Tuesday, September 28, 2010

Seedlandfund View

New Equilibrium

Seedlandfund subscribes to the theory that we are heading towards a new equilibrium in the 'flat world' global economy. The US, less a producer, is in economic decline or at least entering a period of slower growth. The tightly managed production economies, such as China, are rising in the world.

Focused, state-controlled capitalism will be the winner over a chaotic US-style 'capital controlled state' because the US system lacks sufficient unity of purpose to be able to pull together and reverse the economic decline. The US gets motivated only when the US faces a deep, unifying crisis, like WWII.

But, the stock market is rising! The US stock market is simply a mood ring indicating the sentiment of investors about the growth prospects of large global corporations but does nothing to reveal the true state of the health of our people.

We believe better 'people metrics', to track and monitor the US economy, might be the US poverty rate, the home foreclosure rate, the financial condition and budgets of US cities and states and the financial condition of US pension funds as well as the current level US household wealth (to name just a few). Recent news of these indices are indicating quite negatively.

A more cohesive and unified US could be a place that values its people and natural resources and promotes sustainable systems that help rebuild the financial health of US households.

To China's credit, China pushes very hard to keep its people working, often at the expense of the global environment but more and more in the production of alternative energy industries. .

US capitalism is measuring growth and success based on the revival of historic peak GDP growth rates, peak housing starts and car sales (all consumption rates!).

Traditional measurements reveal historical US consumption patterns that will/must inevitably change in the new economic reality.

Over the past five decades we evolved into the world's consumers but now we do not have the household income sufficient to afford traditional US consumption levels.

US companies dependent on recent peak domestic consumption levels will suffer. We head to new equilibrium.

An iceberg has been struck, the Titanic image keeps coming to mind as a metaphor for the US. The gaping hole in the side of our economy cannot be ignored.

Sent from my iPhone

Friday, September 24, 2010

Local Food

Local and organic through foraging


Heirloom tomatoes from Robert Coughlin's garden.
One Los Angeles chef decided to take organic and local to another level by having customers bring fruits and vegetables from their backyards to put in the restaurants dishes. The county intervened, but the restaurant figured out a way to get its customers involved with the menu again.
These are the last of the season's heirloom tomatoes from Robert Coughlin's garden. (Eve Troeh/Marketplace)



BOB MOON: Who needs a big produce-delivery truck, or even a trip to the local farmer's market? These days, some restaurants grow their own fresh and natural produce. You might see the chef picking the basil for that night's pesto. But here's the seed of a new idea from a restaurant in Los Angeles: Have customers grow the food. This place takes tangerines, peppers or potatoes from backyard gardens, and puts them on the menu.
Marketplace's Eve Troeh has the story.

EVE TROEH: Home gardeners love to share their yield. Robert Coughlin is no exception. His 14-square foot plot is just dirt right now -- it's resting. But this spring it was full of lettuce.
ROBERT COUGHLIN: Red oak leaf and curly leaf lettuce, romaine lettuce and two kinds of arugula that I grew.
He delivered weekly to everyone he knew.
COUGHLIN: My friends were like "Enough Robert!"
Coughlin took the teasing in stride until he saw his lettuce going to waste.
COUGHLIN: I opened a fridge and saw that the last week's supply was uneaten.
A friend told him about Forage, a trendy new restaurant less than a mile from Coughlin's home in the Silver Lake neighborhood. The chef there would take produce from local gardeners, but the veggies had to audition.
COUGHLIN: I was a little intimidated. He was breaking the leaves and smelling them and tasting them, and really looking to see if they were something he could benefit from.
Forage's chef Jason Kim took every leaf.
JASON KIM: That night we took his lettuces and we created Robert's Coronado Street Salad.
So Robert brought more lettuce, and Kim would often serve it still warm from the sun. Kim used to work in high-end restaurants that charged a lot for specialty produce like this. He wanted to serve fresh food at cheaper prices. That's why he started Forage. But he says his first thought about using amateur growers was "no thanks."
KIM: Some old lady with a bag of lemons coming in and being like, "Give me money for these lemons!"
But, he tried. And to Kim's surprise dozens of hip, urban farmers came out of the woodwork. They didn't even want money. Like Robert Coughlin, they just didn't want to waste what they grew. Coughlin says Kim made him a deal.
COUGHLIN: He said maybe we could do food credits on a card. And I said, "OK, cool," 'cause I figured I could bring friends there and take them to lunch on the food card.
And he did.
KIM: Robert was pointing to the salad and telling all his friends, "That's my lettuce!"
Chef Kim pays most local growers with credit. They've supplied up to 35 percent of produce served at Forage. And the unique things they grow give the restaurant a leg up on the competition.
KIM: This really rare stuff that actually nobody else in LA gets.
Like a pile of striped white and purple orbs from one grower.
KIM: These are Italian heirloom eggplants. Never even seen these until he brought 'em.
Kim might roast them with garlic to put on crostini. But city regulators raised their eyebrows at the program, and cracked down on Forage earlier this year. How did Kim really knew where the produce came from?, they asked. And who was accountable if someone got sick?
KIM: They said that we are not allowed to take in stuff from unapproved sources.
It took Kim months just to figure out what that meant. He helped some of his best growers get certified -- through the same process used for farmers markets. Robert Coughlin shows off his state certificate.
COUGHLIN: Yellowneck squash, zucchini...
It lists what he can grow, including each kind of tomato.
COUGHLIN: Japanese Black Truffle, Black Inca tomato, pineapple tomatoes, and then a red beefsteak, yellow beefsteak...
Now more Forage growers want to get certified. Recently, students from a local elementary school came by to show Chef Kim a green squash they grew. It has a very long, thin neck. No one had ever seen anything like it. Kim couldn't serve it, but he still found a way to use it -- as decoration for the Forage display case.
In Los Angeles, I'm Eve Troeh for Marketplace.

Monday, September 13, 2010

Fish Story


Fish farm could soon revive empty greenhouse on Central Coast

Chris Newman, a onetime novelist, has converted 14,000 square feet in a former rose-growing facility into stream channels, gravel beds and water pipes to raise fish and grow vegetables commercially.

By Kurtis Alexander

September 11, 2010

Corralitos, Calif.

Greenhouses once ruled the Pajaro Valley on the Central California coast, where the local cut-flower business found success worldwide.

Empty nurseries now dot the area, a sign of the industry's decline. But with the help of plenty of water, Chris Newman, 58, hopes to restore the glory of greenhouses.

His tactic is called aquaponics, a combination of aquaculture — fish farming — and hydroponics — growing plants in water. With the help of neighbors and his brother Tom, Newman has converted 14,000 square feet in a former rose-growing facility into a system of stream channels, gravel beds and water pipes where he hopes to soon raise fish and grow vegetables commercially.

"I'm pushing the envelope here, but I think this is something that's bound to take off," said Newman, who grew up in the Pajaro Valley, leaving only to launch a brief but successful career writing mystery novels in New York.

In recent decades, aquaponics has become an increasingly popular backyard pursuit, though its commercial application has been limited.

Just a few aquaponics businesses currently operate in the country, said Rebecca Nelson, editor of Wisconsin-based Aquaponics Journal. But the number is on track to grow.

"Farmed fish is really where we're going as far as what we'll have access to," she said.

Aquaponics evolved from the desire to harvest fish rather than put stress on dwindling wild fisheries and grew to use the extra water for crops, Nelson said. The method's toll on the environment, compared with other ways of farming fish and vegetables, is minimal.

"People here care about food ingredients and where they're sourced," Newman said. "Every 27-year-old kid in San Francisco now has a food blog."

Newman, who has hired a marketing manager to develop his sales strategy, already has a name for his venture: Santa Cruz Aquaponics.

In his rented greenhouse, he's dug 40-foot channels for fish such as catfish. Above those are two stories of gravel beds where vegetables will grow — initially watercress but perhaps others in the future.

The water will be pumped from the fish channels, where nitrogen and other plant-friendly nutrients accumulate, through the vegetable beds and then into an adjacent channel where duckweed will grow for fish food. Cleansed by the plants, the water then will flow back to the fish, closing a nearly self-sustaining loop.

Castings from worms in nearby bins, Newman says, will be added to the system to serve as an antibiotic for the fish and fertilizer for the plants.

Newman has already sunk nearly $100,000 into his venture, and he's anxious to see a return.

"I know we're going to do well," he said. "And a lot of people here are rooting for us."

Alexander writes for the Santa Cruz Sentinel.

Wednesday, September 8, 2010

Betting Farm

Bloomberg News
Burry, Predictor of Mortgage Collapse, Bets on Farmland, Gold

Sept. 7 (Bloomberg) -- Michael Burry, the former hedge-fund manager who predicted the housing market’s plunge, said he is investing in farmable land, small technology companies and gold as he hunts original ideas and braces for a weaker dollar.

“I believe that agriculture land -- productive agricultural land with water on site -- will be very valuable in the future,” Burry, 39, said in a Bloomberg Television interview scheduled for broadcast this morning in New York. “I’ve put a good amount of money into that.”

Burry, as head of Scion Capital LLC, prodded Wall Street banks in early 2005 to create credit-default swaps to bet against bonds backed by the riskiest home loans. The strategy paid off as borrowers defaulted, letting his investors more than quintuple their money from 2000 to 2008, according to Michael Lewis’s book “The Big Short” (Norton/Allen Lane).

Burry, who now manages his own money after shuttering the fund in 2008, said finding original investments is difficult because many trades are crowded and asset classes often move together.

“I’m interested in finding investments that aren’t just simply going to float up and down with the market,” he said. “The incredible correlation that we’re experiencing -- we’ve been experiencing for a number of years -- is problematic.”

Still, it’s possible to find opportunities among small companies because large investors and government officials focus on bigger ones, he said. He is particularly interested in small technology firms.

“Smaller companies in Asia, I think, are neglected,” he said. “There are some very cheap companies there.”

Investing in Gold

Gold is also a favored investment as central banks issue debt and devalue their currencies, he said. Governments haven’t adequately addressed the causes of the financial crisis and may be sowing the seeds for future problems by borrowing, he said. In the U.S., lawmakers showed they didn’t understand how to prevent another crisis when they gave the Federal Reserve and Chairman Ben S. Bernanke additional authority, he said.

“The Federal Reserve, in my view, hadn’t seen this coming and in some ways, possibly contributed to the crisis,” he said. “Now, Bernanke is the most powerful Fed chairman in history. I’m not sure that’s the right response. The result tends to tell me they’re not getting it right.”

The Dodd-Frank Act, signed by President Barack Obama on July 21, creates a consumer bureau at the Fed to monitor banks for credit-card and mortgage lending abuses. The bill also gives the Fed chairman a seat on a newly created Financial Stability Oversight Council, which is supposed to spot and respond to emerging systemic risks.

Background in Medicine

Originally, investing was a hobby for Burry, who as a resident neurosurgeon at Stanford Hospital in the 1990s typed his ideas onto message boards late at night.

He went to high school in San Jose, California, graduated from the University of California, Los Angeles and then earned a medical degree from the Vanderbilt University School of Medicine, according to “The Big Short.” The book portrays him as a loner from a young age who excelled in areas that required intense concentration. While searching for undervalued companies, he discovered his own house was overpriced, prompting a broader investigation of the housing market.

It’s possible Burry is part of “an extremely small group” of economists and investors who are “really exceptionally adroit” at forecasting, former fed Chairman Alan Greenspan said in April. Burry has been critical of the role Greenspan played in fueling the crisis with low interest rates.

Goldman Sachs

Burry said Wall Street investment banks such as Goldman Sachs Group Inc. shouldn’t trade on their own account and don’t always act in the best interests of clients. The firm is disbanding its principal-strategies business, one of the groups that make bets with the company’s own money, two people with knowledge of the decision said last week.

“I don’t believe that any Wall Street bank always acts in the best interests of its clients,” said Burry, adding that he often fought with firms while betting against housing. “It’s an incredibly vicious, incredibly competitive world when you’re going to go take a position opposite one of those banks.”

He asked seven Wall Street banks to help him bet against the housing market, and only Deutsche Bank AG and Goldman Sachs expressed any interest, Lewis wrote in his book. At the end of June 2008, original investors in Burry’s hedge fund received a return on their money, after fees and expenses, of 489.34 percent, according to the book.

To contact the reporter on this story: Dakin Campbell in San Francisco atdcampbell27@bloomberg.net

Tuesday, September 7, 2010

Without Resources, Resourceful

Haiti: Living in Limbo – Island enterprise

Posted By: Bryan Chan
Los Angeles Times
Boulevard Jean-Jacques Dessalines in Haiti’s capital was a smoking ruin when Times photographer Carolyn Cole arrived in the aftermath of the January earthquake. Today the shops may still be shattered, but the businesspeople have found a way to go on.
Reporting from Port-au-Prince, Haiti — The shattered stores along Boulevard Jean-Jacques Dessalines may never reopen. But amid the colonial-style columns and wide, arched entries, one group of women won’t let a little dust get in the way of beauty.
They’ve set up a sidewalk salon, where patrons soak their feet in large metal bowls. The stylists work in teams, their clients seated on blocks of concrete or broken chairs, strands of faux hair in their laps.

“We just started doing hair at this corner,” Marie Eliz St. Floren says.

A wig costs $25 and a weave less than $5, but in the wake of the Jan. 12 earthquake, the competition is growing, she says as she twists and ties her client’s long, black braids.

“More people are doing hair now because there are no jobs in the country,” she says. “But I don’t have a problem with it, because everyone has to live together. Life is hard.”

The boulevard is bustling with activity. Women and men walk along with baskets on their heads selling used socks, stalks of sugar cane, a bit of everything. But hardly anyone is buying.

Cobbler Francois Toto rests his elbows on an ancient Singer sewing machine as he waits for customers.

“It used to be a good place to work,” the 28-year-old says of a life spent making shoes under covered walkways that once sheltered wealthy shoppers. “I don’t like it here now, but this is where we have to survive.”

At the street salon, beautician Guerline Desir remembers good times too.

“There was electricity at night. We used to have a street club with music and dancing, girls and boys mixing. It used to be fun.”

But the 38-year-old remains positive. “It’s possible that it will come back…. It could even be much better.”

A few feet away, a woman rides off on a motorcycle taxi, her hair and nails beautiful for the weekend ahead.

Thursday, September 2, 2010

Factory Food

September 1, 2010
Cleaning the Henhouse
The latest salmonella outbreak, underscoring the failures of industrial farming, reminds me of the small chicken flock that I tended while growing up on a family farm.
Our chickens wandered freely, and one dawn we were awakened by frantic squawking. We looked out the window to see a fox rushing off with a hen in its mouth.
My father grabbed his .308 rifle and blasted out the window twice in the general direction of the fox. Frightened, it dropped the hen. Yet the hen, astonishingly, was still alive. She picked herself up, spun around dizzily a couple of times, and staggered back to the barn.
A month later, my aunt visited our farm with her Irish setter, Toby, who was always eager to please but a bit dimwitted. We chatted and forgot about Toby — until he bounded up proudly to show a chicken he had retrieved for us.
It was the very same hen that had survived the fox. We shouted, and Toby sadly dropped the bird. She ruffled her feathers, glared at the dog, and then stalked off while clucking indignantly.
Perhaps that hen might have been ready to choose a cage over the perils of canines on the range, and, obviously, my family’s model of chicken-farming was horrendously inefficient and no model for the future. But the other extreme of jamming chickens into small cages is a nightmare for the animals — and the salmonella outbreak underscores that it can be a health hazard to humans as well.
Inspections of Iowa poultry farms linked to the salmonella outbreak have prompted headlines about infestations with maggots and rodents. But the larger truth is: industrial agriculture is itself unhealthy.
Repeated studies have found that cramming hens into small cages results in more eggs with salmonella than in cage-free operations. As a trade journal, World Poultry, acknowledged in May: “salmonella thrives in cage housing.”
Industrial operations — essentially factories of meat and eggs — excel at manufacturing cheap food for the supermarket. But there is evidence that this model is economically viable only because it passes on health costs to the public — in the form of occasional salmonella, antibiotic-resistant diseases, polluted waters, food poisoning and possibly certain cancers. That’s why the president’s cancer panel this year recommended that consumers turn to organic food if possible — a stunning condemnation of our food system.
The Centers for Disease Control and Prevention published a study in 2005 suggesting that in 2000 there were about 182,000 cases of egg-caused salmonella in the United States, including 70 deaths. That means that even without an outbreak in the news, eggs with salmonella kill more than one American a week.
“We keep finding excuses to keep this rickety industrial system together when the threat is very clear,” said Robert P. Martin, the executive director of the Pew Commission on Industrial Farm Animal Production. “It’s really a matter of when, not if, these serious outbreaks occur.”
About 95 percent of American egg-laying hens are still raised in small battery cages, which are bacterial breeding grounds and notoriously difficult to disinfect. Hens are crammed together, each getting less space than a letter-size sheet of paper. The tips of their beaks are often sheared off so they won’t peck each other to death.
They are sometimes fed bits of “spent hen meal” — ground up chickens. That’s right. We encourage them to be cannibals.
Industrial farms also routinely feed animals low doses of antimicrobials because growers think these help animals gain weight. One study found that 70 percent of antibiotics in the United States are used in this way — even though this can lead to antibiotic-resistant infections in humans.
“Food safety has received very little attention since Upton Sinclair,” notes Ellen Silbergeld, an expert on environmental health at the Johns Hopkins Bloomberg School of Public Health who is deeply concerned about antibiotic overuse. “The massive economic reorganization of agriculture has proceeded with little recognition of its potential impacts on these aspects of food. Cheapness is all.”
But as Professor Silbergeld notes, unsafe foods are cheap only in a shortsighted way. The Pew commission found that industrial production produces hogs that at first sight are cheaper by six cents per pound. Add in pollution and health costs and that industrial pork becomes more expensive by 12 cents per pound.
Largely for humanitarian reasons, Europe already is moving toward a ban on battery cages. In 2008, California approved a similar ban, and other states are expected to follow.
So let’s hope this salmonella outbreak is a wake-up call. Commercial farming can’t return to a time when chickens wandered unfenced and were prey to foxes (and Irish setters). But we can overhaul our agriculture system so that it is both safer and more humane — starting with a move toward cage-free eggs.
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