Buffalo Bill’s Wild West Show: Winners And Losers

Continuing with the Wild West theme, “Buffalo Bill” Cody staged the period with “border dramas.” Buffalo Bill’s fame as a westerner gave his shows star appeal and an aura of authenticity.

The market has had its own border drama this week.

The sentiment has fluctuated between fear that the talk of strengthening fundamentals are just a show and faith that the fundamentals have an aura of authenticity.

The Russell 2000, of the four indices a reliable measure of consumer sentiment, began the week looking like the warning phase would accelerate. By the end of Thursday’s session, IWM returned to an unconfirmed Bullish Phase.

The losers during the Wild West were the bisons. While Buffalo Bill and the army hunted, the bison went nearly extinct.

Today, agricultural commodities were the big losers. DBA, the agricultural fund ETF, made a new all-time low. Wheat, corn, soybeans, coffee, and sugar all declined as well.

Sure, cheap food prices sounds great. However, a deflationary trend may not be so good.

Could an oversupply indicate a more insidious underlying issue of an economic extinction?

Indeed, the small U.S. farmer faces extinction. Hunted by big Industrial farms, the use of commercial machinery has greatly reduced the cost of production.

Furthermore, an article in the WSJ states that Brazil has taken over the grain export market. The U.S.’s agricultural dominance has eroded.

“America’s share of global corn, soybean and wheat exports has shrunk by more than half since the mid-1970s,” the USDA says.

Rural communities will feel the biggest impact. Job losses and lower farmland values will cut the tax bases in these areas.

On the positive side, U.S. companies like Cargill, Bunge Ltd., Deere and Mosaic are exporting machinery to help Brazil’s market.

Brazil is also aiding Monsanto (MON) by ramping up its genetically modified seed production.

In 1873, an economic depression hit the country. Cody’s claim that he killed 4,280 Buffalo appealed to those who sought to make money from Buffalo byproducts.