The Round Rock Wealthbuilder's Meetup Message Board › ZeroHedge: Lumber Is Limit Down (Again)
|Dan Caldwell - Wea...||
Round Rock, TX
The Baltic Dry Index, which tracks ocean freight rates and is widely used as a barometer of global economic vitality, is down to 900 from a high a few years ago of 11,000. Now we're seeing lumber prices falling off a cliff, while inventories rise.
"Lumber . . . has been falling now for two months in a very 'non-housing-recovery'-like manner. Of course, when Lumber prices are rising, everything is bullish and it merely serves to confirm the exuberance and bias to optimism that we should all have. However, just like the Baltic Dry Index, when it's falling it is a bearish sign that the market is over-supplied . . .two-month lead over stocks signaling the equity market may well be a little ahead of itself, it seems the supply-demand balance is off in the construction materials business . . ."
Dan's Note: The stock market is being fueled by liquidity injections chasing yield. The foundations of robust economic growth - demand for lumber, cement, copper, iron, etc., and rising shipping rates are all absent warning us the the "green shoots" arguments are without merit. BUT . . . as long as Central Banks continue to print money the markets will grind higher. JMHO