The  US economy and markets continue to sway, dip and rise, with each new  piece of news from Europe and Asia. Compounding the volatility in the  markets are the political bickering in Washington DC.

The Markets: Hope  for a real solution to Europe's ailing economy lifted U.S. stocks  Thursday, after European Central Bank president Mario Draghi said the  central bank would do whatever it takes to preserve the euro.

The  Dow Jones industrial average rose 212 points, or 1.7%, the S&P 500  added 22 points, or 1.7% and the Nasdaq gained 39 points, or 1.4%.

http://money.cnn.com/2012/07/26/investing/stocks-markets/index.htm?iid=A_INV_News

US Jobless Claims: The  number of Americans applying for unemployment benefits dropped by  35,000 last week, a figure that may have been distorted by seasonal  factors.

The Labor  Department said Thursday that applications fell to a seasonally adjusted  353,000. That's down from a revised 388,000 the previous week and the  biggest drop since February 2011.

The four-week average, a less volatile measure, declined 8,750 to 367,250. That's the lowest level since the end of March.

http://indystar.com/article/20120726/BUSINESS/207260356

Food Prices: On  Wednesday, the government said it expected the record-breaking weather  to drive up the price for groceries next year, including milk, beef,  chicken and pork. The drought is now affecting 88 percent of the corn  crop, a staple of processed foods and animal feed as well as the  nation’s leading farm export.

The  government’s forecast, based on a consumer price index for food,  estimated that prices would rise 4 to 5 percent for beef next year with  slightly lower increases for pork, eggs and dairy products.

http://www.nytimes.com/2012/07/26/business/food-prices-to-rise-in-wake-of-severe-drought.html

Mortgage Rate Falls: The  average rate on the 30-year fixed mortgage fell again, this time  dropping below 3.50 percent for the first time on records dating back 60  years.

Mortgage buyer  Freddie Mac said Thursday that the rate on the 30-year loan declined to  3.49 percent. That's down from 3.53 percent last week and the lowest  since long-term mortgages began in the 1950s.

The  average rate on the 15-year fixed mortgage, a popular refinancing  option, dipped to 2.80 percent. That's below last week's previous record  of 2.83 percent.

http://hosted2.ap.org/APDEFAULT/3d281c11a96b4ad082fe88aa0db04305/Article_2012-07-26-Mortgage%20Rates/id-53e0f68bf67243ca98bd66117324c6a0

Commodities: Consumers  can expect to pay more for beef, poultry and milk, as the worst drought  in 50 years spreads across the Midwest, destroying crops and sending  corn and soybean prices spiking.

The  U.S. Department of Agriculture said Wednesday that meat prices would  rise significantly, with the consumer price index for beef and veal  expected to gain between 3.5% and 4.5% this year.

Scorching heat has caused crops to wilt, sending feed prices higher and prompting many ranchers to reduce their herds.

Meanwhile,  corn prices for December delivery, the most active contract, rose as  high as $7.96 a bushel Wednesday. That's still just about a nickel shy  of the record high set in June 2010. The front month September contract  continued to trade above $8 a bushel.

Still, prices are up nearly 50% over the past three months.

And soybean prices have also been on the rise, gaining 25% since early June.

Last  week, Secretary of Agriculture Tom Vilsack said 78% of this year's corn  crop was in drought-impacted areas, and 77% of the soybean crop was  being threatened.

Poultry prices will be the first to feel the effects of the drought.

The USDA is forecasting a 3.5% to 4.5% jump in chicken and turkey prices this year.

http://money.cnn.com/2012/07/25/investing/corn-food-prices/

Duke Energy: Standard  & Poor's says it has lowered the credit rating for Duke Energy  Corp., citing the utility's lack of transparency in hiring a new CEO.

The  move by S&P follows news of a shareholder lawsuit using sworn  testimony by Duke Energy executives and directors to support claims that  investors were misled by a surprise shuffle of top executives.

Duke stock is down 6 percent since the merger.

http://www.wthr.com/story/19116693/standard-poors-lowers-duke-energy-credit-rating

Fed Easing?: Everything  that happens in Washington these days is politicized, so it's  reasonable for investors to wonder if a third round of quantitative  easing by the Federal Reserve, if it comes, might be timed to help  President Obama win reelection in November.

But  that might be backward logic. If the Fed eases again, as seems  increasingly likely, the stimulative effect could be so short-lived that  it has completely worn off by the time voters head for the polls in  November. If easing happens soon, it could even leave markets in a  downward swoon by Election Day.

http://usnews.com/news/blogs/rick-newman/2012/07/25/more-fed-easing-could-hurt-obama

China Making Its Move?: Chinese  direct investment in the United States could hit a record high in 2012,  according to a new research report released Wednesday.

Total  Chinese foreign direct investment in the U.S. is on pace to reach at  least $8 billion this year, according to the report from research firm  Rhodium Group.

http://money.cnn.com/2012/07/25/investing/china-investing-us/

Economists Tout 6 Policies: Don't expect anyone in government to seriously consider any of these policies.

One: Eliminate  the mortgage tax deduction, which lets homeowners deduct the interest  they pay on their mortgages. Gone. After all, big houses get bigger tax  breaks, driving up prices for everyone. Why distort the housing market  and subsidize people buying expensive houses?

Two: End  the tax deduction companies get for providing health-care to employees.  Neither employees nor employers pay taxes on workplace health insurance  benefits. That encourages fancier insurance coverage, driving up usage  and, therefore, health costs overall. Eliminating the deduction will  drive up costs for people with workplace healthcare, but makes the  health-care market fairer.

Three: Eliminate  the corporate income tax. Completely. If companies reinvest the money  into their businesses, that's good. Don't tax companies in an effort to  tax rich people.

Four: Eliminate  all income and payroll taxes. All of them. For everyone. Taxes  discourage whatever you're taxing, but we like income, so why tax it?  Payroll taxes discourage creating jobs. Not such a good idea. Instead,  impose a consumption tax, designed to be progressive to protect  lower-income households.

Five: Tax  carbon emissions. Yes, that means higher gasoline prices. It's a kind  of consumption tax, and can be structured to make sure it doesn't  disproportionately harm lower-income Americans. More, it's taxing  something that's bad, which gives people an incentive to stop polluting.

Six: Legalize  marijuana. Stop spending so much trying to put pot users and dealers in  jail — it costs a lot of money to catch them, prosecute them, and then  put them up in jail. Criminalizing drugs also drives drug prices up,  making gang leaders rich.

http://www.npr.org/blogs/money/2012/07/19/157047211/six-policies-economists-love-and-politicians-hate

From the Cornfield, this election will be centered dead square on the economy, jobs and the unsustainable national debt.