The federal government has got a commitment to bail out housing. I mean housing is just so politically sensitive. It's the American dream. Any politician has got to be for motherhood, apple pie, and everybody owning their own home. Of course, that's one of the things that got us into this mess. We were making houses available, four bedroom houses for people that couldn't afford chicken coops.
The government criticized the private sector for having these off-balance sheets for banks, where they, in effect, didn't have to have as much capital, because these things technically weren't on their balance sheets.
Well, the government's doing the same thing, because they can, in effect, put this stuff in the bad debts and so on, leave them in Fanny and Freddie. And these guys are very good at creative accounting, so they can kick the can way down the road, in the current expression. And so, the federal government doesn't have to recognize that on its deficit. But it's got the liability there. There's no question. It's just going to be spread out over time.
Housing construction drops 5.9 pct in February
"Economists characterized the February dip as weather-related although they said any housing rebound this year is likely to be modest at best, given a variety of headwinds from record home foreclosures to high unemployment."
Don't like the number - it's weather related.
Simply follow the money. Money will position itself in sympathy with technical strength when housing is ready.
Lumber Futures Continuous Contract and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:
Source: forbes.com
Source: yahoo.com
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