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Did Bunga Bunga Just Kill The US Housing Recovery As Lumber Futures Plunge

Tyler Durden's picture




 

It seems that as long as lumber futures are rising they are an excellent indicator of the strength of the housing recovery, but once they show any weakness, it is technical or negligible. A few things we know: inventory is epically low; homebuilder stocks are priced for perfection (and missing); NAHB confidence is rolling over; and now Lumber futures have tumbled by the most over the last five days in 15 months. So much for a sustained 'recovery'.

 

 

Chart: Bloomberg

 

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Mon, 02/25/2013 - 12:18 | 3274119 Benedict Farse
Benedict Farse's picture

It's given me wood.

Mon, 02/25/2013 - 12:26 | 3274151 WayBehind
WayBehind's picture

Who needs lumber? Gov will provide shelter for all of us at no cost.

Mon, 02/25/2013 - 12:33 | 3274171 Manthong
Manthong's picture

Lumber , schlumber..


Have you tried buying an overpriced, undersized "2x4" that didn’t look like a pretzel lately?

Mon, 02/25/2013 - 12:34 | 3274174 malikai
malikai's picture

Apparently, Soybean will not be consumed under Bunga rule.

http://blog.quantsig.net/2013/02/25/soybean-3/

Mon, 02/25/2013 - 12:41 | 3274181 hedgeless_horseman
hedgeless_horseman's picture

 

 

Fence rails are $11.27 for 2 x 6 x 16 pressure treated.  4 x 6 posts are $14.  If you add stain and concrete four rail is at $5.00 per foot...just for materials.

Fuck you, Bernanke.

Mon, 02/25/2013 - 14:19 | 3274491 Peachfuzz
Peachfuzz's picture

Gotta love it. I saw for a living, and I sell for way less than that just to make ends meet. The government and the gas stations that put diesel in the truck make more off my lumber than I do. Everytime.

Mon, 02/25/2013 - 21:40 | 3276118 Squid-puppets a...
Squid-puppets a-go-go's picture

This bubble's bursting: Lumber puncture

just as painful, too

Mon, 02/25/2013 - 15:22 | 3274655 Raymond Reason
Raymond Reason's picture

We build most residential structures in the US out of wood, because it's cheaper than concrete and steel, such as the structures in which most eastern europeans live.  Truth is, only the immediate costs are less.  Have you ever done a google map search for fire stations in your area?  You will be shocked at the number of pushpins, they are nearly as ubiquitous as gas stations.  I would guess the cost of building, maintaining, equipping, and staffing these public sink holes far outweighs the difference in construction costs between wood and steel. 

Mon, 02/25/2013 - 15:25 | 3274675 DeadFred
DeadFred's picture

Finally. I just had to pay $16 for 1/2 inch OSB that cost $7 a year ago. 

Mon, 02/25/2013 - 15:41 | 3274726 PartysOver
PartysOver's picture

Dude, seriously.  Are you going to believe your eyes or the credibility of the gov't.  THERE IS NO INFLATION!

 

Mon, 02/25/2013 - 20:59 | 3276009 de3de8
de3de8's picture

Yep, less for more!

Tue, 02/26/2013 - 19:35 | 3279745 Stuck on Zero
Stuck on Zero's picture

There's no inflation.  Consumers can move into containers instead of homes.  Lumber is sky high but containers (a la BDI) are really cheap.

 

 

Mon, 02/25/2013 - 15:22 | 3274658 MSimon
MSimon's picture

They will build it out of steal.

Mon, 02/25/2013 - 12:29 | 3274158 Edward Fiatski
Edward Fiatski's picture

Well, this will definitely leave a mark.

U.S. Consumer confidence is tom @ 15:00 GMT, along with House Price Index for Dec & Q4.

Mon, 02/25/2013 - 13:34 | 3274359 seek
seek's picture

I'll take the under on confidence, if the number is legit.

I've never seen anything like what I'm seeing now, including '08.

Mon, 02/25/2013 - 13:41 | 3274387 Edward Fiatski
Edward Fiatski's picture

I'm getting the same vibes. Durables probably are going to be ugly as well.

Mon, 02/25/2013 - 12:18 | 3274121 williambanzai7
williambanzai7's picture

Go long Chinese walnuts...

Mon, 02/25/2013 - 14:53 | 3274570 DosZap
DosZap's picture

No it was the INCOME TAX EXEMPTIONS CUTS coming.......................

Mortgage Interest, and Charitable Contributions.

As they see it, ONLY the wealthy ITEMIZE and use those deductions.(THEIR WORDS<NOT MINE)

OT: as an Aside, Obama has been caught using Spambot people on Twitter to inflate the numbers for his GUN CONTROL AGENDA.

Caught by Steve Stockman from Texas.

Mon, 02/25/2013 - 12:18 | 3274122 Cognitive Dissonance
Cognitive Dissonance's picture

One would think lumber grows on trees like fiat.

Mon, 02/25/2013 - 12:19 | 3274126 Super Broccoli
Super Broccoli's picture

the housing market got gang bungaed !

Mon, 02/25/2013 - 12:25 | 3274131 hedgeless_horseman
hedgeless_horseman's picture

 

 

That is odd; I would think we need moar lumber (gallows and bridges) for hung parliments in Italy.

 

Mon, 02/25/2013 - 13:23 | 3274309 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

Whose mistress is that in the middle?

Mon, 02/25/2013 - 13:37 | 3274371 seek
seek's picture

That's Claretta Petacci, Benito Mussolini's babe. One of the rare cases where lynching is a STD.

Mon, 02/25/2013 - 12:21 | 3274133 LongSoupLine
LongSoupLine's picture

Bunga is the fucking stick in the Keynesian bicycle spokes.

I fucking love it!

Fuck you Goldman and Bernanke. Eat Bunga hot steaming shit you fucking dickeared pricks.

Mon, 02/25/2013 - 12:28 | 3274155 Cognitive Dissonance
Cognitive Dissonance's picture

Clearly your mother never washed your dirty mouth out with Mr. Bubbles for such talk. :)

Mon, 02/25/2013 - 12:40 | 3274197 Edward Fiatski
Edward Fiatski's picture

Such talk shows Spirit, such talk shows Character, such talk is needed in these difficult times.

Mon, 02/25/2013 - 13:19 | 3274295 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

This lumber futures action is simply a reflection of the fact that home builders, having for years now observed a national economy supported by nothing more than printed paper, are finally coming around to the recognition/conclusion that their product - newly-built homes - need not be supported by a material as real and substantial - and costly - as wood.

Mon, 02/25/2013 - 13:20 | 3274299 Edward Fiatski
Edward Fiatski's picture

Check all the walls for thickness, if you're purchasing a new home. :)

Mon, 02/25/2013 - 12:45 | 3274209 Wakanda
Wakanda's picture

Well put! 

Never underestimate the PoWeR of word like BuNGa  -  FiSHeS!

Mon, 02/25/2013 - 14:03 | 3274447 Straw Dog
Straw Dog's picture

LongSoupLine

"Bunga is the fucking stick in the Keynesian bicycle spokes.

I fucking love it!"

Love the phrase, so descriptive

Mon, 02/25/2013 - 12:22 | 3274137 bank guy in Brussels
bank guy in Brussels's picture

Bunga to the rescue

Basta to the euro

Pasta for dinner !

Bringing this bitch down is good for the long-term ... short term explosion is what the whole world needs

Mon, 02/25/2013 - 12:24 | 3274143 lolmao500
lolmao500's picture

now Lumber futures have tumbled by the most over the last five days in 15 months

That's it, Bernanke needs to print MOAR to save the lumber industry!

Mon, 02/25/2013 - 12:53 | 3274231 Edward Fiatski
Edward Fiatski's picture

It's the other way around!!!!

Mon, 02/25/2013 - 15:14 | 3274631 mind_imminst
mind_imminst's picture

That is what I expect. Any sharp dips in equities will bring the FED in at 2X, 3X, 4X what they have been printing.

Mon, 02/25/2013 - 12:24 | 3274144 G_T_A_44
G_T_A_44's picture

" A few things we know: inventory is epically low."

 

Easy solution.

 

Release some of the 9MM units in shadow inventory. 

 

Oh wait, what would that do to pricing?

Mon, 02/25/2013 - 12:25 | 3274147 H E D G E H O G
H E D G E H O G's picture

beat me to it 'Horsemeat Man:) i would think a Million RealMan March on washington, equiped with 1,000,000 custom made two X four clubs would help the cause.

Mon, 02/25/2013 - 12:26 | 3274149 DoChenRollingBearing
DoChenRollingBearing's picture

It's all George Bush's fault!

Oh wait, no, it's all Silvio Berlusconi's fault!

No..., wait, it's all Newt Gingrich's fault...  Waaah...?

Mon, 02/25/2013 - 13:27 | 3274320 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

The administration is endeavoring to blame it all on the U.S. Congress, one party in particular.

Oblamer is blameless, always and forever.

Mon, 02/25/2013 - 12:26 | 3274150 bullmarket
bullmarket's picture

That's your definition of a plunge? Bunga!

Mon, 02/25/2013 - 12:30 | 3274161 azzhatter
azzhatter's picture

But...but...but   Sandy!?  Bob Pissani is bullish             How can this be?

Mon, 02/25/2013 - 12:31 | 3274165 azzhatter
azzhatter's picture

Fuck You Bernanke

Mon, 02/25/2013 - 12:35 | 3274182 Shizzmoney
Shizzmoney's picture

The only thing being built these days seems to be the IRS bridges to our collective assholes.

Mon, 02/25/2013 - 12:41 | 3274199 Bungalow
Bungalow's picture

Housing needs another haircut.

Mon, 02/25/2013 - 12:48 | 3274217 orangegeek
orangegeek's picture

Philly Housing Index says the same thing - top is in place and we are in decline.

 

http://bullandbearmash.com/chart/philly-housing-index-falls-hard-breaks-...

Mon, 02/25/2013 - 12:51 | 3274223 AC_Doctor
AC_Doctor's picture

Timmmmbbbbbeeerrrrr, while crushing the green shoots!  False economy, false President, false paper money....

Mon, 02/25/2013 - 13:12 | 3274270 disabledvet
disabledvet's picture

"there's always a bull market in bullshit." and to think Seeking Alpha opined about "the great market surge due to elections." since when are these folks "betting on elections" I thought. We'll see what tomorrow brings of course. Peace in our time? A chicken in every pot? A return to normalcy? Only HERE will you not HEAR any of that. (and yes...Bunga Bunga good...betting on election outcomes bad

Mon, 02/25/2013 - 12:58 | 3274243 rsnoble
rsnoble's picture

This must be related to fuckhead bens housing recovery speech.

Mon, 02/25/2013 - 13:04 | 3274252 GrinandBearit
GrinandBearit's picture

"Are you threatening my bungahole?"

Mon, 02/25/2013 - 13:08 | 3274257 Hongcha
Hongcha's picture

Berlusconi is too wily to play the role of the odd man out, this late in his career.  Unlike in the U.S., he could find himself offed in short order over on 'The Boot'.  He will be brought to heel.

Mon, 02/25/2013 - 13:24 | 3274310 SmittyinLA
SmittyinLA's picture

"Lumber futures plunge" I believe they're still above the artificial prices we maintain for lumber tariffs or still artificially high, our govt really has to work hard to mismanage so many public forests.

Mon, 02/25/2013 - 13:28 | 3274330 Navymugsy
Navymugsy's picture

Wasn't lumber the first thing to crash back in 2006? All of those mills out in the Northwest closed long before housing did the cliff dive.

Mon, 02/25/2013 - 13:50 | 3274416 seek
seek's picture

It was more of a multimonth slide: http://futures.tradingcharts.com/historical/LU/2006/9/linewchart.html

But yes, that pre-dated the big crash by 2 years, basically.

 

Mon, 02/25/2013 - 13:34 | 3274358 Falconsixone
Falconsixone's picture

We use cardboard, glass jars, hot tar and twine and of coarse a nice 4" thick straw floor over dirt. Really a nice house with a lot of space if your intrested give me a call. I'm licensed and insured. 1-800-NEW-HOME for a free quote. We have many new plans and have architects on staff for your custom needs.

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