Drudge Retort: The Other Side of the News
Monday, February 05, 2018

Matt Levine, Bloomberg: I love Chicken Libor's parallel to the real Libor scandal ... The gist is that a bunch of big public chicken producers were losing money when feed prices went up, and wanted to cut production and raise prices, but couldn't do that on their own because chicken is a commodity product and no one supplier has pricing power. Their cunning plan was allegedly to cut production and raise prices, but also talk about it on their earnings calls, so that everyone else knew they were planning to cut production and raise prices and would do the same. From the complaints: "In early 2008, through press releases, earnings and investor calls, at investment bank conferences, at events hosted by Agri Stats, and at the myriad trade association meetings attended by many of their senior-most executives, Defendants began calling on one another to heed mistakes of the past, preaching that oversupply was decimating industry profits, and increased supply-side "discipline" was needed to halt the downward trajectory of chicken prices."

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"This production 'discipline' -- i.e., the reduction or relative stabilization of industry capacity, particularly at the breeder flock level, where such efforts would be most effective -- was a mechanism to increase Defendants' profits. Defendants' efforts were supported by public statements made by their executives, which involved more than an announcement of a Defendant's own conduct. In fact, as alleged below, many of Defendants' executives' calls for a new era of "discipline" included explicit statements that deeper production cuts were an industry-wide imperative that would pay dividends for "the industry" as a whole. Defendants, who collectively control nearly 90% of the U.S. chicken market, jointly engaged in this production reduction effort."

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The righties here who demonize Labor Unions will be all in for this market manipulation.

#1 | Posted by oldwhiskeysour at 2018-02-05 07:55 PM | Reply

These crooks have gotten the Government to define grade A chicken as chicken soaked in water which adds water weight and profits. If the skin is "too wrinkly" its down graded.

#2 | Posted by bayviking at 2018-02-05 09:04 PM | Reply

#2 Don't forget to add the Government crooks are the ones responsible for forcing the feed price up also...

#3 | Posted by PinkyanTheBrain at 2018-02-06 12:34 AM | Reply

demonize Labor Unions will be all in for this market manipulation. #1 | POSTED BY OLDWHISKEYSOUR

The market manipulation which the article focuses on, is illegal.

#4 | Posted by GOnoles92 at 2018-02-06 08:34 PM | Reply

Hypothetically, if one knew Arty Schronce (guy which received and compiled the chicken quotes every week) and he signaled the binary movement of (up) or (down), 24hrs before the data was published, a person could make a living off of working an hour a week and merely knowing which direction the price would move before it moved and gained momentum.

Also: illegal, in most cases.

#5 | Posted by GOnoles92 at 2018-02-06 08:43 PM | Reply

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