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Watching the Wallboard

Cramer's scared by the Fed implications of a recent <I>Chicago Tribune</I> article.

Forget copper and gold. Who gives a darn about iron or steel? I am watching wallboard, and not just because we are redoing the outside of our house.

This Sunday's

Chicago Tribune

led with a frightening piece about the current wallboard shortage. I have known about this shortage for some time, but I had no idea it had gotten so out of hand. The shortage is so great that, to quote the


, "Some homebuilders are sending a bevy of employees to

Home Depot

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so each one can buy the maximum number of sheets the chain has set, which varies from one area to another."

The killer quote, however, comes from a builder who says, "We're telling our people to start stacking it early and in stages." Nothing angers the


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more than people trying to beat price increases by taking down excess inventory.

The only way to break that cycle is to raise short-term rates. That makes it too expensive to stockpile, which breaks the cycle.

How important is drywall as a measurement of the economy? As much as 10% of the cost of a house can be this type of insulation. It is a huge swing cost. It's a keystone commodity.

Stories like this one in the


scare me. I am used to hearing about rents in the Hamptons being a reason for the Fed to tighten. But that's been the story for 12 years. I am also used to hearing about Manhattan's rents being a reason for the Fed to tighten. But that's also been the story for 12 years.

I am not used to hearing about nationwide shortages of commodities that go into every house. That hits the Fed in the kisser.

When I read articles like this, they say to me, Wait until Friday midmorning to buy anything.

Which is what I will probably do.

James J. Cramer is manager of a hedge fund and co-founder of At time of publication, his fund had no positions in any stocks mentioned. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at