Darn it all, I wish we used more minerals. This reduction in iron is almost a total afterthought in a post-industrial society. We use iron to make steel. But we don't make a lot of steel. That sub-$40 price means almost nothing to us. The companies that do bend a lot of metal, companies like Caterpillar (CAT), Deere (DE), Joy Global (JOY) and Cummins (CMI), are already so down that there is no real impact.
There was a time when copper was so important to housing. You rip up an old house, you find a lot of copper. Now you find aluminum and PVC where copper used to be. It doesn't seem to matter at all to the bottom line of Lennar (LEN) or a Toll Brothers (TOL). It doesn't even get asked about.
Do we care at all about the price of coal anymore? No matter how low it goes, it can't keep up with the glut of natural gas. It is amazing that we are still a coal-based utility system. I don't think people know that. I don't even know if the candidates seem to know it. But the worldwide revulsion of coal is going to come back and make it so that the 35% of our fleet that is coal goes down a lot faster than people think. I know how important it is to preserve baseload and coal is baseload. But one of the reasons I like GE (GE) is because I think that number goes down much faster than the EPA says it will. Right now, the EPA is seeking a 30% cut in coal emissions by 2030. I just think that if we elect a Democrat, we are going to get a call to shut down coal at a much faster rate and that any coal plant that hasn't been retrofitted is going to be forced to close. (GE is part of TheStreet's Dividend Stock Advisor portfolio.)
We don't do better with lower tin or lower nickel, either.
All that happens is there is tons more credit stress in the system and a lot of it is dollar-based.
Our country has worked hard to wean itself off fossil fuels or use less of them. We don't build new buildings like we used to. We have all the cities we need. Now the Chinese do, too.
It's not even a neutral for our economy. It's bad. It's bad because the rail cargos are going down and those are signature stocks. They need to go higher. As it is, trucking stocks keep hitting new lows. Of course, it is a devastating blow for the emerging markets that had been the source of much of our growth.
Now if China were to come back, that would make it so the whole vicious cycle down would turn into a virtuous cycle up.
But it is very clear from the numbers and prices we are getting that the opposite is occurring.
So, no breaks from commodity deflation other than from the airlines and restaurants and cruise ships (retail's barely working because of the weather). It's just not a good time for so many stocks. Therefore, it is an amazing time for the handful of winners I described in my first piece of the day.