Post suspension Reserve Asset flow displacing credit flow to lumber industry.... unit price increases... as commercials are normally short...
Fed repo volumes vs. lumber
— MagnusCoin (@MagnusMacro) May 5, 2021
🤔 pic.twitter.com/DLDG7lnDEd
Post suspension Reserve Asset flow displacing credit flow to lumber industry.... unit price increases... as commercials are normally short...
Fed repo volumes vs. lumber
— MagnusCoin (@MagnusMacro) May 5, 2021
🤔 pic.twitter.com/DLDG7lnDEd
4 comments:
How about in plain, simple English, Matt.
In a credit contraction the price is going to move opposite the direction that the previous finance was being used...
In a non speculative market like lumber the market is typically short ( commercials selling their production forward) so the finance was enabling a short position... so if credit is then removed the price will move up towards the longs...
Bonds right now have built up a big speculative short position so if credit is removed then the price will start to move towards the longs...
Lumber may eventually go “liquidation only” in here..,
Thank you.
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