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Analyst Says Forestry Hard Times Here For A Year

By 250 News

Thursday, November 29, 2007 04:01 AM

            

Prince George, B.C. -  A Forestry Financial expert says the crunch that will determine how long the US lumber crisis lasts will not hit until March or April of 2008.

“The sub prime mortgage issue will hit home next spring when all of the mortgages become due" says the analyst." The banks and the major financial institutes have already taken their write downs on the loans , now we will have to wait and see what the US consumer does when these mortgages come due.  Will it frighten the rest of the public or not is a major question. That confidence will say whether we are in for the long haul or whether things will loosen up."  

According to our source, most economists are saying that there will be no significant change in the forest industry until the early part of 2009. "We think it will be 12 to 14 months before things pick up."

Asked about the current state of the lumber industry in Canada, he said  the “cash burn”, has resulted in companies taking more down time in an effort to cut costs. "The flack is coming from the board rooms; they are saying cut the cloth to fit."

According to the analyst we are no where near the level that the forest industry needs to operate. In order to cover the costs of the export tax, the US dollar and production costs companies in all of Canada need a price of $275 to $285 for random length 2x4’s. "With a price of 225 to 230 right now, you don’t have to be an accountant to see just what is happening."


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Comments

why so secretive? who is the analyst? who is the "source". Not exactly giving away trade secrets. Why not name people you are citing as experts?
If I have someone who provides an accurate view of an event , given that they are in a position to know and understand the issue and because of their position with a company that does not choose to allow their employees to speak publicly , I will take their comments every time.
As for the comments why so secretive? I noticed you have not identified yourself. Similarly you suggest, why not name the people you are citing as experts, begs the question, who is calling the kettle black
Abitibi just announced the closing of 3 mills in mackenzie....1 paper mill and 2 sawmills + 5 others across the country.

Brutal!