Professor Elam

Fresh Produce like avocados or bell peppers has to be sold ni a certain time period or the vegetable spoils. This keeps such markets at an equilibrium of supply and demand with prices reflecting the seasonality of the product. This is not the case with items that can be stored like say cotton.  When cotton prices are low, farmers store the cotton, waiting for the price to go up. The opposite happens as buyers are aware that potential supply is growing.  Hence ag products that can be stored are a boom or bust business.

North Texas Housing Starts are much the same.  This economist argues that speculative home building needs to stop.  There are over 10,000 unsold new homes on the market. This depresses their prices and requires incentives, hello auto industry.  We see the same thing now with pickups and SUVs.  I do see that the Arlington GM SUV plant is going to start producing hybrids.

Meanwhile, Detroit announces two new muscle cars.  Here are stories on the monster engine Dodge Charger, the Viper is sporting an ever larger V 10 engine than before.  What is going on here as gasoline hits $3?  Ford sales are down 9%  GM loses $39 B.  Hmm …..