The image says it all. I’d like to think that after 35 years of being involved with markets that I’d seen it all, but today is one for the record books.

We start out the day with “men at work” from Bernanke to Paulson. They’re an interesting pair that’s for sure. But, talk will only get you so far. Given the condition of FNM and FRE combined with Paulson’s breezy attitude you’d be right to assume that these firms will, for all practical purposes, be nationalized. Another bite in your wallet and a brush-off to Moral Hazard concerns.

Oil was up around a dollar while stocks were struggling higher most of the day. Then, out of the blue, oil shot up $3 and stocks started to cave. At their nadir indexes were sharply in the red as oil …

Source This morning we were pleased to welcome Janet Yellen, President of the Federal Reserve Bank of San Francisco, to our UCSD Economics Roundtable. She focused on three main challenges: the housing slump, financial market turmoil, and commodity prices, which she likened to the three witches from Macbeth. Her complete speech is available from the FRB SFO Here are some excerpts. Janet Yellen (photo courtesy of FRB SFO). Housing. Unfortunately, it appears to me that there are at least three reasons for thinking that housing prices have further to fall. First, the ratio of house prices to rents-- a kind of price-dividend ratio for housing-- still remains quite high by historical standards.... Second, inventories of unsold homes remain at elevated levels.... Third, the futures market for house prices predicts further declines in a number of metropolitan areas this year.... Financial markets. ...

On June 10th, the Commodity Futures Trading Commission (CFTC) called a public meeting of its Energy Markets Advisory Committee to address continually exponentiating oil prices.

Representatives from major investment banks such as Goldman Sachs, JPMorgan, and Morgan Stanley fielded questions regarding their banks’ roles in the oil futures market for the first time under the public eye. Many groups have raised suspicion as to whether the banks are using investors’ funds to bid up oil prices, while at the same time issuing predictions that prices will rise.

Donald Casturo, managing director of Goldman Sachs, stated: “There is a clear separation between our research and trading departments…The firm is acting within the terms of the law.”

Still, organizations like Industrial Energy Consumers of America remain skeptical of the truth in this statement. The CFTC announced the launch of an investigation to be conducted by a special panel consisting of Federal Reserve, SEC,

...

CNBC Stock Blog: Thomas Winmill likes miner Freeport McMoRan for a “special reason.” What special reason?

One special reason Winmill likes Freeport McMoRan is its involvement in the production of molybdenum.

“It doesn’t trade in the futures market,” he pointed out.  “Molybdenum is used primarily for pipe, for drilling pipe for oil exploration, any kind of pipeline…it’s a very strong market, and a small market.”

In the models I use Freeport McMoRan (FCX -

I’m long 5,000 bushels of corn in the futures market. I bought the contract at $6.22 (a bushel), near corn’s record high price.

Why? Because I’m expecting the price of corn to more than double in the next 18 months, to well over $12 a bushel. And I’ll be adding more corn to my portfolio when I see the next buy point.

I plan on buying soybean futures, too. Currently trading at just under $13 a bushel, I expect soybean prices to eventually climb to more than $25 a bushel, doubling in price.

And that’s just the beginning!

Other foods on my radar screen include …

Cocoa, which has enormous upside potential as hundreds of millions in …

Everybody knows there is some kind of food crisis. Grocery prices are painful. Wal-Mart has rationed rice purchases. Mexico has had tortilla riots due to corn prices. Rice riots have occurred Asia. China introduced laws prohibiting conversion of human food crops to fuel.

However, who would have predicted a 5 standard deviation price move for an index of 60 foods, or a 16 standard deviation move in rice prices. No, that is not a typo. Bloomberg today reported a UN Food Crisis study and related price charts revealing this food Black Swan.

At the core of the definition of Black Swan is an unpredictable and unexpected price move that is way off the chart in terms of standard deviations from the mean.

Since 3 standard deviations theoretically encompasses 99.7% of all observations, 5 to 16 standard deviations is a shocker.

We’ll have to rely on businesses and

...