2022-12-07

Dad Joke

Q: Why are bakers always broke? A: Because they always knead (need) dough.

OK, I apologize. I was reminded of that joke from my infancy when I saw that wheat, a crop that is heavily dependent on artificial fertilizers, is cheaper now than it was a year ago. Nitrate fertilizers have one non-free ingredient, which is natural gas (or, potentially another form of energy). This was not supposed to happen. Expensive energy was supposed to give rise to expensive fertilizer, which was supposed to drive up the price of wheat and corn. (Soybeans are a bit different, because they can synthesize their own bound nitrogen from the air.)

Maybe wheat is about the same price; the chart was not easy to read. It certainly has come down in price a lot since the summer.

Anyway, commodities were all over the place today. Oil down, gas up, silver up, gold up a bit, copper up. Bond yields were down across the piste, with the exception of India, up 2bp. The vicious bear flattening of yesterday reversed slightly, but don’t say ‘steepener’.

It’s amazing that plants can create their own ammonia (symbiotically with some type of bacteria). Regular fertilizer is made by the Haber process, which is incredibly energy-intensive. Vast amounts of natural gas is needed for this. Some work is being done on alternatives, e.g. this, but I’m surprised it’s not more widespread.

Politicians

I saw some chart of public perceptions of the integrity of politicians over time. It’s dire. Fewer than 10% of Americans respect members of Congress. I didn’t see figures for the UK, but my guess would be that we are even more cynical about members of both houses. The latest scandal is the ‘bra tycoon’ Lady Mone. How does one even become a lingerie entrepreneur? Read more in The Sun.

Only in the UK do you get politicians of this calibre.