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Housing Bubble, Interest Rates, Timber Costs; What Has Changed?

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What has really changed in the housing market with regards to timber dumping from Canada, lumber costs since the Professional Building Magazine issue in Sept. 2001. How is this affecting the housing market or the predicted housing bubble burst which was suppose to cripple the economy. We have seen the Federal Reserve raise rates, lumber prices go up, still America was buying up new homes and joining the ownership society faster than at any other time in the history of our nation.

Unfortunately the ease to buy a house was truly too easy judging by the current foreclosure rates and one might wish to ask why should young couples with only two to five percent down be buying a home anyway? That is not fiscally responsible. These buyers will be upside down in these homes in some markets almost as before the ink is dry. In other markets they will be growing equity extremely fast as long as their local market holds out, but when things change; there will be more over all foreclosures. And they cannot realize their equity because they will not be able to sell their homes. If they use the equity to pay off credit cards by re-financing before the prices stabilize they will alleviate high interest rates but have also committed themselves to more over all debt?

With increased costs of interest rates, building materials; if the houses cost an estimated $1000-2000 more, and I am talking about you basic starter home of modest size 1400-2000 square feet; then fewer will qualify to buy a home and chances are those who have not yet bought a home may not be able to secure financing anyway; if they do, they pose a higher risk of loan fall out rates being thrust upon the mortgage arena. Our Commerce Department Imposed a 19.3% countervailing duty on timber from Canada. It should have been 10-14% max and only for 9 months, so US companies could get back on their feet without pissing off the envi-moron-mental-lists (someday I will explain exactly how we came up with that term). Our gross national product has 5% written over the new housing market. This is significant and in 2000, 34% of all the lumber for the new housing starts came from Canada, in 2001 37% and it is expected to be 30% even in 2002 with the newest tariff in place for anti-dumping duty of nearly 40%.

These tariffs are too high and are anti-competitive. Canada should have policed them selves a little better and not taken such advantage of the situation, but today we are all to blame. What I think is the funniest thing as I read the old articles in the building industry is that Enron was selling lumber futures during this time and they would have been the ones who took the bath as companies like US Homes, Pulte Homes and other major players had their prices locked in earlier. You want to hear something else? The Canadians now wish to retaliate with less cooperation of the pipeline for natural gas from Alaska, after all they sell us natural gas and oil (1 billion barrels) and any pipeline easement situation cuts into their perceived right to further offset our already 85 Billion Dollar per period trade deficit. In British Columbia there are many towns out of work where the mills are located. Oh really and what do you think happened to our towns in WA, OR, ID and other places. If the free market system could be evenly placed with proper cooperation then we would not have had to take the hit in our towns and now they had to take the hit in their towns. With the big builders locked in and the US Lumber and Truss companies forced to honor these contracts by companies like Enron (ha ha), Pulte, etc. it will be the little lumber companies and builders who get hurt the most. So who wins? No one, see the problem? I do.

Will builders try to shave prices by not pressure washing finished homes, yes the smaller ones will. Will they withhold payments to sub contractors too? Yes, will they cut corners to further cut their losses due to increased prices, yes. So what happened? Canadian’s took advantage of our policies, rubbed it in our faces and now they are mad, with the media in Canada is making it a huge deal and blowing it out of proportion. We have been great to the Canadians and they are talking a lot of smack in their media. I think maybe they should defend themselves, rather than relying on our military. We should treat them just like Mexico. Remember all those terrorists? Where did they come from; Canada remember? They act nice and say Aye, but I have done enough business with them not to trust them as much as American Businesses. It seems unfortunate that these provinces will not cooperate with us after all it is by our own good nature that we allow them to come here and rip us off, use our financial markets to go public and fund most all of their GNP.

If you are Canadian and you are reading this, you owe me personally an apology for the way your countrymen have treated me and those I associate with in the past. We have done nothing but lend a helping hand. I rescued a lady run off the road from a Candian Truck driver in the US. I have been cut off, denied access to the country because they thought I was hauling something in my motor home and wanted to rand sack search it, treated like crap once at customs after landing in Calgary. I have had proprietary information stolen from our company by Canadian businessmen, (crook). I cannot even tell you how many bad experiences we have had there. What say you AYE? Think about it, AYE. Maybe some of the tariffs ought to stay; AYE?

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