Livestock “The greatest homage we can pay to truth is to use it.”
Riding Herd
MARKET
Digest R
by LEE PITTS
Create-A-Crises
– JAMES RUSSELL LOWELL MAY 15, 2013 • www. aaalivestock . com
Volume 55 • No. 5
Fat Thumbs And Black Boxes by Lee Pitts n April 23, the Dow Jones Industrial Average dropped 145 points in the blink of an eye, erasing $200 billion worth of investor’s wealth. What caused the minicrash? Was it a negative report about the slow growth of our economy, another European country going broke or, did Warren Buffett die? The answers are nope, no and we certainly hope not. The event that caused IRA’s to fall faster than President Obama’s approval ratings was a “tweet” on Twitter. If you’re like me and the only tweet you are aware of is made by a robin in the spring, a tweet these days occurs when someone makes a comment via an online social networking service known as Twitter. In this case, a group known as the Syrian Electronic Army hacked into the Associated Press and “reported” that the White House had been rocked by two explosions and Barack Obama had been injured. That “tweet” sent the Dow Jones tumbling 145 points. A few minutes later the Associated Press said the tweet was not true, the White House confirmed there were no explosions, and the market made up all of its losses and closed higher on the day. Welcome to the world of something called “High Frequency Trading” where traders on Wall Street use complex
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NEWSPAPER PRIORITY HANDLING
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Lawyers, bankers, and hoot owls sleep with one eye open. mathematical formulas to buy and sell shares of stock, commodities and bonds. In this case, computers picked up the news of the fake White House bombing and immediately signaled other computers to start selling stock, with nary a human doing anything. Why are we telling you about all this about a stock market that doesn’t have anything to do with the stock you have to feed? Because this is what passes for a “market” these days and the
price you get for your cattle, no matter how you sell them, could very well be determined by a bunch of computers talking to each other.
In The Wired World Even veteran traders on Wall Street were startled by the Twitter crash. “It’s frustrating and scary that a tweet can erase hundreds of billions from the market in a short time, but that’s the world we live in,” said R.J. Grant, a Wall Street equity trad-
“We haven’t seen anything like this before” said Giovanni Vigna, chief technology officer of the security firm Lastline. It may not be right, moral, or helpful, but you’d better get used to it because High-Frequency Trading (HFT) is legal and made up for half of all stock trades last year! Here’s how it works, or in some cases, doesn’t work. Sophisticated computer programs and models are constructed that are owned by trading firms. They then use computer programs to trade securities, bonds and commodities on a screamingly-fast basis. Their goal is to make just a fraction of a cent per share, or pound of beef, on every trade. But make no mistake, these pennies do mount up. Although you may hold stocks in your portfolio for years, an HFT trader’s position may be held for only milliseconds. The continued on page two
U.S. Beef Academy offers young producers a unique, advanced learning experience he second annual U.S. Beef Academy is focused on providing the next generation of beef producers a unique, applied beef cattle management experience on the historic Baca Ranch location, now a national preserve, in the high country of northern New Mexico. The USBA, hosted at the Valles Caldera National Preserve, is the second tier of the New Mexico Youth Ranch Management Program. New Mexico State University’s Cooperative Extension Service, Zoetis animal health products, New Mexico Beef Council and other members of the beef cattle industry sponsor the youth ranch management program. The beef academy, scheduled for July 13-18, is tailored as an advanced, applied educational experience for youth between the ages of 16-19 with a sincere desire to be the next generation of beef industry producers and leaders. NMYRM was developed in 2011 to promote applied learning opportunities for youth from family ranches. The NMYRM program, now in its third year, initially started with a single, week-long ranch camp experience in June for
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youth from New Mexico. The ranch camp, now open to youth from across the United States, covers multiple aspects of ranch management, including beef production, range management, wildlife management, marketing and economics. “During the ranch camp, we have one day to cover all aspects of producing safe and quality beef, which is a sizable task in a hands-on format,” said Manny Encinias, NMSU Extension beef cattle specialist and member of the ranch camp organizing committee. By design, the curriculum at the academy is to build off the foundation developed at the ranch camp experience. “Instead of one or two hours per topic, we spend an entire day,” Encinias said. The hands-on, USBA curriculum is developed by beef industry experts and professionals from across the United States. Faculty from Cooperative Extension Service affiliates at NMSU, Texas A&M University, University of Wisconsin-River Falls, South Dakota State Uni-
ealizing that most people don’t understand the role that cattle and sheep play in sequestering carbon, fertilizing the ground, breaking the surface crust to prevent runoff, reducing fuel loads to prevent catastrophic fires, and creating high quality protein from grass, I recently made a phone call to 1-800GOT-RICH. “Hello, you have reached the main office of Create-ACrises Corporation. With offices in all 50 states and 100 countries around the world we can specifically design and create a crises just for you. We have a proven track record and are the go-to experts if you want to to shut down a business, farm, ranch or tie up a private citizen in court and make he or she go broke by paying lawyer bills. All of our lawyers are currently out creating crises and emergencies at the moment so please listen carefully and select from the following menu options. “If you would like for us to create a crises for you to stop someone from building on their own land or improving their home, press 1. “We have an answer for everything and can be very creative. If you have a specific complaint about an oil company, or other corporate criminal, and would like for us to create a crises to stop them from producing energy to run your car and heat your home, press 2. “If you have witnessed someone mistreating an animal by tugging on its leash too hard, press 3 and our animal rights lawyers will put them in Leavenworth or San Quentin faster than PETA can strip the clothes off another fruitcake model or Hollywood actress. “If, while trespassing on a farmer or rancher’s private property you think you saw what should be an endangered species, press 4. If you would be willing to trespass on private property and plant an endangered species, please press 5. We are always looking for volunteers. “If you, a member of your family, or anyone you know continued on page four
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