Intro to The Secret Financial Life of Food and Chapter One – WC: 235
“…others buy futures contracts as part of an investment strategy…because food prices may move in a different direction than stock prices, some investors see the purchase of futures contracts as a way to diversify their portfolios.” pg 10
“It only took a decade but it’s officially OK to fall for U.S. banks again. Consumers feel good. Business leaders feel good. And interest rates are finally not zero — in fact, they may get an extra lift from President-elect Donald Trump, should his policies boost economic growth as everyone seems to be expecting.”
Lachapelle, T. (2017, January 13). It’s OK to Love Banks Again. Retrieved January 13, 2017, from https://www.bloomberg.com/gadfly/articles/2017-01-13/banks-deliver-goods-to-justify-trump-bump
The quote from page 10 directly addresses the reality of the commodification of food. The similarities between the classification of motive in trading food commodities “hedging and passive investment” and “speculation” brought the 2007-2008 financial crisis to mind. During this banking debacle, banks that were “too large to fail” decided to advantageously grant loans to individuals who, on paper, had no chance of repaying them because they could shift the responsibility to an individual investor willing to take the risk. Newman wrote on page 10, “just as many owners of mutual funds don’t know which companies they hold in their stock portfolios, many investors don’t know which commodities contracts are included in their index funds.” The “speculation” entrepreneur wants to fix a favorable price for himself to either profit from, or trade to an entrepreneur looking to diversify his portfolio for his own guaranteed profit, or even to try and dump a riskier contract on an investor that is even more removed from the product than the writer of the futures contract. On page 11 Newman quoted Michael Pollan, [commodities are] “without qualities; quantity is the only thing that matters”. In the digitized trading grounds of the futures market, movers and shakers are only seeing digital numbers to represent an idea with so much more meaning. The uncertain vernacular of the writer accurately conveys the hopelessness of restoring hope in the U.S. bank system.