Chinese stock market down, existing home sales up, honeybees missing

And Alan Greenspan said the word "recession" -- no wonder Wall Street is nervous.

Published February 27, 2007 4:28PM (EST)

How the World Works thrives on finding unlikely connecting points between disparate phenomena, so we were titillated by the Tuesday morning Capital Spectator question posed by James Picerno, "What's the link between the Chinese stock market and U.S. subprime mortgage market?"

(For those not keeping an eye glued to the Chinese bourse, after reaching an all-time high on Monday, the Chinese stock market plunged on Tuesday, sending Western investors, already jittery because Alan Greenspan said the word "recession" on Monday, into a stock-selling frenzy.)

But then Picerno disappointed us, observing that there isn't any connection, really, other than to prove that long-running bull markets can and will go bust.

But there is a nervousness in the air: Some analysts think that the reason the U.S. economy did not plunge in the fourth quarter of last year was because oil prices kept falling. But now oil prices are going back up, leading to speculation as to whether all those homeowners who are failing to pay their subprime mortgages will now face the double whammy of higher gas and heating bills to deal with. And while today's just-off-the-press news tells us that existing home sales ticked upward, the more important data is that the median sales price of those homes fell, again, while the number of unsold homes rose. That suggests that there is more downward pressure on prices to come. Good news for prospective buyers, perhaps, but bad news for homeowners facing the possibility that the value of their homes will soon be less than their mortgages.

But really, all of this economic news pales before the plight of the honeybee. The New York Times has a fabulous story about the mysterious death and disappearance of millions of honeybees all across the nation. There appears to be no single answer explaining "colony collapse disorder," but industrial-size agriculture depends on the delivery of industrial-scale honeybees, so brows are getting furrowed.

One problem: "A flood of imported honey from China and Argentina has depressed honey prices and put more pressure on beekeepers to take to the road in search of pollination contracts. Beekeepers are trucking tens of billions of bees around the country every year."

Globalization, in the form of cheap Chinese honey, strikes again. And as a result, suggests Times reporter Alexei Barrionuevo, "It could just be that the bees are stressed out."

Join the party! My own theory is that queen bees, while keeping one eye focused on the Chinese stock market and the price of crude oil, are buzzing worriedly as they follow real estate news reports, mindful that if home prices keep falling, the pressure on the mortgage lending industry will spread out of the subprime sector and into the good old prime slice, which in turn will cause a widespread credit crunch, and hurtle the economy into recession. Because if widespread honeybee colony collapse disorder isn't a sign of growing systemic risk, I don't know what is.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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