07/26/2012 07:59 am ET

Drought To Send Corn, Meat Prices Soaring: Seven And A Half Things To Know

Thing One: The Heat Of The Meat: And so it came to pass that in that dread Summer of '12, that vegetarianism did spread across the land.

We didn't see it coming at first. It started as a stubbornness of the sky, a withholding that changed from curiosity to nightmare as the rain refused to fall, day after day after day. And the heat rose to a point well above our own body temperatures and just stayed there, day after day after day. It took its toll on the land: By late July, nearly 1,300 U.S. counties had been declared disaster areas. 76 more got added to the list just yesterday.

All the while the corn withered and died. The corn that infuses our bodies, that makes up 69 percent of the carbon in a strand of hair plucked from our heads. The corn that we stuff our cows and pigs and chickens with, until they can hardly move in their pens. And before long the prices of these meats started to rise around the world. It took a while, but a pulled-pork sandwich eventually became a luxury item, like a Christian Louboutin bag.

That's when we forced ourselves to learn to love soy burgers and soy dogs and tofurkey. The soy crop didn't fare well in that Summer of '12, either, but at least soy doesn't eat through mountains of corn and drink and pollute rivers of water and fart methane into the already polluted air. So, soy: It's what's for dinner.

Thing Two: Sandy Sees The Light: Once upon a time there was a guy named Sandy Weill, who was the world's leading proselytizer of the idea that banks should not be small frail things but should instead be dizzyingly gigantic Rube Goldberg devices, dominating commercial banking, investment banking, insurance, lemonade-selling, you name it. He preached this religion while building Citigroup into a behemoth in the 1990s, and he preached it even after the financial crisis that his bank, and other banks trying to keep up with his bank, created. He preached this gospel even as recently as May. But yesterday talking to CNBC he had a sudden conversion, declaring that the time had come for big banks to be split up. This led to jaws dropping all over the financial world, and eventually led to motive-sussing exercises. Sandy has a mountainous ego, observes Charlie Gasparino, and was probably tired of being hated and shunned. This was also a handy way to take a potshot at his former employee and rival, big-bank lover Jamie Dimon. The main question now is whether Weill's conversion will actually make people think about, you know, breaking up the banks.

Thing Three: Nomura's Seppuku: Kenichi Watanabe, CEO of Japan's Nomura Holdings, has stepped down amid an insider-trading scandal at the bank. Another top bank executive, Takumi Shibata, also fell on his sword. Watanabe was doomed by three insider-trading investigations in his four years at the top, Reuters notes. His departure also raises questions about whether Nomura is going to keep building itself into Japan's version of Citigroup, with businesses sprawling all over the world: "Watanabe and Shibata oversaw the troubled 2008 attempt to absorb assets of failed U.S. bank Lehman Brothers and a key question for their successors will be whether to follow their ambitious plans for worldwide expansion."

Thing Four AAAnarchy In The U.K.: The U.K.'s god-awful economy has put the country's AAA credit rating at risk, the Financial Times writes. It is also proving to be a repudiation of the batshit notion -- enthusiastically shared by conservative economists in the U.S., at least while a Democrat is in the White House -- that austerity encourages economic growth. That has long been the mantra of Chancellor of the Exchequer George Osborne, whose own job is looking increasingly shaky, Bloomberg writes.

Thing Five: Zynga Zinged: The maker of Draw Something (remember that?) maybe needs to draw something like a new business plan. Zynga reported disappointing quarterly results last night and warned the rest of the year didn't look so hot, either, and its stock price plummeted by a third. This is horrible news for Facebook, which gets a large chunk of its revenue from Zynga. Facebook reports quarterly earnings this afternoon, and investors had hoped it would be a chance for the social-networking giant to erase the memory of its debacle of an IPO. That hurdle just got a lot higher.

Thing Six: The Defenestrations Will Continue Until Morale Improves: The Libor scandal has just put another big hole in Barclays. Independent director Alison Carnwath is stepping down, the Wall Street Journal writes, after becoming frustrated with the leadership's handling of the Libor scandal: "A particular conflict at the time was the size of the pay package awarded to then-Chief Executive Robert Diamond, with Ms. Carnwath pushing for him to forfeit his bonus because of the bank's struggles. Ms. Carnwath lost the boardroom battle this spring, leaving her frustrated with Barclays and its governance, according to people familiar with the matter."

Thing Seven: Muni Minefield: Paging Meredith Whitney: Municipal-bond investors are increasingly nervous that local governments are going to start stone-cold defaulting, as a business model, the Wall Street Journal writes: "Although the numbers remain small—and the widespread blowup expected by analyst Meredith Whitney, among others, hasn't come to pass—Moody's Investors Service said last week that the recent moves, particularly in San Bernardino and Stockton, raise questions about whether 'distressed municipalities will begin to view debt service as a discretionary item in their budget and whether defaults will increase.'"

Thing Seven And One Half: Let Them Eat Crumpets: In these troubled times, when the world's wealthy are under constant assault, it's nice that they can at least have small diversions that the rest of us can't enjoy, like the Olympics. Bloomberg writes that docks along the Thames are filling up with the mega-yachts of the filthy rich, who are the only people with the wherewithal to actually enjoy the games in person.

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Calendar Du Jour:

Economic Data:

8:30 a.m. ET: Initial Weekly Jobless Claims for 07/21

8:30 a.m. ET: Durable Goods Orders for June

10:00 a.m. ET: Pending Home Sales for June

Corporate Earnings:

Before Market Open:

Exxon Mobil





New York Times

Sprint Nextel

After Market Close:



Heard On The Tweets:

CaseyNewton: Zynga investors are playing a new game right now called Dump Your Stock With Friends.

@moorehn: The more I think about Glass-Steagall, mark-to-market, and failed banks, the more I want to look at baby rabbits.

@cr_harper: John Reed, Phil Purcell, now Sandy Weill -- all disavowing the bank models they created. Ken Lewis, we're waiting for you...$C, $MS, $BAC

@mattyglesias: Imagine a world in which the side with the most votes regularly prevailed in the Senate. Crazy dream.

@umairh: "Freedom". It's basically a bigger Walmart.

-- Calendar and tweets rounded up by Khadeeja Safdar.

And you can follow us on Twitter, too: @markgongloff and @byKhadeeja