Posted on 06/23/2010 2:19:33 PM PDT by blam
Lumber Just Keeps Getting Crushed, Now Officially A "Reverse V"
Joe Weisenthal
Jun. 23, 2010, 4:30 PM
The horrible housing numbers has been bad news for lumber prices, something we've been paying close attention to lately.
Futures were down again 3% today, and have almost completed a full "reverse V," returning to crisis-days levels.
Image: FinViz
(Excerpt) Read more at businessinsider.com ...
Really? I went to Lowes this past weekend to price 4x8 sheets of oak plywood: $50/sheet! It was $34/sheet a year ago.
I remember lumber at $550 per thousand bd ft circa 2005.
Mister Copper is getting sick also.
When blood is in the streets, time to buy?
If you are fortunate enough to have money you can afford not to see again for 5+ years, this might be a time to consider lumber concerns and new-home concerns. A play on both is Weyerhaeuser (NYSE: WY), which owns 100% of Pardee Homes.
(No, I don’t own any WY, but I am actively considering it. I have been waiting first for more “shoes to drop” like today’s new-housing numbers.)
Someone better tell the Home Despot. I was there today and 1x6 fence pickets were going for 1.20. They were .99 not long ago.
They have recently divested much of their "peripheral" businesses (don't know if Pardee was one) and re-invented themselves as, essentially, a REIT.
They are the largest private landowner in the US with 7million acres of trees. They also have 20million acres in Canada under 99yr lease with all logging rights.
They are CLEARLY worth more, in sale, than their stock price and have a couple of levels of "poison pills" in place to prevent hostile takeover due to that fact.
Their only problem is DEBT...they borrowed a lot of money to buy Willamette, outright, a few years ago.
Still, with their collateral they will have no problem refinancing any debt coming due in the next few years.
And, those trees that aren't converted to lumber or paper today just keep getting bigger and bigger and bigger. They can leave them growing until prices return to "good" or better.
Buy the next dip. Hold.
Prices go up faster, and stay up longer, than they go down. It's a law.
Those plywood prices reflect inventory they bought 4 weeks ago. Those prices are going to drop quickly.
Pray for America
ping
It’s not as bad as you think. The timeline is too short.
see: http://futures.tradingcharts.com/chart/LU/W
“Prices go up faster, and stay up longer, than they go down. It’s a law.”
It is, actually. Basic economics.
People buy quicker with inflation (because it will be more expensive tomorrow).
People hold off as prices deflate (because it will be cheaper tomorrow).
You see this with any commodity. There is a distinct volume shift in goods sold.
Boy, don’t I know it.
The new pollution rules are going to put cut/skid/haul, etc cost up into the $350/k range. I think I’m going to get left holding the proverbial bag.
McChrystal was right. Too bad he said so.
Do todays actions give Petraeus a demotion??
Technically yes. He was CentCom commander.
There is more going on. Has to be this is just too weird.
I am out FR is slower than a dog and razor blades here to day!!!
Talk later.
Technically yes. He was CentCom commander.
There is more going on. Has to be this is just too weird.
I am out FR is slower than a dog and razor blades here today!!!
Talk later.
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