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Note to Wall Street: next time, read the Mex Files first

3 February 2007

WE know better, don’t we? 

Ben Berkowitz, at AOL’s “Blogging Stocks”, should be commended for at least paying attention to how events in Mexico might affect the U.S. stock market, but it would help if he bothered to check the facts. 

(… uh, Ben… why don’t you send some money this way and at least get a semi-reliable source to check).He begins with something rather startling: 

This week’s story that no one read and everyone should have is about tortilla riots in Mexico. Yes, tortilla riots.

No, Ben… if you bothered to read Ione Grillo’s AP story, there were PROTESTS — not riots — in Mexico City (and elsewhere throughout the country).  I guess Ben isn’t used to democracy, or street action. 

Secondly, Ben buys into the usual explanation about rising ethanol prices.  Yeah, that may have some effect, but then he slides into a riff on “publicly-traded corn companies like Archer-Daniels-Midland (NYSE: ADM), Bunge Ltd. (NYSE: BG) and Corn Products International Inc. (NYSE: CPO)”.

Ben doesn’t know the difference between yellow corn (used for ethanol) and white corn (the stuff we eat).  Yeah, more yellow corn is being planted in Iowa and Nebraska and Manitoba… but that’s not the problem.  It’s those “publicly-traded corn companies” v. José Lopez who doesn’t have access to credit or fuel subsidies, and who can’t shelter his income in off-shore accounts.  José goes out of business, and you can subtract his few extra bushels from the dwindling production of the dwindling number of Mexican farmers. 

Mexico could — and did — grow enough corn to meet domestic needs (and usually has since … oh, 5000 BC or so), with occasional imports needed in the 20th century.  It was only after 1994 (the year NAFTA was born) that there were these serious disruptions.  Yeah… as Ben notes, all food prices are likely to rise as a result, and emigration to the U.S. might accellerate if corn prices don’t come back down… but you’d think the business news editor at AOL might have talked to someone who knew something about Mexico… or agriculture or … somebody?

One Comment leave one →
  1. 3 February 2007 6:23 pm

    Thanks again for the wonderful reporting! He really should be reading your site. I do.

    I’ve really got to take your lead and spend more time writing about these issues. But I think I will have to wait until I get back to Mexico in a couple weeks. I am very grateful for your work.

    Jennifer… my apologies… I SHOULD have said “read the Mex Files AND… and send us both wazoos of money for our work” 🙂

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