Grain prices, Anti-US housing trades, Nobody Knows Anything
This year the prices of Illinois corn and soybeans are up 40% and 75%, respectively, from a year ago. Kansas wheat is up 70% or more.
The prospect for a long boom is riveting economists because the declining real price of grain has long been one of the unsung forces behind the development of the global economy. Thanks to steadily improving seeds, synthetic fertilizer and more powerful farm equipment, the productivity of farmers in the West and Asia has stayed so far ahead of population growth that prices of corn and wheat, adjusted for inflation, had dropped 75% and 69%, respectively, since 1974.
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Predictions are difficult in culturally biased realms. Through a novel experiment, researchers showed an average song can become a hit or a clunker based on the principle of cumulative advantage.
The main challenge to counterfactual thinking is the issue of causality. In some situations, cause and effect is clear. You are wet because you didn’t bring your umbrella. But in many social systems, indeed in all complex adaptive systems, cause and effect are frequently difficult to link.
The Halo effect: we tend to observe success, attach attributes to that success, and recommend others embrace these attributes to achieve their own success.
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