The Angry Drunk Bureaucrat: Thoughts on Plywood, Steel, and Concrete

The Rules of Bureaucracy

Rule #O: "The Rules of Bureaucracy are mutable, non-canonical, non-ordinal, and contradictory, except in the cases where they are not."
Rule #1: "Document everything you do; if you didn't write it down, it didn't happen."
Rule #2 [The Sixty Minutes Rule]: "Never do anything that would cause Ed Bradley, Mike Wallace, Morley Safer, Steve Croft, Leslie Stahl, or even Andy Rooney to persue you down a hallway with a camera crew."
Rule #3: "Nothing Simple is Ever Easy"
Rule #4: "It's about the money; follow the money."
Rule #5: "Never ascribe to malice that which is adequately explained by stupidity.
Rule #6: "Politics is the enemy of good government."
Rule #7: "The biggest detriment to public service is the public."
Rule #8: "The second biggest detriment to public service is the service."
Rule #9: "There's a reason; there's ALWAYS a reason."
Rule #10: "The Law is a harsh mistress: The rigorous and exacting application of which can benefit of society when used correctly to advance good policy and block bad, and be the bane of society when used incorrectly to advance bad policy and block good."
Rule #11: "Public service often involves waking up in the morning, opening up the newspaper, and discovering that someone, somewhere out there thinks that you're a dickhead."
Rule #12: "No one really knows what you do."
Rule #13 [Luke's Rule]: "No one ever acts like the bastard they really are."
Rule #14: "Bureaucracy endures."
Rule #15: "The longer you work in bureaucracy, the more Catch-22 resembles non-fiction."
Rule #16: "Politicians are not smarter than you."
Rule #18: "Money is not created equal."
Rule #19: "Mediocrity is normalcy."
Rule #17: "Within any bureaucratic structure, resources (e.g. people, money, knowledge, etc.) are not distributed uniformly."
Rule #20: "Don't assume a fiduciary liability without a committed resource allocation."
Rule #21: "If you do your job and obey the law, they can't reasonably fire you."
Rule #22: "The Budget will always be wrong."
Rule #23: "Always sign in blue."
Rule #24: "A Bureaucrat must be able to explain and justify his/her actions to laymen without resorting to the phrase 'because the Rules say so.'"
Rule #25: "Never voluntarily relinquish control of an original document."
Rule #26: "Sometimes you just have to say 'Screw the rules'"
Rule #27: "Change sucks."
Rule #28: "Sometimes the answer is 'No.'"
Rule #29: "It is very easy to make difficult decisions when no one has a clue what's going on."
Rule #30: "If you hang around long enough, eventually you will become an expert in something."
Rule #31: "Data, technology, and automatic processes can never completely supplant human interaction."
Rule #32: "Cover thine own ass."
Rule #33: "It's not real until it has its own acronym."
Rule #34:There is nothing more dangerous than an elected, resourceful idiot.
Rule #35: It will always take longer than expected.
Rule #36: Coming Soon...

Sunday, October 02, 2005

Thoughts on Plywood, Steel, and Concrete

Fester has been going on about the housing bubble for some time now. The underlying premise from Mr. F. seems to be, to borrow an old saying from my people, "We is all gonna die."

Well, maybe that's just paraphrasing on my part.

Mr. F. is concerned, it seems, on the consumer side, tracking things like sales, availablity, ARMs, etc. All of the analyses he presents make me need to change my undies at least a few times. Both of us, it appears, are in agreement that there is a bubble and it will burst soon.

I've recently been tackling the producer side of the equation, and would like, if I may, to pull the Producer Price Indices from the BLS for various housing materials over the last few quarters. I've chosen plywood, structural metals, and concrete for my basic materials, as each are fundamental to modern housing construction and should be indicative of general housing costs. Basic premise: increase cost of materials mean an increase in the cost of new housing; an increase faster than the rate of inflation is bad. The results make me a little nervous.

Plywood

Cement & Concrete

Architectural and Structural Metals

There's a clear trend upwards in Cement & Metals, but Plywood varies as much as 12.69%. This does not take into consideration, however, the recent Hurricanes and the effect of reconstruction.

From December 2003 to August 05 (est.) the PPI for Plywood decreased .6%; Architectural and Structural Metals increased 17.7%; Cement and Concrete Increased 16.30%. Meanwhile, the CPI increased 6.57%.

So the $64,000 question: will the cost of production drive housing costs up too high for consumers to actually buy, or, will consumers try to bend over backwards for housing they can't afford?

We shall see.