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The Most Economically-Correlated Commodity Is Flashing Red
While Crude Oil and Dr. Copper are often cited as economic indicators, as @Not_Jim_Cramer notes, in fact Lumber prices are the most correlated with ISM and GDP of all industrial commodities. That is a problem. Lumber prices are tumbling and are breaking the 6-year up-trend that has 'proved' the recovery. With no CCFD manipulation and less financialization than crude, perhaps Lumber is the real canary in the economic collapse coalmine...
Lumber is the most correlated to ISM and GDP of all the industrial commodities... and that is not good for the US economy...
Which is a problem as Lumber prices are at a precarious position...
Charts: Bloomberg and @Not_Jim_Cramer
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The contractor who's doing my house says it's the only work he's had in a while
If you don't have firm wood, things ain't so good.
OT: if my wife was Giselle Bunchen, my balls would be deflated too.
The down votes just don't get it.
If you have an erection lasting for more than four hours, call your friends and brag....
now, with significantly less financialization than other instruments, this is one chart where the technicals may have more merit
this puncture of the lower cone is one worth noting
Lumber, steel, copper are down... gee there might possibly be a hint in there somewhere.....
Keynesian solution to falling lumber prices: "BURN THE RAINFOREST!"
Somewhere old Treebeard is turning in his grave.
The Keynesian solution is actually to pay the lumber industry with subsidies or force them out of the lumber business altogether. Which causes them to stop replanting new trees for lumber because there's no profit in it, which causes a fabricated shortage and price inflation. Which leads certain other people to cut down a rainforest because of the high price of lumber.
But Mr o said things is good. What wouldya rather believe?
Not just good, but the "shadow of crisis has passed" and "everything is awesome!" (*cough*).
Houses built when the U.S. had manufacturing (pre 1972) to be demolished and/or burnt to the ground.
Break a window! Love, Dr. Paul Krugman - Bearded PhD Potato.
An elderly Jewish man goes into a Catholic church and starts talking to the priest. " Father", he says, " I'm 63 yrs. old and I'm having sex 3 times a day with a gorgeous 25 yr old blonde woman!" The priest looks at him and says, " I don't understand why your confessing to me, you're Jewish!" The old man says, "Are you kiddin', I'm telling everybody I see!!!".
Elderly
63 yrs.
WTF
I'm damn close to "elderly" then.
Let me fix that for you. " A middle aged (but almost elderly) Jewish man..."
nah, just CALL MORE LADIES...
I remember erections.
Purists.
Yes, about to say that chart gives me a woody
Cougar says if you don't have cheap hardwood things ain't good
Anyone else get a woody reading this?
http://m.youtube.com/watch?v=T70-HTlKRXo
Excellent. I'm hoping the price plummets by spring, just in time to throw up a shack on 20 acres of WV bottomland in a county that doesn't even have a traffic light.
I thought I was the only one here who lived in a county without a single traffic light. (Not literally true - there's one in the next town over that still flashes yellow - no idea why.)
My original hometown still functions on four stop signs.
WV bottomland??
Does the sun shine between October and March? Drove thru
there once, didn't see no Cumberland Plateau,
but mountains look like Belgium waffles!
I called my local plumber, they were at my door 5 minutes later. Small town, but that is symptomatic of a lack of jobs on the books. My contractor, the local areas most busy and best, is building a couple house this winter, both are for familes with one or two teachers as breadwinners. He no longer builds spech homes, though before 2008, this was what he did whenever contracts dried up. They always sold fast. He built a spech home in 2012, and sold it to, you guessed it, a teacher. In small town American, I can assure you, teachers have the new houses and new cars. That is just the way it is.
American teachers thrive on the rising school property taxes levied on local homeowners.
As all other parasites, the US public school teachers will vanish along with the home owners they feed upon.
U.S. public school teachers are not worth their weight in dog turds. So I say let them vanish. F...ing parasites.
By counting the down votes you will know how many public school teachers are on ZH. Shouldn't be too
many as most of them can't read.
Even worse are the school administrators who pull in $200K
Correct - Adminstration is 45% of all educational costs. They don't like to teach and promote their buddies....
I am no fan of public education but I downvoted you because of your simplistic statement.
The fish stinks from the head so quit focusing on the ass.
Who instituted the public school system?
I don't get the teacher hate. Sure, there are some lame ones.
But look at what they have to deal with...evaluated by standardized test results, often stuck with a mandated curriculum, and in many cases trying to teach students with parents that just see public school as free babysitting and don't make an effort to support the learning process at home.
And they put in a lot more hours than just when the school is open, especially when you get into the upper grades with papers to read/grade.
Not a teacher, but have known some, and it is a lot of BS, bueracracy, rude students, assigned extra work for after school/weekend events, plus most teachers have to spend money out of their own pocket for classroom supplies. That is why so many quit, usually good ones who really try and give a damn about the kids, but just get beaten down by it all.
Their work makes an overall improvement in the community, unless you think that having citizens that can read, write, and calculate has no value.
So if you want to hate on the administration, the mandates (common core), the curriculum (presenting creationism as equally valid, historical distortion), how schools are funded, or even on teachers' unions keeping crappy teachers on the job, fine.
Hating on teachers as an entire profession makes about as much sense as hating on plumbers.
Well said. +1
For what it's worth, I agree that there is a lot of blanket, irrational, and misguided hate on teachers as a whole.
Now, about those f@#king plumbers...
Two teachers just down voted you!
Tool
" teachers have the new houses and new cars."
Thought you might say cops too, but no one knows the cops
anymore.
In 'small town America' these days, about the only people with nicer houses/newer cars are on a .gov funded payroll, or work in healthcare on the higher end. Aside from those, there are only 'McJobs'. Generally speaking of course.
timber?
Logging has been slowly dying in BC, Canada for several years. It is hanging by a thread there.
When the housing bubble pops, it's game over.
Hey... housing is 24% of the Canadian economy now and has kept new mortgage debt based GDP growth purring for the last 8 years or so since manufacturing took the big dirt nap in '08.
Canadian M1 has been quietly increasing at a an annual rate of over 10% for the past 5 years now. What could possibly go wrong?
Too much debt .
' The mortgages Canadians have shouldered to buy those houses helped send the ratio of household debt to a record 162.6 percent of disposable income in the third quarter. '
http://www.bloomberg.com/news/2015-01-21/bank-of-canada-cut-shows-housing-another-worry-from-oil.html
This is bad for them. In any economic down turn, it is always the levered up who can't wait out the down turn. Interest payments wait for no man. You just can't hunker down, cut back and out wait job loss or pay cuts if you have a big mortgage hanging over you.
If your currency collapses...
WHEN
It's always just a question of "when"...
The BOC cut will keep interest rates down and building activity up and the lobotomised citizenry smiling during the elections this fall.
The oil price plunge has been a disaster for the dollar (and the West) so this good news is much needed.
Stop making toothpicks immediately!
Hooray, we'll all return to the woods! It was never a good idea to get off those trees, as Douglas Adams noted...
There's a lot of slack with the ~$2.5T in excess reserves. When the slack comes out, you'll swear that they were bungee jumping with good, solid hemp rope.
Omar Suarez takes a helicopter jumping lesson...?
Soon we'll see a chart that has decoupled from gdp and lumber
Demand for lumber would be very strong if they would turn it into paper and then use the paper to print up a bunch of GLD certificates and then use the paper gold to satisfy Germany's request for their gold. Two problems solved at the same time. Even Jim Cramer would have to shout! BOO-YAH!
Don't worry. The guys on Fast Money will soon buy up every Lumber futures contract. They are the smartest and strongest guys on the planet.
Maybe Janet buys some firewood as well. And poof, it's gone.
This may be the next best bet for the timber industry.
http://www.pelletmilloutlet.com/pellet_%20mill_small_diesel.html
Pellets for $4,000??? Um.... just no.
Somebody once said; Sub-Prime is something you buy at the grocery store for dinner.
Hear tell it's the only kind ya can get on WIC.
Das what dey say, anyhow.
I got a recipe for turning tough beef into tender meat... tastes good too! (I grew up in a wuking class neabahood...)
Is it called ground beef?
Sub-prime or past prime?
http://finviz.com/futures_charts.ashx?t=LB&p=h1
100% Bullish to me
Depends on your point of view:
http://finviz.com/futures_charts.ashx?t=LB&p=w1
Nonsense.. i listened to obama last night and he basically said we're in the Midst of a Fucking Full Tilt Economic RECOVERY!!!!!! (out from the shadows of badness)
Hurry Yellen, Evans,Bulltard, Dudley, Williams and Rosengren start QE 4 at $200 billion/month months before planned.
That should start ripping stocks upward again. It's the only thing that matters to the Federal Reserve these days.
It doesn't matter if it clobbers the 99%.
QE wasn't designed to fix the markets, it was designed to STALL the markets, while the wealthy pulled their money off the table, consolidated, and waited for the liquidation of assets at fire sale prices, which they could buy up with fresh fiat cash (read loans at 0% interest).... Essentially they pulled a curtain over the market while they did the proverbial.
Love those fancy red trendlines.
I'm beginning to think this is no bubble popping, but that this is a plain old fashion depression.
Bubble vortex, get with the times man!
We are in the contraction phase of trickledown economics, where the wealthy have loads of new money to borrow at 0% interest, to buy up all of the assets being thrown at the market at fire sale prices, and that means they get a whole lot more for a whole lot less, and then of course things will once again rebound, but that's where those who couldn't buy everything cheap with free money, will have to pay the new price, which will be adjusted for inflation of course!
See how it all works now?
http://www.zerohedge.com/news/2014-12-02/how-goldman-sachs-became-broke-...
yes a (D) depression! i know obama just said it was going Great.. but.. he was Lying his ass off..
He said the shadow of the recession has finally passed, with the sun shining at his back.
well according to that chart, if lumber futures don't go down from here, they will go up from here. And vice versa.
Yup, time for me to head to the ole lumber mine.
Timbehhhhhr...!
Memo to the meglomaniacs meeting in Davos this week, this is what happens when you suck up over half of the worlds net woth, and want even a bigger straw to suck up some more...
just last june we were at these levels. more to it than a down trend. lumber is volitile. period. if 300 breaks and downtrend resumes, hmmm, maybe sumting up(or down)...go to finviz if you give a shit...
that said it could be another tree on the camels back...
I had some bar whore come back to my place this saturday and I railed her too hard(we were both wasted) and broke my damn bed. It's a platform bed with wood frames underneath my mattress, that you just lay on. Well, anyways, I had to go to home depot to replace those pieces that broke and I must say, I was pretty impressed at how cheap the wood was. My wood cause my bed wood to break but thanks to cheap lumber wood, it was actually a fun little project.
Chiggers, Chinch Bugs....
" you didn't cut down that tree."
@Lumberjack
I'm a lumber buyer. It's winter in the building world for much of the country, which equals low demand, and it happens every January. Futures is touching lows that they previously hit last spring,and then it rebounded. The Eastern Canadian market is not off that much since November. By early February yards will begin buying for the Spring building season if they think the price is right. If it keeps heading down or stays low through to March, then it might mean something. As of now, it could be just a temporary down or a long term trend down. Time will tell.
I am a "mixed woods" timberland owner in the NE. The prices for high quality hardwood have been in the toilet since 2007 - prices for cherry, rock maple and oak.
It take a minimum of 80 years for a hardwood tree to grow to semi-maturity with barely 25% of the stems producing quality material. In 2005, I sold cherry tree logs to a lumber buyer, who paid top Dollar and resold them to mills in Taiwan and Japan.
The Lumber Chart shows the prices for softwoods, which are milled into dimentional products for framing and millwork, with lower grades used for plywood. That is volume production closely related to the construction of residential structures in the US and Canada.
Hardwood - used for flooring, furniture, cabinetry and other built-ins - reflects the demand for expensive items. That market is very regional and tiny compared to the "lumber market" for softwood.
All I can say is that the prices offered for hardwood are crap and have been so for more than 6 years. I can withhold my hardwoods from market. Others can't - they need saw log income to pay real estate taxes and insurance for their forest.
This is written from the perspective of an owner of forestland. Timber is something that you cut once in your life time on the same land. You are subject to the ravages of weather (like trees blow down - windthrow); disease; fire; pestilence; and other eventualities of nature. And, man-made disasters caused by government - regulation and taxation - are barely tolerable.
Persons like me don't leverage their investments; bunker bullion and cash; and just keep on trucking.
Will be cleaning up after my logger this year with my excavator - piling slash for the fires to be lit after the November snow.
Good perspective, thank you for sharing.
Although I'm not a contractor, I've built several commercial facilities over the years. One thing I've noticed in the past decade is the overall decline in lumber quality. In my area, it's all douglas fir and douglas larch. Ten years years ago, the lumber was of excellent quality, regardless of the originating mill. Now, nearly every 2x4 I get ahold of literally flakes with just a little coaxing, splits readily, features knots galore and warps excessively when left sitting for a week. That's No 2 grade, even some structural select. I've complained. What I've been told is the national forestry gestapo is forcing the lumber companies to cull younger and younger trees. I see it as nothing more than inflation being baked into inferior product quality for the same price. If price can't rise, then quality shall fall.
It's practically against the law to cut down a tree in the U.S. In Colorado, the new California, they only burn down forests full of usable lumber because people are just a virus on this earth, don't ya know.
Yep. You can see it on the end grain. I'm not a contractor, but ripping out old 2x4s and comparing to the several hundred I bought over a few years at HD and Lowe's, it's obvious. I just thought it was a big box thing.
GMO trees....
Why would US vote for a dumb black muslim
General Contractor I know is working as a maintenance man at a drug and alcohol rehab center. Grouchy F'ker.
If you like your tree, you can hug your tree
if you like your tree
cut the one next to it down
and stuff it in the wood stove..
into the abyss with king darkie telling us we're racist if we disagree with anything he says. what else is new?
contractors in NY are over priced, over rated, and seem to have more work than they can handle
Same here in Mass in most towns north of Boston and most of them have an expensive illegal drug habit (Oxys or Heroin) to pay for as well as well as payments on their multiple personal Ford F350s
Same here in Mass in most towns north of Boston and most of them have an expensive illegal drug habit (Oxys or Heroin) to pay for as well as well as payments on their multiple personal Ford F350s
You still live in the NYC metropolitan area?? Horrible quality of live if you are still making in the 5 figures (per person)... why anyone still lives in the greater NYC metro area on a $70,000 a year salary (per person) for example is something I can't understand.. And by the way all those wonderful things in the NYC area that people stay for (Yankees Tickets, Jones Beach, seeing Giants game) are ONLY FOR PEOPLE making in the six figures.
You still live in the NYC metropolitan area?? Horrible quality of live if you are still making in the 5 figures (per person)... why anyone still lives in the greater NYC metro area on a $70,000 a year salary (per person) for example is something I can't understand.. And by the way all those wonderful things in the NYC area that people stay for (Yankees Tickets, Jones Beach, seeing Giants game) are ONLY FOR PEOPLE making in the six figures.
Funny (or not so) how you never hear lefties complain about hemp legalization. Perfect substitue for lumber, billion dollar industry, and as potent as lawn grass. Founding Fathers were for it, so now terrorism?
This is a tangent point, not advocating hemp 2x4s