sector dealing well one company seems to be hoping sex not only sells but also. james people back into stains ailing real estate ma

lori: from commodities to stocks. let's check the markets. lauren simonetti on the floor of the nyse, keeping track of analyst calls. >> let's talk about calpine a power producer similar to excelon. it is big in geothermal as well as the nat-gas space. shares are up, 2%, more than to $17. they got upgrade from barclays to overweight from equal weight. price target of 21. that is news there. angie's list had a huge day yesterday, up 13%. giving some back today. angie's list down fivers and change and down 36% this year. the reason behind they got a downgrade to hold at canaccord. the analyst pushing out his profitability target for ainge gist list to -- angie's list to 2015. they will have to get more marketing to get people to the review website. nicole: lauren, thanks. up next we look overseas for profits for picks to help you take advantage of a growing middle class in emerging market. lori: profit, i'm all for that. let's look at today's winners and losers on wall street. we'll be right back after a short one. lori: approaching labor day w

and what it's doing to commodities. we'll show a special on drought, across a range of cnbc networks. >>> still to come on the show, standard chartered paid out for doing business with iran but is the settlement another slap on the wrist? we'll speak with phenomenaler fdic undersecretary. >>> welcome back to the program. let's take a look at markets. it's a cautionary environment coming out of asia this morning. the hang seng had its worst day since late july, closing down 1.2% and that's followed through into futures action. the dow jones is implied to opener by six points and one or two for s&p. not a huge side to the downside but not a supportive risk environment overnight. >> european stocks meanwhile are weaker as well. just down about 0.3%. euro stocks up near four of my month highs. >>> moving on, the old gray leader has a new leader, "new york times" is turning to former bbc director mark thompson ening an eight-month search. he announced in march he was leaving bbc after the olympics. he'll start at the times i

david lehman is the managing director of commodity research and development at the c.m.e. group. he says these new financial participants are improving the market for hedgers like marcucci. >> bringing a much broader array of participants into the market globally, as well as, bringing more liquidity into the markets from investors has actually dampened volatility. as you look at it statistically. >> reporter: lehman says what makes markets volatile is uncertainty: the current drought is a good example. and today hedgers and speculators have instant access to information and can trade electronically 24-7. university of illinois agriculture economist scott irwin says that can make for faster moving markets. >> but overall you'd have to say on net it likely means just simply, more efficient quicker reacting markets to even more relevant information. >> reporter: for marcucci it now means spending a little less time on the plant floor and a bit more time monitoring commodity prices. >> i've gone from watching it maybe monthly, to weekly, to daily, to hourly. >> marcucci has assurance

some of them have served commodities claims. those kind of issues have to be resolved and i have to keep reserved so i don't discriminate if it turns out those claims are that come away sufficient money do that. so that is the biggest problem at present. as we collect additional fun, segregated funds or whatever, would move as quickly as we can with the court. we will distribute additional funds they collect it from the cme and will make distributions as quickly as we can. so i see this is going on a sort of a serial process. the litigation with the u.k. administrators over 700 million come in that case is being published before the courts. they're put in their initial position on not. the u.k. administrators position is that these funds are not segregated under u.k. law and they are unsecure general assets for his restoration. these are 30.7 funds that the firm on the u.k. part of the firm agreed and so should be segregated. our position -- are responding position on that case will be filed in september. there will be discovery

i hate to bet on commodities other than gold. it's not my strength.s it's dangerous to invest in a graying economy. we reiterate what technician tim collins said last week that monsanto, that's right, monsanto, the seed play, is the best farm story there is. at least when it comes to stocks. the bottom line is that the skyrocketing prices of corn and soybeans are something you need to keep on your radar because they could do a lot of damage to the entire economy. not just the food stocks. nothing drains the consumers' pocketbook like a rise in the price of food. keep an eye on these charts and most important keep an eye on the weather report. because if we get some rain, this scorched earth problem can at least be a miverted. otherwise, consider this one a tax. not unlike higher gasoline taxes. get ready to spend more of your hard earned dollars on food than you have in any time in decades. "mad money's" back after the break. >>> taking control of your financial destiny is smart, but why would you go it alone? >> something that has a much larger beari

you have not kept pace with commodity inflation. want to keep them happy but you have had a break in the commodities that go into flavors and fragrances. it's starting to go your way gross margin-wise. >> we have had a good gross margin improvement in the most recent improvement. we were up 210 basis points. it was really a function of many factors. we did have pricing to recover some of the commodities. it's important to note we recognize the importance of pricing to our customers. it's a fragile economic environment. so in the pricing we have taken we have not in fact recovered all the costs on commodities but what we have done to offset the impact is through new wins, we've taken significant benefits in manufacturing leverage and most importantly over the last couple of years we have decided what businesses do we want to be in and what don't we want to be in and some of those businesses with low margins where we couldn't achieve the return on capital we wanted, we discontinued those businesses and hence there's been a nice uptick

commodities, what would you do with commodities now? are they -- are they peaking at this point?t much worse? >> there's reasons why some commodities are way up like corn, for instance. that's a part of the example. but, you know, i'm not a commodities player. i have never been involved in it. i don't -- i don't know if -- if i really trust the commodity market as much as you trust the equity market. >> as we stand here, gentlemen, nasdaq turned positive for the day. there you go. thanks for joining us. we head towards the close. dow down 40 points. cutting their losses in half today. the nasdaq does finish positive for the day. that's the first hour of the closing bell. stay tuned. groupon's earnings coming up. we will show

now their son on commodity exchanges in places like chicago and paris. local traders have no voice there. there set by financial institutions like banks, insurance companies, and pension funds. >> the financial markets have discovered that wheat is sexy. they can come in and out as they please. food stocks are very attractive. that means we have very strong fluctuations making it interesting for the financial sector. i cannot set my prices locally anymore. >> in berlin, they're keeping an eye on the global market for wheat and agricultural commodities. the prime importers are the north african and gulf countries. egypt alone needs at 10 million tons of wheat this year. >> the lower euro exchange rate means it is more competitive than that of other countries. on the other hand, there's a problem that supplies are tight. weather problems have caused crop failures in the united states and russia. >> suddenly, his wheat is a prized commodity. only one year ago he made a net profit of 200 euro per ton. this year, 250. >> let's take another look at the dax. up