As everyone knows, the Dow crept within a mere two points of its all time high. CNBC's constant fascination with a potential new high point was nauseating because a high point does not have any particular significance. The stock market is not on fire. There are plenty of headwinds. The markets are rife with risk. The Dow's previous record of 11,722.98 was set on January 14th 2000, well over six years ago. And the S&P and Nasdaq remain well below their record levels. I, for one, am not getting too excited over the Dow's potential new record. And I wish CNBC found something more meaningful and insightful to discuss.I am generally bullish on commodities. Many pundits are claiming that, with slowing growth in the U.S., commodities will tank shortly. Possibly, but that is not my mindset. To increase the production of many commodities takes several years. In Alberta, to create a new oil sands operation takes at least four years once construction begins. And it takes many years before that. As I mentioned in my prior post How Far Away Is Peak Oil Really?, an integrated oil sands project requires about U.S.$35-$40 to break even. I expect that the supply costs for many commodities have risen and those costs will be reflected, or at least help to form a floor, for future prices.
I believe the housing picture will get worse. Here in Calgary, the residential listings have recently exceeded 6000. In December of 2005, not even one year ago, the number of listings was 2000. So far the sales this month total nearly 2000. Or stated differently, there is about a three month supply on the market.
I hope wherever you are, you are enjoying the fall colors. I took some pictures this past weekend in Calgary that show our fall colors of green and gold. With the cooler temperatures, there was some snowfall in the mountains.
The above picture is hosted at Flickr. If you click on the picture of Calgary and the Rocky Mountains, you will be directed to a larger version at Flickr. The picture looks much better when it is viewed in a large format.
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