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Thursday, May 6, 2021

Fed RRP vs. lumber price

 

Post suspension Reserve Asset flow displacing credit flow to lumber industry.... unit price increases... as commercials are normally short...





4 comments:

  1. How about in plain, simple English, Matt.

    ReplyDelete
  2. 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...

    ReplyDelete
  3. Lumber may eventually go “liquidation only” in here..,

    ReplyDelete
  4. Thank you.

    https://www.sparknotes.com/shakespeare/

    The full text of Shakespeare's plays and sonnets side-by-side with translations into modern English. No fear Shakespeare is available online and in book form at barnesandnoble.com.

    ReplyDelete