You Won't Believe the Things People Steal
Rising prices for basics like steel, copper and even water haven't attracted just investors. They've also brought out a rush of cattle rustlers and scrap-metal hustlers grabbing manhole covers, grave markers and more.
Investors aren't the only ones who've caught on to skyrocketing commodity prices. The soaring cost of everything from water and iron to copper, cattle and coffee has brought out the thieves.
There's no nationwide data on the scope of the problem, but police on the front lines say it's huge. "It is happening in epidemic proportions across the country," says Lt. Derrick Hassan, who runs a special unit of the Detroit police fighting unconventional thefts of copper power lines, grave markers, water and electricity.
It's easy to find cases of commodity thieves who show no shame or fear. They'll hit cemeteries and churches, and even venture into dangerously radioactive nuclear sites to rustle up scraps of steel or brass. When they're not resorting to such lows, they're climbing to great heights. "You have guys climbing telephone poles and cutting lines," says Hassan.
As quirky as some of the thefts sound, they are serious. Copper wire theft regularly sparks power outages and can disrupt cellphone service and railroad crossing signals. "It can cause a whole neighborhood to black out," says Hassan.
It's hard to see this problem going away; a weak economy brings out more thieves, but a healthier economy would raise demand for a lot of the things they're stealing. Hassan says his special unit is making significant inroads against power-line theft, and local governments across the country are tightening regulations on scrap yards where thieves might sell stuff. After all, metal theft is closely tied to the number of scrap yards in an area, says Kevin Whiteacre, an expert on metal theft who teaches criminal justice at the University of Indianapolis.
By far, the most popular metal for commodity thieves is copper, and for a simple reason. "Copper is the one that's everywhere for thieves to take if they want it," says Ed Yardeni, of Yardeni Research.
The most common targets: wiring and plumbing in abandoned homes and businesses, air conditioners and power lines. Copper thieves will even scale tall cellphone towers to get their loot.
The sharp rise in copper prices since the recession has made this once-pedestrian metal a target. The iPath Dow Jones-UBS Copper Subindex Total Return,an exchange-traded note that tracks the price of copper, has more than tripled since early 2009.
Car theft is nothing new, of course, but one particular piece of your vehicle has become particularly appealing to commodity thieves.
The catalytic converter, a device that protects the environment, is also a platinum and palladium mine on wheels. As the prices of these rare metals have soared, so have thefts of catalytic converters.
With a power saw in hand, a thief can swipe one in minutes, especially if it's attached to a vehicle with high clearance, like an SUV.
Rising prices for those two metals mean thieves get a lot more for a converter than they used to. Since early 2009, platinum prices have more than doubled, and palladium prices have almost quadrupled. The ETFS Physical Platinum Shares ETF and the ETFS Physical Palladium Shares ETF weren't launched until early 2010, but they were recently up 25% and almost 100%, respectively, since lows hit just after their launch.
No metal is too mundane for commodity thieves. Though iron and steel sell for only several hundred dollars a ton, thieves will still grab crucial pieces of our world that are made of the stuff -- like manhole covers.
Cases abound. Thieves just swiped several manhole covers in Fairfield, Conn., for example. In Maine, thieves recently swiped steel parts for power utility poles.
Why would thieves go after stuff that used to lay around for years without a problem? Well, though steel and iron remain cheap, prices have shot up since early 2009. Scrap metal prices have roughly doubled.
Investor have cashed in; the Market Vectors Steel Index ETF has more than doubled, as have the shares of iron ore producers in the iShares S&P Global Materials ETF.
Thus, increased interest in the lowly manhole cover -- which police say may be particularly alluring to crack-addicted crooks. "You get one or two manhole covers, and you may have your rock for the day," says Hassan.
Java might be the source of your morning motivation. But with coffee prices spiraling higher, it's also motivating thieves. They're heisting beans in places like El Salvador, Kenya and Australia, taking lives in the process.
The profit potential may surprise you. In one case, thieves broke into a shipping container in Australia and stole coffee and tea worth more than $300,000.
It's not hard to understand why coffee is now a big item for thieves. The iPath Dow Jones-UBS Coffee Subindex Total ReturnETN, a good proxy for coffee prices, has doubled since early 2009, and it's on the rise again, after declines earlier this year.
"Water, water everywhere, nor any drop to drink." That's the "Rime of the Ancient Mariner," but it might also be a fitting refrain for someone who just got their water shut off for falling behind on payments. Unless they turn their water back on illegally -- a crime cities say is happening more frequently in this economic downturn.
And with water prices on the rise, another type of water thief -- the meter jumper -- is getting more active, too. This water thief simply installs a new pipe where the meter used to be, bypassing water company monitoring.
More than a few people must be worried about others tapping into their water supply, too, given the number of water faucet locks you can buy for home, office or job site.
Since 2008, the price of water in many major cities has gone up 30% to 50% or more. The Guggenheim S&P Global Water Index, PowerShares Global Water and First Trust ISE Water Index ETFs were all recently up 65% to 95% from their early 2009 lows. With their recent retreats, they offer ways to play the growing scarcity of water around the globe. That is, assuming thieves don't take all the water first.
You might think of cattle rustling as something out of old Westerns. But with the economy struggling and beef prices soaring, cattle thieves are making a comeback in Texas, Oklahoma and the rest of cattle country.
States are fighting back. One cattle rustler in Texas just got sentenced to 99 years in prison. But if the economy and jobs remain weak, two other trends may keep the cattle rustlers on the move.
First, an emerging middle class around the world wants to eat better -- and for many, this means more beef. This increased demand, combined with poor weather that's hit beef production, has resulted in a price boom that might not go away soon, even if the trend isn't fully reflected in the volatile price of the iPath Dow Jones-UBS Livestock Total Return SubindexETN just yet. Since the summer of 2009, beef prices are up anywhere from 15% to 20% or more, depending on the cut and the market.
Rising beef prices are good news for legitimate cow wranglers, of course. But only if they can keep the rustlers away.
Like water prices, electricity prices have been rising in much of the nation, and it might seem even harder to steal.
But in this stumbling economy, more and more people are doing just that. Common tactics include running wires from utility lines to homes or business, or hooking up cables to bypass meters.
In Detroit, residents can restore shut-off power with the help of a local "hookup man," says Hassan. "From the pole to the house, there's got to be a dozen ways you can illegally restore it," he says.
Meanwhile, the economy in Texas may have gotten a jolt from the high prices of energy and agricultural commodities. But, a Dallas utility recently reported 9,000 electricity thefts so far this year.
Been putting off that siding repair job on your house? Wait a little longer, and thieves might get the project rolling -- by stealing what's up there now.
That's because when the price of aluminum skyrockets, so do aluminum siding thefts. Back during the tail end of the last commodities boom in 2008, aluminum siding was heisted off a house in Indianapolis once every four days, says Whiteacre, of the University of Indianapolis. "That is kind of remarkable, because you don't really think of that as a feasible crime," he says.
Now with the price of aluminum up again -- the iPath Dow Jones-UBS Aluminum Subindex Total Return ETN has advanced more than 50% since early 2009, a good gauge of rising prices for the metal -- siding thieves are once again on the prowl.
With the price of oil now double what it was in early 2009, it should come as little surprise that oil thefts are up sharply.
But how do you steal oil, you might ask? Easy. Just tap in to an oil company pipeline. In Mexico, government oil company Pemex recently reported that the number of illegal taps into its pipelines has soared to 730 so far this year. That's more than the total for all of last year.
Not only will commodity thieves take anything that's not nailed down, they'll go anywhere to do it.
Churches are common targets. "Churches are at higher risk of theft, because there are not people around during the week," says Whiteacre. Thieves steal copper spouts and lead roofing material off churches. And they rip the copper out of external air conditioning units. But they don't stop there. Last year, authorities recovered a church bell from a scrap yard in Nova Scotia, which had been stolen from a church cemetery.
Cemeteries aren't sacred to thieves, either. Hassan, of the Detroit police, retrieved a metal gravesite marker for a World War II vet from a scrap yard. He still doesn't know its rightful place. Thieves regularly swipe vases from cemeteries to sell for scrap. Another popular item to steal: iron mausoleum gates.
Not even radiation will get in the way. In 2009, Ukraine's State Security Service caught thieves trying to steal 25 tons of radioactive scrap metal from Chernobyl, the site of a 1986 nuclear power plant disaster that caused serious contamination.
Apparently, wherever there's a hot commodity, there's a thief trying to take it.
