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Farmers whose families have been working the land for generations should be called in to advise new Wall Street traders every year. Because in farm life is the hardscrabble reality of boom-and-bust cycles. When prices went sky-high for wheat, corn and soybeans over the past years, you did not see growers spending their wealth on fast pickup trucks and fancy overalls; no, they kept telling reporters and economists that this wasn't going to last.

They were right. Wheat, which had hovered for years around $4 a bushel, had risen to $10 and is now flattening at $5; less than the current cost in fuel, seed and fertilizer to grow it. Farmers like Jimmy Wayne Kinder, who held back their wheat hoping to sell at the top of the market, are "kicking" themselves, and demonstrating that they, too, have an emotional connection to their holdings and have trouble letting go even in the face of overwhelming evidence that it's time to sell. As the prices fell, farmers waited for a rebound that never came.

Farmland was hot, too, with speculative buyers purchasing Midwest real estate for prices nearing $1,000 an acre, the record set in the 1970s. Now they're back around $500 and farmers are recalling lessons the traders never have time to learn: patience. If automakers, mortgage lenders, and Wall Street firms could learn this lesson; scrimping and saving in the down economies but not behaving like kings in the boom times; perhaps bailouts wouldn't be required.

It's interesting, too, that the article doesn't mention another reality of the farmers' market forces; as demand for conventionally-grown wheat, corn and soy drops, demand for organically- and sustainably-grown meats, produce and grains is rising. I plan to stand in line at 9 a.m. Sunday morning with my three boys for the chance at paying $60 for an heirloom turkey raised by a farmer I know; I've cut out breakfast cereal and alcohol from my budget so I can pay more at the farmer's market. Perhaps the American economy isn't collapsing, but returning back to a more sensible place; where friendly, interdependent, local, sustainable economies thrive and the global economy is a distant memory.

There have been almost no bright spots during the U.S. economic downturn -- no investor or typical citizen would trade minor pluses for the credit market and economic conditions the U.S. currently faces -- but at least one area of commerce offers some encouraging news.

The nation's average price for gasoline has dropped below $2 to $1.99 per gallon, according to a survey by motorist group AAA.

Technically, the price dropped 2 cents to $1.989 per gallon, but the macro point is the important fact: gasoline prices have fallen at their fastest rate since 1981-1983, when prices declined after the end of the 1979-80 oil shock caused by the Iranian Revolution, which devastated Iran's oil sector.

During that period, U.S. gasoline prices fell from about $1.50 per gallon to about $1.10, or from about $3.50 per gallon to about $2.40 in current dollars, economist Peter Dawson said.

Hence, the drop in gasoline prices this late summer / fall has been a record-setter in percentage terms. "The price drop has been stunning. We've dropped 50%, from an average price over $4.00 a gallon to under $2.00, and we've done it in less than a year. That's just stunning," Dawson said. "Historically, it's taken a year or longer for prices to retreat after an oil shock, and in the case of the 1979-1980 oil shock, several years."

"Valuations for even the best-placed, most well-established companies in the energy space are sitting at levels unseen since the late 1990s when oil prices collapsed to around $10 per barrel," says energy sector specialist Elliott Gue.

Here, the editor of The Energy Strategist looks at Schlumberger (NYSE: SLB), noting, "The firm active in just about every imaginable market and I regard the company as a top-notch indicator of ongoing trends in the oil services business."

"It's clear that there's been some slowing in demand, and the credit crunch has had an impact on the fundamental business. But the reaction in the stock market over the past three months goes well beyond even a worst-case scenario.

"Bottom line: Many energy-related stocks are pricing in a severe recession and recent action in the broader markets is reminiscent of sentiment characteristically seen near market lows. The short-term outlook for the energy patch is much better now than it was during the bear market in 1998 and 2002.

"I regard Schlumberger as a top-notch indicator of ongoing trends in the oil services business and, more broadly, international oil and gas drilling activity. I always pay close attention to what Schlumberger has to say in its conference calls and, as usual, this quarter's call was instructive.

The pirates of Somalia, in making world trade a bit more of a high risk venture, have finally placed their own unsavory hobby in jeopardy. Bloomberg reports that NATO is currently reassessing its operations in the insecure waters off the coast of Somalia. "This hijacking could really change the picture and we could see much more proactive rules of engagement,'' said Hans Tino Hansen, managing director of Risk Intelligence, a maritime security consultant based in Vedbaek, Denmark.

Already, there are at least 15 warships in the region, forming a multinational coalition armed with the intent of calming those pirate churned waters. In the last ten days, India, Russia, Britain and Germany have each engaged pirates in battle. The report from Bloomberg indicates that more warships are on the way to the Gulf of Aden. When considering what is hoped to be a decisive end to cargo ship hijackings by maritime pirates in the region, I say we must use every available means to make those waters safe for world commerce. I don't know about you, but I have always considered the taking of a sea-going vessel to be an overt act of war.

The whole world is eagerly watching to see how this saga shall finally play out. One thing is for sure, the clock is ticking down towards the demise of pirate profitability off the shores of Somalia. At this time, we might take pause to remember the indomitable words of Popeye the Sailor Man, who often uttered this statement when forced to take drastic and decisive action against obviously abusive behavior:

"That's all I can stands, and I can't stands no more."

"During times such as these, I like to focus on big companies with clean balance sheets that pay decent dividends," says Glenn Rogers.

Here, the contributing editor to Internet Wealth Builder reviews his current stock holdings for a trio of global favorites offering upside potential while still allowing investors to "sleep well at night."

"Diageo Plc (NYSE: DEO) is well down from my original recommended price but compared to the overall market they have performed respectably.

"Meanwhile, the company recently issued a statement confirming its previous guidance of profit growth of between 7% and 9% in 2008.

"The company reported that organic net sales grew 6% in the three months to Sept. 30 and that there has been no material change in the financial position of the group during the period. Buy, with a target of $90.

"I have owned Knightsbridge Tankers (NASDAQ: VLCCF) longer than any other in my portfolio and it has never failed to pay a hefty dividend. The stock is currently trading at $17.40, thus yielding an incredible 17.2% based on a quarterly dividend of 75c a share.

In his 30 years studying economics first in China, then since 1989 in the United States, economist David H. Wang has seen it all.

Or at least he thought he had seen it all, he said.

Oil: a $100 plunge

"Oil is just about set to total a $100 fall in less than five months, which is unbelievable. It's hard to fathom," Wang said.

But, if oil, which dropped $3.41 to $49.91 early Thursday, falls $2.64 more, it will have recorded the mind-boggling $100 plunge Wang spoke about.

Oil hit a record high of $147.27 per barrel in July on what analysts then largely argued was an inability of global oil supply to keep up with oil demand growth in Asia, stemming from surging emerging market GDP growth.

However, what we now know, with the advantage of hindsight, Wang says, is that the truly ridiculous $147 price for oil this summer was fanned primarily by a liquidity bubble - - in the form of dollars and a low-interest yen deployed to commodities by institutional investors, among other oil market players. Oil demand played a role, Wang added, "but not to the degree that excess liquidity did, chasing a high-return asset [oil]. Likewise with the weak dollar."

"Seattle-based Plum Creek Timber (NYSE: PCL), the nation's largest private landowner with more than eight million acres, has caught our eye," says Bill Martin.

In his BullMarket.com advisory, he explains, "Earnings have been stunted in recent quarters by the housing slump, but the company sports a strong balance sheet and an asset base that thanks to nature only gets larger and more valuable as time goes by."

"Plum Creek, which operates as a real estate investment trust, reported surprisingly solid Q3 profit. It posted net income of $69 million, or 40 cents per share, for the quarter ended September 30th, compared with a profit of $59 million, or 34 cents per share, for the same period a year ago.

"In the 2007 quarter, fire losses in Montana forced the company to report a $4 million non-cash expense, or two cents per share, related to fire losses experienced in Montana.

"The company's EPS results topped the expectations of Wall Street analysts by a penny a share. Revenue grew to $414 million, up 2% from $407 million last year. The sales results were a bit short of the consensus of $419.8 million.

OPEC, which Tuesday again lowered its 2009 global oil demand forecast (pdf), is still seen cutting production quotas, but at its regularly scheduled meeting on December 17 in Algeria, not at its special meeting November 29 in Cairo.

Still, the compelling question remains whether OPEC members will comply with existing decisions to lower production, let alone new ones, said economist Peter Dawson.

OPEC problem: production 'cheaters'

"OPEC members are getting into a bit of quandary, and it's one we've seen before, cyclically, in the oil market. States know that if they all cut, their action will support prices some," Dawson said. "The problem has been that historically, some members 'cheat' a little and produce over their quota, thinking their small increase will not affect prices that much, and they will reap extra revenue as a result. When several members do this, the price of oil continues to drop, and so does the cartel's effectiveness."

In the past, cheaters have been small OPEC states, such as Iran, Libya and Nigeria, Dawson said. Oil Tuesday fell 37 cents to $54.58 per barrel. Oil has plunged more than 60% since hitting a record high of $147.27 per barrel this summer, as both long-term investors and short-term traders exited long positions in the markets.

The irony of it is that food prices have dropped from record highs in the summer to fairly reasonable levels, but that could put some farmers out of business. Welcome to the world of deflation.

According to The Wall Street Journal, "A slowdown in new farmland development could hinder efforts to ease the global food shortage. Earlier this year, those shortages triggered riots from Haiti to Egypt to Pakistan and raised fears of permanently higher prices for basic foodstuffs."

Everyone assumed that a recession would move food prices lower or at least keep them at current levels. Budgets that were strained by high commodities prices might gets some relief which they will need as employment and consumer prices fall.

The problems may be especially acute in the US where some farmers have been making a fortune off corn due to feed demand and ethanol. Many of those farmers decided to expand, take on more debt, and buy new equipment. The price of corn has dropped like a rock over the last five months. How are those farmers going to keep up with the debt service? In many cases, they won't.

Get ready to pay more for an ear of corns and a loaf of bread. Farm failures are sending food prices back up.

Douglas A. McIntyre is an editor at 24/7 Wall St.

"For more than 180 years, Consolidated Edison (NYSE: ED) has served the world's most dynamic and demanding marketplace: metropolitan New York," notes Dennis Slothower in his Stealth Stocks newsletter. Here, he explains why ConEd is his "stock of the month."

"Con Edison, our latest 'stockj of the month' provides electric service to about 3.2 million customers and gas service to approximately 1.1 million customers in New York City and Westchester County.

"It also provides electric service to 300,000 customers in southeastern New York and adjacent areas of northern New Jersey and eastern Pennsylvania.

"Con Edison's competitive energy businesses participate in segments of the electricity industry that are less comprehensively regulated than our regulated businesses.

"These segments include the operation of electric generation facilities, trading of electricity and fuel, sales of electricity to wholesale and retail customers, and sales of certain energy-related goods and services.

"I can't tell you how tough it is to find and recommend a company based on my strict selection criteria. I have never seen so many stocks in my universe in steep down trends. While there are some good companies paying high dividends, their stocks are in a free fall.

"Con Edison is a strong utility company that I feel confident will continue to pay a nice fat dividend. The 10-year U.S. Treasury bond is yielding about 4%, while Con Ed's dividend is yielding 5.3%. We get a good combination in Con Ed: a high yield and possible increase in the stock price."

Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.

With oil prices cut in half and gasoline near (or below) $2 per gallon, is now a good time for the U.S. to end its century-long addiction to oil?

The topic was raised by none other than the 'liberal bastion' of The Wall Street Journal Monday (subscription required0 with energy analysts and policy makers weighing in.

BloggingStocks Monday asked Energy Trader Jim Dietz to evaluate some of the major recommendations discussed.

• Four-day work week: "It's possible, but the best plan would be voluntary, allowing companies to opt in/out and adopt plans that meet their production needs," Dietz said.

• Mandated higher MPG for vehicles: "This is almost certain to be proposed by President-elect Obama, and will likely pass the Congress. It will reduce gasoline and diesel consumption."

• Mandated flex-fuel cars: "Another measure likely to become federal law and it would take pressure off oil consumption."

• Tax credit for fuel-efficient vehicles: "Another oil saver, and it stands a better than 50% chance of being passed by the next Congress."
  

• Federal funds for next-gen vehicle: "This will likely be included in any rescue package for General Motors, Ford, and Chrysler. A next-generation vehicle would be a game-changer, energy wise, but it's years away."

OPEC said it will meet later this month, Bloomberg News reported Thursday, in an extraordinary meeting aimed at propping-up oil prices.

Oil, which traded Thursday afternoon down 66 cents to $55.50 per barrel, has more or less been in free-fall since it became clear about two months ago that both the U.S. and global economies were slowing.

'A veritable sea change in sentiment'

Oil has plunged more than 60% since hitting a record high of $147.27 per barrel this summer, as both long-term investors and short-term traders exited long positions in energy markets. Energy Trader Jim Dietz was one of those short-term longs, who now is decidedly bearish.

"What we have seen is a veritable sea change in sentiment. Less than a year ago there was talk of $175, even $200 oil with spot supply shortages. Now, it's clear $147 oil was a bubble-ish frenzy, and people can't exit their positions fast enough," Dietz said. "There's even talk of an actual decline in global oil consumption in 2009." Dietz added that he is currently short oil, unleaded gasoline, and natural gas, with monthly contracts.

The other major energy commodities also continued their nearly four-month decline Thursday. Heating oil fell 2 cents to $1.81 per gallon, unleaded gasoline declined 3 cents to $1.22 per gallon, and natural gas fell 27 cents to $6.11 per million BTUs.

This post was written by Minyanville contributor Sean Udall.

JA Solar (NASDAQ: JASO) blew its quarter and lowered guidance, and now the group is under pressure.

I don't think I've ever written a positive word on JASO as they are in the middle tier, essentially a jobber for the solar space. The company make various feedstock products to the final product makers, while being dependent on the core technology and "root" feedstock polysilicon from the likes of LDK Solar (NYSE: LDK) and MEMC Electronics (NYSE: WFR). So it has a timing issue and margin compression issue. The company is facing lower final pricing of their products while having locked in longer term "commodity" pricing at higher prices. So its raw costs are not falling as fast as its own pricing.

The poly guys mentioned above and companies like Sun Power (NASDAQ: SPWRA), First Solar (NASDAQ: FSLR) and Suntech Power (NYSE: STP) don't face these pressures as intensely, though that may not matter much today. STP reports on the 20th this month and I think it will give a clearer picture of the space. Meanwhile SPWRA keeps closing significant deals and FSLR reported the best and has little if any of the funding concerns. So for the leaders, it's a question of how low do they go before the long term positives catch up. Meanwhile, a few of the smaller shops like JASO are in a race against the credit crunch because they need to be able to renegotiate some of their longer-term input costs.

LDK and WFR are still companies that I feel are uniquely positioned, as both have a partial oligopoly status as polysilicon suppliers. In the $15's and lower, it's getting to the point where I may again trade around my core position and look for that beta pop on any significant Naz bounce. Also, this stock could move 50% higher and still be exceedingly cheap on almost any value criteria.

There's modest good news on the gasoline front for U.S. consumers, but don't write (or e-mail or text message) home just yet.

Several key oil-producing nations are preparing for the prospect of $45 per barrel oil, indicating these oil exporters believe the price of the world's most important commodity is likely to fall more amid both U.S. and global economic recessions.

Saudis prep for oil's slide

Saudi Arabia, which possesses the largest proved oil reserves in the world, has passed a government budget that's prepared for $45 oil, stratfor.com reports. Meanwhile, Nigeria and Libya have reduced their 2009 oil price forecasts to $45.

Oil, which has plummeted more than 60% since hitting a record high of $147.27 this summer, fell another 48 cents to $58.85 per barrel in Wednesday morning trading.

Economist Richard Felson said the oil price plunge and the gasoline price drop it has created is good news for U.S. motorists, with certain qualifiers. "It is an astounding drop, approaching a $100 per barrel drop, and that has taken pressure off refined energy products," Felson said. "The problem is, if analysts are correct about $40-45 per barrel oil, it implies a slowdown in U.S. and global GDP that will likely mean large layoffs, which isn't good for anyone."

"We are seeing quality names at fire-sale prices, and I think you must take advantage of that," says income expert Nilus Mattive in Dividend Superstars. Here's a trio of favorites.

"Pfizer (NYSE: PFE) recently reported great third-quarter results. The company tripled its profits from the same period a year ago. While last year's results were hurt by a one-time charge, Pfizer is obviously seeing continued demand for most of its drugs.

"I consider the stock dirt cheap, and while there is a slim chance of a dividend reduction, the shares absolutely belong in your long-term income portfolio at this level.

"I feel the same way about General Electric (NYSE: GE). While profits were down 22% this quarter, the company still boasts a AAA credit rating and a very attractive yield. It is a solid long-term income holding.

"Huaneng Power (NYSE: HNP) has been punished along with the rest of China's stocks. But things are going well on the fundamental front. The company increased its power generation 12.7% in the first three quarters of 2008, and revenues gained 36.8% over the same period a year earlier.

"It may post a loss because coal prices remain elevated, but I remain bullish on the company's long-term prospects, and consider it the best dividend-paying Chinese stock to own."

Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.