6 ms·

This one isn't at all surprising because it was clear from the outset that the "shortage" of lumber from the outset was artificial ie supply was being held back

by jmyeet 4y ago

This one isn't at all surprising because it was clear from the outset that the "shortage" of lumber from the outset was artificial ie supply was being held back. You could maybe argue there were transport issues getting lumber from lumber yards but that's a stretch. What I think a lot of people are learning is that a lot of these "shortages" and supply chain issues are entirely opportunistic and artificial. Prices are going up because prices are going up.

libertine 4y ago
What if these are just a symptom of a despicable human behavior called "hoarding"? You can argue some hoarding is motivated by fear, but a lot of it is motivated by greed. I know friends working in the construction business claiming some people just upfront bought whole stocks cement during the pandemic for example. Probably a lot of these purchases are done with funny money because money was being thrown around for cheap. So I'd imagine people would ask a higher price because funny money allowed to pay those prices, all due to the greedy hoarding behavior - at the end of the funnel people were paying stupid prices for housing for example, so why not? That same friend also said that they simply had to go and buy it from the secondary market for a premium. How do you solve this problem in the future? Are quotas the solution?
- callmeal 4y ago
  >What if these are just a symptom of a despicable human behavior called "hoarding"? It's only "despicable" if an individual does it. But "gains advantage" when you're a company. See: https://www.nytimes.com/2007/11/28/business/worldbusiness/28iht-hedge.4.8517580.html https://www.nytimes.com/2007/11/28/business/worldbusiness/28...
  - baremetal 4y ago
    i call it hedging, not hoarding :)
- JumpCrisscross 4y ago
  > What if these are just a symptom of a despicable human behavior called "hoarding"? It’s not despicable, it’s risk adjusting by carrying inventory. (If you inventory more than you can use, and it’s perishable, it’s a different problem.)
  - libertine 4y ago
    Well it's despicable because of the consequences. In a localized market, people adjusted their risk by stocking up toilet paper, canned goods, etc. Those who couldn't afford it, or came too late, were left with nothing. In a globalized market those who have access to free money can hoard as much of it as they want. As a consequence it spreads like a disease. You may say, in the case of the USA: "well, I guess that's the perks of being in control of the standard currency for global transactions, the rest just has to deal with it" -> this won't end up well for anyone.
    - JumpCrisscross 4y ago
      > in a globalized market is despicable simply because those who have access to free money can hoard as much of it as they want Billionaires hoarding toilet paper isn't a problem. It's everyday folk. Same for practically any other thing where hoarding is blamed. When we're calling the dispersed response of hundreds of millions of people despicable, it's the system--not people--that is broken.
      - libertine 4y ago
        Not toilet paper, but micro processors, production lines, raw materials, for example. How do you tackle this? Like I said in my original comment - will we have to resort to quotas?
        JumpCrisscross 4y ago
        > Not toilet paper, but micro processors, production lines, raw materials, for example Who is hoarding processors? The predominant driver of the current shortage is the auto industry pulling orders in the early pandemic and then raging back into gear. The only people stockpiling are groups like Huawei, and they aren't "hoarding" nearly enough to influence global prices. Broadly speaking, when a politician blames hoarding, it's a dead giveaway for deflecting from a systemic issue. The culprit is usually price gouging laws, which discourage holding emergency reserves. In this case, it was just a global supply chain system stressed by demand dynamism and stimulus spending.
- usrn 4y ago
  Hoarding assets is motivated by inflation much like hoarding currency is motivated by deflation. Both are bad because they prevent people from socializing.
- mindslight 4y ago
  > How do you solve this problem in the future? Are quotas the solution? No, doubling down on a centrally planned economy is not the solution. The solution is to stop printing trillions of dollars and aimlessly injecting them into the financial industry. Make interest rates exist again (say 5%), so that investments have to make sense. And let the asset bubbles actually pop for once, so people stop trying to create their own DIY asset classes out of consumer goods.
mschuster91 4y ago
> This one isn't at all surprising because it was clear from the outset that the "shortage" of lumber from the outset was artificial ie supply was being held back. Not really, or rather, the issues were/are region-specific. There were multiple problems, the chief one being that lumber yards have closed down. A sudden-ish shift towards construction usage of wood combined with an excess of raw wood from storm damages [1] then led to a crunch effect at the lumber yards, they were the bottleneck. On top, there was a serious shortage of truck drivers across Europe caused by the pandemic and shit wages, which meant that even if yards had capacity there was no way to get trees into lumber yards and finished wood products out of them. [1] https://www.weser-kurier.de/landkreis-osterholz/ueberangebot-von-sturmholz-doc7e40ibfdwipihnmucqt https://www.weser-kurier.de/landkreis-osterholz/ueberangebot...
ajsnigrutin 4y ago
I don't live in USA, and we don't build our houses from lumber and cardboard... but(!), there were shotages of materials here too. Why? Lockdowns! Suddenly people had a lot more time on their hands, a lot less places available to spend their money and everyone around me decided on some kind of a construction/renovation/... project. This made people buy more construction materials (cement, tiles, lumber too) and combined with some supply chain issues, prices skyrocketed. A friend of mine was building an "open garage" (slab of cement, four poles, roof, and an overhang to put a "picnic table" there too), and had to buy cement four times during a month-long diy project, and each time, the price was higher (all in the same month).
- wtf_is_up 4y ago
  What do you build your houses from?
  - ManuelKiessling 4y ago
    In Germany, it’s mostly stonework or concrete. Wooden houses are a thing, but still quite exotic. Wood is used for the roof, though.
  - danpalmer 4y ago
    Probably brick and/or concrete. In the UK and much of Europe houses are mostly made from brick. I believe the same is true in large parts of South America, Asia, Africa.
    - prepend 4y ago
      There’s no drywall inside the house? That’s interesting. What’s on the inside of the brick?
      - ssl232 4y ago
        There is. In the UK it's typically called plasterboard. I think the original commenter was trying to make the point that bricks are almost exclusively used for the outside, whereas in the US it seems to depend on the location. I've seen lots of brick houses on the East Coast but in the Midwest it seems a lot of houses are wooden on the outside.
ssl232 4y ago
I'm not buying your argument, but perhaps I'm missing something. Is there not a free market for lumber? If the market is functioning properly then any company attempting to reduce supply to push up prices will find themselves losing customers to other companies entering the market who are willing to accept marginally lower profits to plug the supply gap. As long as there is enough competition, prices should stabilise back to their long term averages. My take is that the supply chain for lumber, as with e.g. toilet paper, is optimised for a particular, and until 2020 relatively stable, level of output. The last two years have changed all that, and demand has outstripped supply, which has led to an increase in prices.
- jmyeet 4y ago
  A free market never exists in a vacuum, which is something that anarchists and libertarians always fail to acknowledge. Without government intervention any "free market" will quickly devolve into a monopoly or oligopoly. We end up with price cartels as is that we constantly need to regulate and break up. You really don't have to look far to see what happens with weak or no government oversight in a "free market". Look at Chevron pollution in Ecuador. Look at the baby formula "shortage". Look at the ludicrous and unjustifiable price for insulin in the US. Look at the artifically high pricing on mined diamonds and the de Beers cartel. Look at the fact that most eyeglass frames are made by a single company.
  - sershe 4y ago
    Really? These are irrelevant, invalid, or great examples of misguided govt intervention 1) Ecuadorian govt lost in international courts and us courts. Overall this case is irrelevant to free markets either way, but it's quite believable that it's a post factum shakedown attempt by a corrupt govt. 2) baby formula is extremely regulated. The factory was shut down by the govt, market is hard to enter due to regulation, imports are very restricted by the govt, even e.g. from Europe. 3) Insulin is the same story - govt restricts imports AND production. Intellectual property regime (which I d argue is one of the few good things the govt does - but it has nothing to do with free markets) is also at fault, although as far as I understand less so for insulin, perhaps for newer products. Not even getting into overall healthcare incentives screwed up by govt action (employer based health insurance, etc.). 4) dunno much about diamond, but I'm going to assume the example is just as bogus as the others. 5) I got great frames online for like $35 (there were cheaper ones too, didn't look as nice); my prescription is very high so these were not Walmart checkout glasses, either. Free market in action! I sure hope govt doesn't regulate it and force me back to local price gouging optometrist again, "for my own safety"!

by jmyeet 4y ago

libertine 4y ago

What if these are just a symptom of a despicable human behavior called "hoarding"? You can argue some hoarding is motivated by fear, but a lot of it is motivated by greed. I know friends working in the construction business claiming some people just upfront bought whole stocks cement during the pandemic for example. Probably a lot of these purchases are done with funny money because money was being thrown around for cheap. So I'd imagine people would ask a higher price because funny money allowed to pay those prices, all due to the greedy hoarding behavior - at the end of the funnel people were paying stupid prices for housing for example, so why not? That same friend also said that they simply had to go and buy it from the secondary market for a premium. How do you solve this problem in the future? Are quotas the solution?

callmeal 4y ago
>What if these are just a symptom of a despicable human behavior called "hoarding"? It's only "despicable" if an individual does it. But "gains advantage" when you're a company. See: https://www.nytimes.com/2007/11/28/business/worldbusiness/28iht-hedge.4.8517580.html https://www.nytimes.com/2007/11/28/business/worldbusiness/28...
- baremetal 4y ago
  i call it hedging, not hoarding :)
JumpCrisscross 4y ago
> What if these are just a symptom of a despicable human behavior called "hoarding"? It’s not despicable, it’s risk adjusting by carrying inventory. (If you inventory more than you can use, and it’s perishable, it’s a different problem.)
- libertine 4y ago
  Well it's despicable because of the consequences. In a localized market, people adjusted their risk by stocking up toilet paper, canned goods, etc. Those who couldn't afford it, or came too late, were left with nothing. In a globalized market those who have access to free money can hoard as much of it as they want. As a consequence it spreads like a disease. You may say, in the case of the USA: "well, I guess that's the perks of being in control of the standard currency for global transactions, the rest just has to deal with it" -> this won't end up well for anyone.
  - JumpCrisscross 4y ago
    > in a globalized market is despicable simply because those who have access to free money can hoard as much of it as they want Billionaires hoarding toilet paper isn't a problem. It's everyday folk. Same for practically any other thing where hoarding is blamed. When we're calling the dispersed response of hundreds of millions of people despicable, it's the system--not people--that is broken.
    - libertine 4y ago
      Not toilet paper, but micro processors, production lines, raw materials, for example. How do you tackle this? Like I said in my original comment - will we have to resort to quotas?
      - JumpCrisscross 4y ago
        > Not toilet paper, but micro processors, production lines, raw materials, for example Who is hoarding processors? The predominant driver of the current shortage is the auto industry pulling orders in the early pandemic and then raging back into gear. The only people stockpiling are groups like Huawei, and they aren't "hoarding" nearly enough to influence global prices. Broadly speaking, when a politician blames hoarding, it's a dead giveaway for deflecting from a systemic issue. The culprit is usually price gouging laws, which discourage holding emergency reserves. In this case, it was just a global supply chain system stressed by demand dynamism and stimulus spending.
usrn 4y ago
Hoarding assets is motivated by inflation much like hoarding currency is motivated by deflation. Both are bad because they prevent people from socializing.
mindslight 4y ago
> How do you solve this problem in the future? Are quotas the solution? No, doubling down on a centrally planned economy is not the solution. The solution is to stop printing trillions of dollars and aimlessly injecting them into the financial industry. Make interest rates exist again (say 5%), so that investments have to make sense. And let the asset bubbles actually pop for once, so people stop trying to create their own DIY asset classes out of consumer goods.

mschuster91 4y ago

> This one isn't at all surprising because it was clear from the outset that the "shortage" of lumber from the outset was artificial ie supply was being held back. Not really, or rather, the issues were/are region-specific. There were multiple problems, the chief one being that lumber yards have closed down. A sudden-ish shift towards construction usage of wood combined with an excess of raw wood from storm damages [1] then led to a crunch effect at the lumber yards, they were the bottleneck. On top, there was a serious shortage of truck drivers across Europe caused by the pandemic and shit wages, which meant that even if yards had capacity there was no way to get trees into lumber yards and finished wood products out of them. [1] https://www.weser-kurier.de/landkreis-osterholz/ueberangebot-von-sturmholz-doc7e40ibfdwipihnmucqt https://www.weser-kurier.de/landkreis-osterholz/ueberangebot...

ajsnigrutin 4y ago

I don't live in USA, and we don't build our houses from lumber and cardboard... but(!), there were shotages of materials here too. Why? Lockdowns! Suddenly people had a lot more time on their hands, a lot less places available to spend their money and everyone around me decided on some kind of a construction/renovation/... project. This made people buy more construction materials (cement, tiles, lumber too) and combined with some supply chain issues, prices skyrocketed. A friend of mine was building an "open garage" (slab of cement, four poles, roof, and an overhang to put a "picnic table" there too), and had to buy cement four times during a month-long diy project, and each time, the price was higher (all in the same month).

wtf_is_up 4y ago
What do you build your houses from?
- ManuelKiessling 4y ago
  In Germany, it’s mostly stonework or concrete. Wooden houses are a thing, but still quite exotic. Wood is used for the roof, though.
- danpalmer 4y ago
  Probably brick and/or concrete. In the UK and much of Europe houses are mostly made from brick. I believe the same is true in large parts of South America, Asia, Africa.
  - prepend 4y ago
    There’s no drywall inside the house? That’s interesting. What’s on the inside of the brick?
    - ssl232 4y ago
      There is. In the UK it's typically called plasterboard. I think the original commenter was trying to make the point that bricks are almost exclusively used for the outside, whereas in the US it seems to depend on the location. I've seen lots of brick houses on the East Coast but in the Midwest it seems a lot of houses are wooden on the outside.

ssl232 4y ago

I'm not buying your argument, but perhaps I'm missing something. Is there not a free market for lumber? If the market is functioning properly then any company attempting to reduce supply to push up prices will find themselves losing customers to other companies entering the market who are willing to accept marginally lower profits to plug the supply gap. As long as there is enough competition, prices should stabilise back to their long term averages. My take is that the supply chain for lumber, as with e.g. toilet paper, is optimised for a particular, and until 2020 relatively stable, level of output. The last two years have changed all that, and demand has outstripped supply, which has led to an increase in prices.

jmyeet 4y ago
A free market never exists in a vacuum, which is something that anarchists and libertarians always fail to acknowledge. Without government intervention any "free market" will quickly devolve into a monopoly or oligopoly. We end up with price cartels as is that we constantly need to regulate and break up. You really don't have to look far to see what happens with weak or no government oversight in a "free market". Look at Chevron pollution in Ecuador. Look at the baby formula "shortage". Look at the ludicrous and unjustifiable price for insulin in the US. Look at the artifically high pricing on mined diamonds and the de Beers cartel. Look at the fact that most eyeglass frames are made by a single company.
- sershe 4y ago
  Really? These are irrelevant, invalid, or great examples of misguided govt intervention 1) Ecuadorian govt lost in international courts and us courts. Overall this case is irrelevant to free markets either way, but it's quite believable that it's a post factum shakedown attempt by a corrupt govt. 2) baby formula is extremely regulated. The factory was shut down by the govt, market is hard to enter due to regulation, imports are very restricted by the govt, even e.g. from Europe. 3) Insulin is the same story - govt restricts imports AND production. Intellectual property regime (which I d argue is one of the few good things the govt does - but it has nothing to do with free markets) is also at fault, although as far as I understand less so for insulin, perhaps for newer products. Not even getting into overall healthcare incentives screwed up by govt action (employer based health insurance, etc.). 4) dunno much about diamond, but I'm going to assume the example is just as bogus as the others. 5) I got great frames online for like $35 (there were cheaper ones too, didn't look as nice); my prescription is very high so these were not Walmart checkout glasses, either. Free market in action! I sure hope govt doesn't regulate it and force me back to local price gouging optometrist again, "for my own safety"!