Lobsters, Iceland and Subprime Mortgages

Lobster prices are at a 20 year low, in part due to consumers tightening up on spending in a down economy.

But there is another factor contributing to the lower prices, Iceland.

From USA Today...

The price of Maine lobster, which accounts for 80 percent of the U.S. catch, is tanking. As always, the problem boils down to supply and demand. But these days it's a bit more complicated than usual.

The recent crisis in the global financial system resulted in lines of credit being cut off to several lobster processors, including some in Canada who have relied on Icelandic banks that have failed.

More than half of Maine's lobster harvest is typically shipped to Canadian processors. But this year is hardly typical.

Jim Wilson, a professor of marine science and economics at the University of Maine, is astounded how the Maine lobster industry is being slammed indirectly by the mortgage crisis, Wall Street derivatives and bank failures in Iceland.

Who would have thought that the price of lobster would be indirectly related to sub-prime mortgages...amazing.