“Sneaky” etc.

Further to Monday’s post, Ben Parfitt’s opinion piece has legs. No doubt use of the word “sneaky” in the editor’s headline has evidently raised a mini furor across social media channels. Even Forests Minister Steve Thomson has offered a rebuttal today, calling Parfitt’s op-ed “speculative and misleading”. His published response is available here.

In other news, The Wall Street Journal asks will Canada’s next boom grow on trees? These stories of “surging demand and prices for lumber” have been mainstream for some time. Volatile markets this week might have some traders asking if it’s time to tweak the theme. What could be considered breaking news in the WSJ piece however, was one economist’s expectations for new sawmills to be built – and shuttered ones to come back online – in B.C. In the face of politics heating up over initiatives to find more timber supply in B.C., some might wonder if the notion is a little out of touch.

Who blinks first?

Within the ups and downs of lumber market volatility, there seems to be acknowledgement that the macro factors at play point to positive corrections in U.S. housing. Would this have the Chinese watching very closely the market dynamics in the U.S., particularly at a time when lumber prices are experiencing a pullback?
In the U.S., resurgent demand is expected to continue. In China, import demand is triggered at a price. Who blinks first?

Liberal License?

Back in October, Forests Minister Steve Thomson stated “Now that the mountain pine beetle infestation has mostly run its course, it is the right time to update our forest inventory and reforestation plans” (source). Just a month later however, he reportedly admitted “there could be a snag” regarding that commitment (see Taking Inventory). Other elements of the provincial government’s action plan to find more timber are reportedly moving forward more quickly. Over the weekend, concerns were expressed over a new bill involving the conversion of volume-based licences to area based licences. Describing the bill as “disturbing”, resource-policy analyst Ben Parfitt explains how it would “fundamentally alter the course of forestry in B.C.” His politically-charged guest post at The Province is gaining wide circulation on social media sites.


Trouble Brewing

318uRcjAvnL._SL500_It’s true, on special occasions when lumber markets have closed on a Friday afternoon, the Dakeryn traders have together enjoyed an icy amber refreshment or two. But it turns out we’re virtual teetotalers when it comes to the Czechs.
On average, Czechs drink 37 gallons (296 pints) of beer per person annually. That’s the greatest volume of beer consumption per capita in the world. And who can blame them? In the birthplace of Pilsner, beer is apparently not only considered “mother’s milk for adults” – it’s cheaper than water. Changes to favorable pricing structures however, recently proposed by the Czech Republic’s health minister, have tapped bitter feelings. It’s reported here that chatter in the pubs has turned downright frosty. The minister concedes “I can imagine the law we offer may not be successful this year. But, then, maybe next time.”

Tail Wind?

Another report of interest from The New York Times opens with “a funny thing is happening to the U.S. housing market.” It goes on to outline the significant benefits an improving housing market can have on the whole economy. “They will not be just in the direct impact of spending on residential construction — although that is now growing at a faster rate than at any time since 1994 — or on such things as carpet and furniture. They will also show up in state and local government spending, until now one of the largest negatives during the slow recovery. Local government revenue is closely tied to property values through property taxes, and the collapse in home values led to layoffs of teachers and policemen, not to mention others, around the country. Then there is the wealth effect…” Full Story

~ Sawdust ~

  • The organizing committee of the NAWLA Regional Meeting in Vancouver advises this year’s date is set for April 11 at the Vancouver Club
  • Check out The Scramble for Choice Finished Lots Heats Up at Builderonline
  • Further to this post January 4th, the answer is in sight. In all probability there will be no export charge through March.

Home Values

A post on the improving U.S. housing market at The New York Times caught my eye because it is backed by data from the real estate website Zillow.
In real estate markets north of the border, home buyers are not privy to near as much information as that provided in the United States by Zillow. A transparent and refreshingly neutral source, Zillow tells us the near 6% increase in home values last year was a result of tighter inventories, stronger demand, and a slowing pace of foreclosures. Zillow also notes the 6% increase is “greater than the typical appreciation seen in healthy markets.” Their 2013 forecast calls for a “more sustainable” increase of 3.3 percent, typical of average annual housing market appreciation (which is historically actually closer to 3 percent according to their research). “As values rise, fewer homeowners are underwater, or owe more than their home is worth, and may be more willing to put their homes on the market. The increase in inventory, in turn, should moderate future price increases.”

The Untouchables

Frontline’s inside story of the global financial crisis continued last night on PBS.
In picking up where Money, Power, and Wall Street left off (first posted here), The Untouchables is an investigation into why Wall Street’s leaders have escaped prosecution for any fraud related to the sale of bad mortgages. John Doyle at The Globe and Mail most accurately describes this latest segment as “a transfixing, enraging examination of why a small army of greedy-guts bank executives in bespoke suits, the ones who brought down an entire economy, are moseying around, fancy-free, and not in court or in the hoosegow. At the core of the program is an examination of what was at the core of the banking practices that precipitated the crisis – the banks knowingly packaged and sold toxic mortgage loans to investors. These dubious loans should never have been given in the first place. The banks knew that and merrily stepped around financial safety standards to keep the game going.”

While for many The Untouchables leaves little doubt as to the overwhelming evidence of fraud, the assistant attorney-general for the Department of Justice, a squirming Lanny Breuer, confirmed in the vaguest way possible that the banks are “too big to jail.”  It was infuriating to watch.