Posted by Jonathan J. Miller -Sunday, July 5, 2009, 11:51 PM
This weekend I ripped through a terrific book The Secret Life of Lobsters by Trevor Corson written back in 2004. Even if you’re not a fan, I marveled at how he could take a mundane subject and weave an interesting (true) story on how the Lobstermen of Maine have kept the production elevated for the past several decades, despite consistent claims of overfishing. (Incidentally my lobster pots were stolen this weekend, plus we had 30 family members over to our house for the 4th for a lobster/clam bake.)
No one on either side really knew whether cyclical declines in the number of pounds caught were natural or induced by man.
In other words, this is all about subprime lending.
While trying to find my interview on NPR about last week’s market reports (I was unsuccessful) I stumbled upon an interview with the Trevor Corson last week (the day our report was released) without using keywords such as “lobster,” “fishing” or Maine.
(about 38 seconds in)
He correlated the sharp drop in Lobster prices this year with the bankruptcy of Iceland via subprime lending. It’s worth a listen.
And here’s his related piece in The Atlantic magazine. Fascinating.
Basically, lobster prices have maintained a high price level for the past decade until the past year because a large portion of the catch was diverted to processing plants in Canada keeping supply of fresh lobsters restrained. These plants were mainly financed by Icelandic banks, who were ultimately driven under because of the subprime mortgage meltdown and now abundant production of lobsters are driving down the price for us.
Oversupply of housing driving down prices correlates to the “V-notch” technique to increase the lobster population. I won’t even bring up the V-shaped recovery“, since I’m still full from our lobster bake.
Somehow it all comes back to lobsters.