The final numbers are in, and the fourth quarter saw GDP shrink at a 6.3 percent pace at the end of 2008, the worst showing in a quarter-century, and probably isn’t doing much better now. Still, a 6.3 percent decline is better than the 6.5 percent that economists were expecting.
Meanwhile, new claims for unemployment benefits last week rose to a seasonally adjusted 652,000 from the previous week’s revised figure of 644,000
So you want some good news? Well, I’ve got good news and bad news on trucking.
Readers of UncommonWisdomDaily.com who have been with us since the beginning (of March, ha-ha) may remember my webcast, That Hellbound Train. In it I talked about empty railroad cars as an indicator of US economic health.
Now, the American Trucking Association reports good news …
The advanced seasonally adjusted For-Hire Truck T
onnage Index edged 1.7 percent higher in February 2009, marking the second consecutive month-to-month increase.
But there’s bad news, isn’t there? Yup. The ATA also tells us that …
The gain over the past two months, totaling 4.8 percent, did not even erase the 7.8 percent contraction in December 2008.
And how about the year over year change? The ATA says: Compared with February 2008, tonnage contracted 9.2 percent, which was the third-worst year-over-year decrease of the current cycle.
If you want to see the last time trucking was at current levels, you have to go back to 2004.
Remember, we have more people now than we did then.
In other news …
I’m really starting to like Elliot Spitzer. I so wish he was the attorney general. Here, he tells us even more about the REAL AIG scandal, and tells us what he would be investigating as a prosecutor.
US retail investors are fleeing to savings. The Financial Times tells us that US retail investors poured close to $250 billion into bank accounts in the first months of this year, sharply accelerating a flight to safety as they continued to flee volatile stock markets.
Over at MoneyMorning.com, they’re trying to scare me (again). And succeeding. Read The 3 Ways China May Deal With Growing US Debt.
Nobody could have predicted that sleazy banksters like Citi and Bank of America would try to game the Geithner bailout, right? Oh wait, plenty of people could have predicted that. Unfortunately, none of them work for the Obama administration. Anyway, according to the New York Post…
The huge subsidy to banks hidden inside of Tim Geithner’s public-private partnership program may already be leading banks to load up on securities they plan to sell at inflated prices.
Citi and Bank of America have been aggressively buying up Alt-A and ARM mortgage backed securities, sometimes paying more than the going rate of around 30 cents on the dollar.
In other words, the banks buy the toxic debt for 30 cents, sell it to the PPIP for 50 cents, and pocket a quick (and huge) profit immediately. Thank heaven for the free market, eh?
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{ 3 comments… read them below or add one }
Your story entitled “That Hellbound Train” is on the mark. I’m in transportation logistics and I can tell you that you are spot on. There are a few thousand empty intermodal containers just sitting around at various rail yards collecting dust. We use a private website run by a logistics company, which is made available to logistics companies who move intermodal rail containers, which are the containers that are placed on flat-cars and move on stack-trains. Well, this logistics company shows the daily inventory of empty intermodal rail containers available for use at all the intermodal railyards in this country, Canada, and Mexico. Now, although the biggest railyards almost always have an adequate inventory of empty rail containers at any time of year, the inventory levels of available empty containers is at levels I have not seen in the 10 years I have been with my company. Inventory levels of empty containers always go up after the seasonal Christmas push is over, but what I saw this week for example is ridiculous. In the Los Angeles market, for just the Union Pacific RR, there were in excess of 1,100 empty containers available for just 1 size of rail container; 53′ containers. Normally, the Los Angeles market is always well supplied with intermodal containers, because the UP makes sure there is always an adequate supply there, but in excess of 1,100 is ridiculous, and there are other major yards in this country, which are likewise swimming in available containers, though nowhere near to the same extent as Los Angeles, but still well above average. I’ve been in this field long enough now to know the normal seasonal flows, and I know that normally at this time of year, I would have a hard time reserving containers at certain railyards, because of business demands, but not now, and I can only discern that businesses that normally use intermodal stack train service are experiencing a large drop-off in their business, which I am sure is not helping the bottom line for the major railroads, like the UPRR, BNSF, CSX, and the NS.
As China sings “I’ll take Manhattan” (and California and Florida) throw in DC and Wall Street for free (or is that in Manhattan). And if it’s gold they want give them the Golden Gate Bridge, (or is that in CA), Nevada, Colorado and all our children’s golden parachutes. Might as well throw in Alaska and Texas and Louisianna (the new LA purchase). Give them Hollywood (or is that in CA). Then will the POG rise?
Richard, thanks very much for your insight on the surplus of shipping containers. I may use your comment in an upcoming issue or a column for UncommonWisdomDaily or MoneyandMarkets.
Thanks again
Sean