US Perspective—30.09.08
30/09/2008
The Jacobsen Commentary and Market Opinion
Courtesy of www.thejacobsen.com
The best way to summarise the feeling today is paralyzed. Buyers are bidding low on materials and sellers aren’t quite ready to meet them at that level. The business that was transacted over the last week was done at lower numbers and although the US export report shows good numbers, there is a strong sentiment that those were trades concluded last week, and again at low prices.
All eyes are on the United States and what the US government is going to do to assist the private financial institutions mired in debt. This tightening of credit is felt globally throughout our industry as has been evidenced by the lack of demand in the last few months.
It is essential for the credit markets to be restored for businesses to be able to not only thrive but to survive. The housing market has nearly crashed in the United States and is awful in China as well. If people aren’t moving, improving homes, etc then there is not a market for furniture, hence the complete fallout in the cow market. The automotive industry is suffering from high fuel costs and a lack of credit extended to buyers and this is harming the auto industry, hence the suffering felt by the auto-leather segment. Luckily, for a few, the demand for shoe leather seems to remain steady and this is keeping some afloat.
In North America, there just doesn’t seem to be a lot of buying and selling happening, and if there is, no one owns up to it. Most selections are steady from last week with the same feel: cows are soft, bulls are softening, and the steers are steady with a softish feel.
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