US Railroad Carload Traffic Down 19%

Tyler Durden's picture

The Association of American Railroads released its latest traffic data, and both the weekly and cumulative traffic originations are down significantly, however this is likely another data point that would be cheered by the wildly optimistic Philadelphia Fed as yet another piece of information that can only go up from here. Total carloads originated was down -17.1% for the week ending August 15, while the cumulative decline was -18.9%. Also the number of ton-miles has declined by 18% from 1,094 billion to 898 billion. This is probably as good a proxy for the real collapse of the US manufacturing complex and implicitly why any inventory bounce, outside of direct government subsidies, will be very slow in coming (and likely delayed due to increasingly artifical capacity added by the central planners).

Not one single traffic category has rebounded even close to 2008 levels. The biggest declines continue to be metals and products, lumber and wood products (don't tell that to LPX's stock price though) and metallic ores: probably the key ingredients to any manufacturing rebound, let alone an inventory restocking. The entire raw material supply side is still trying to discover its latest normal as a function of the massive amounts of slack still in the economy, let alone start the long, arduous journey of ramping up. That will not stop the stat arb momos from finding the 13th derivative somewhere in this data, and lift any and all offers they see tomorrow in C and FRE ahead of the flashed traffic flow.

h/t Joe

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Gilgamesh's picture

To go along somewhat with this on the other side of the globe:

 

No real demand for metals until 2010-BHP CEO

http://www.reuters.com/article/marketsNews/idAFLK21258520090820?rpc=44&s...


BHP Billiton Ltd/Plc (BHP.AX)(BLT.L), the world's largest miner, said on Thursday it did not expect to see "clean demand" for the global metals sector until early 2010 as a global slowdown bites...

Joe Sixpack's picture

Interesting, but forecasts really mean very little at this point. This is wishful thinking at best. Hard data is the only thing to look at (and even that is probably often skewed one way or the other by the interested reporter).

Anonymous's picture

Another green shoot! Yay!

Ducky's picture

did anyone just see the cnbc stuff live from jackson hole? that is must see video. as in "it is time to pull the crutches out from under banks and see who can stand on their own"

Gilgamesh's picture

If you are watching CNBC, let us know when the Dollars for Dishwashers infomercial starts.

ng2amarinefunk's picture
ng2amarinefunk (not verified) Gilgamesh Aug 21, 2009 4:10 AM

very very good, if you are watching CNBC you'd better pull your money out of the market, soon it will 'taken' from you, better stick to a basic trade, say 'Pig Farming' in China

Joe Sixpack's picture

Problem is they know who can stand on their own- none of them, including the Fed.

 

www.RevokeTheFed.com

buzzsaw99's picture

They aren't going to let any of the big bank maggots go down. They will dump their garbage on the fed and the agencies.

Ducky's picture

here's the link

http://www.cnbc.com/id/15840232?video=1221641551&play=1

can't believe they actually posted the video

TumblingDice's picture

The video isn't loading for me for some reason...can you summarize the content...perhaps more details on the crutch pulling mechanism?

ng2amarinefunk's picture
ng2amarinefunk (not verified) Ducky Aug 21, 2009 4:27 AM

so, whats the problem here, don't just sit there as if you KNOW something - you don't obviously - 1) did you understand what was said at the technical level it was said at?  2) do you 'disagree' with some talking points? 3) What were those points of disagreement? 4) do you 'knee jerk' simply disagree, as a matter of 'belief' - one of those 'True Believers' who substitute a fixed program of blinders cuz actually they are WAY WAY incomprehending technical matters - i mean there were some serious, educated people, who to my seeing were ASTOUNDINGLY FRANK, and hardly self-serving 4) you do understand that the man at the right is the head of JPMorgan-Chase? he speaks from  long experience at a high operational level in this world - a man who might not speak everything truthfully for many reasons, but yet he did! 5) whats your point, other than 'pointing' like some slum kid who can not speak more than a basic 500 word English vocabulary?

Anonymous's picture

Another green shoot! Yay!

RobotTrader's picture

Here's a "Green Shoot" for 'ya.

Industrial demand has simply collapsed.

Here's proof:

 

All I see is burning green shoots..

 

Joe Sixpack's picture

That speaks volumes (literally and figuratively).

Anonymous's picture

FutureSource charts now sponsored by Lightspeed? Golly gee wilikers MF Global, can't afford advertising anymore!?!

Anonymous's picture

Is this a picture of the feds balance sheet?

ng2amarinefunk's picture
ng2amarinefunk (not verified) RobotTrader Aug 21, 2009 3:24 AM

not quite proof, from THAT, but from elsewhere - regards Natural Gas it is NOW the buy of the Century, relative to the price level NOW 2009 - Rosetta Resources would be a good choice for fueling up the soon to be built combined cycle gas turbine generating facilities needed for stabilizing the USA power GRID, as SOME additional wind and solar intermittent, and destabilizing non-standard power sources come-on-line, and CALPINE too with its existing 20 gigwatts pretending to be very expensive base-load facilities when they WERE custom built for ENRON's peaking power brokering back in 2000-2001 and too, Methane with 1carbon 4hydrogens is the basic petrochemical feedstock for everything more complex, longer chained - only  that CERTAIN groups have opposed ANY additions to existing refinery capacity ANYWHERE in the USA, hence no potential for the natural gas to go into 'higher and best use' indeed, in Richmond California the refinery THERE was 'blocked' from a hydrogen generation plant addition - this at a refinery location in existence for near 100 years - not in MY backyard didn't even apply!  Beware the RAVENs - they are you enemy, know them well, learn their names - they are real incarned people, individuals, know them by name

 

ng2amarinefunk's picture
ng2amarinefunk (not verified) ng2amarinefunk Aug 21, 2009 3:31 AM

Post Script - hardly strange, but the rednecks of South Dakota are making happen the ONE new refinery in the USA since 1975 ! yes, find the enemy, know him well - note also that South  Dakota has the LOWEST unemployment in the USA - Rocky Racoon - beattles 1968 white album....http://www.google.com/search?hl=en&source=hp&q=oil+refinery+south+dakota...

ratava's picture

wow, that gas chart looks bad. retracing like that would send the dow ~4kish right? Well lets be thankful for Mr. Bernanke and his printing press, we sure have less and less value but we certainly do have more dollars

Anonymous's picture

This is a HUGE buy signal in that it signals the bottom (or close to the bottom... I mean buy buy buy while the Bernanke bounce lasts.... After that we are all so screwed, though... Excluding big bankers, of course, because they are too big to fail.

ng2amarinefunk's picture
ng2amarinefunk (not verified) Aug 21, 2009 4:29 AM

really? you are joking? let us 'in' on your deep insight, please tell

Hephasteus's picture

This phenomenon is unfortunately also eating the entire airline industry alive.

The banking industry loves recessions because they cause them. But depressions are entirely in control of the people. Which they don't like so much.

ng2amarinefunk's picture
ng2amarinefunk (not verified) Hephasteus Aug 21, 2009 4:31 AM

well, go on, tell the tale, do the deed, i love story times by the fire at twilight in the woods

Joe Sixpack's picture

Folks- the financial system is DOA. The economy is being sucked in because the feds are trying to save a dead system. Congress needs to take the right action while they can (it may already be too late).

 

www.RevokeTheFed.com

buzzsaw99's picture

CONgreff = A bunch of old geezers who have been on the take for decades.

ng2amarinefunk's picture
ng2amarinefunk (not verified) Joe Sixpack Aug 21, 2009 4:32 AM

i see, you are not quite an 'investor' nor 'trader' just a cop-a-feel type poster

ZerOhead's picture

the horror... the horror...

SloSquez's picture

Off topic but Cash for Clunkers is starting to look like a really low interest loan.

Gilgamesh's picture

So let's get this straight.  The Gov't isn't paying the dealers on time (or anywhere close to).  So "GM" steps in and advances dealers the cash - until "the Gov't" sends them the cash owed.  Makes total sense to me; let's get on with that healthcare takeover...

 

http://www.gm-trucks.com/news/business/2009/08/20/gm-to-provide-cash-adv...

 

Let's save for another topic the fact that they will now "produce an additional 60,000 vehicles during the 3rd and 4th quarters of 2009 to meet increased demand," broadcast about one day ahead of the End of Clunkers Program announcement.

OBRon's picture

According to the AP story, "Cash for Clunkers success limited by program flaws," by Stephen Manning, it is estimated that 450,000 new vehicles have been sold as a result of the Cash for Clunkers program.

As pointed out in the preceding link, GM is estimating they will be producing 60,000 vehicles over and above their normal inventory replenishment levels to account for the Cash for Clunkers additional demand.

Using GM's latest domestic market share of approximately 19%, the number of vehicles - industry-wide - that should be produced to replenish inventories due to the Cash for Clunkers program would be about 316,000. (60k/0.19)

So what happened to the difference between the estimated sales of 450,000 and the estimated inventory replenishment of only 316,000 vehicles?  That would mean a decline in inventory levels of 134,000 vehicles that will NOT be replaced - or about a 30% reduction in inventory as a percent of sales.  Considering the already precarious conditions in the auto industry, what does it say about the industry when 134,000 vehicles out of 450,000 sold represent excess inventory???

IMWTK

ghostfaceinvestah's picture

The Fed caused this Depression, and the Fed will fix it.

Or so the logic goes.

Anonymous's picture

Trucking down also....

Even through the NSA showed a sequential gain, it appears there will be a long way to go before tonnage truly comes back to pre-recession levels. On a year-over-year basis, June 2008 tonnage sank 13.6 percent, which represents the biggest annual decline in this current cycle. May’s year-over-year decline was 11 percent, and April’s was 13.2 percent.

http://www.logisticsmgmt.com/article/ca6673454.html?q=tonnage

Green shoots not ready to ship yet ??

Takingbets's picture

Speaking of trucking, during my many travels in California this month I noticed lots of unmarked trucks hauling on the I5, 58 and 99. Looking closer as to what they were hauling I noticed 95% of them were refers, so most of them had to be hauling produce. I've seen only one walmart truck on the road this month. What does that tell you? This green shoots rally is bullshit!

ng2amarinefunk's picture
ng2amarinefunk (not verified) Takingbets Aug 21, 2009 4:37 AM

i fail to see the interest in whats Walmart doing - Nothing for ten years ! Who cares - excepting that Walmart is the 'low-end' of 'low-end' retailers, go into one of their stores! the Demographic representation is from another world, of the poor, downtrodden, the wash-outs...in China, however, Walmart is a rising star, the perfect storm of whats needed to sell Chinese Goods, to Chinese people, in China

Green Sharts's picture

I'd tend to go with Wal-Mart's traffic and same store sales numbers as more accurate barometers of how they're doing than how many Wal-Mart trucks you see traveling on California highways.  Wal-Mart has a tiny market share in California relative to what it has in the rest of the country.  There are only around 100 Wal-Marts in California, and only 9 of those are Supercenters which sell groceries.

http://www.priceviewer.com/walmart_locations/CA.html

Anonymous's picture

This is bullish. Could have been down 20%. We dodged a bullet.

ng2amarinefunk's picture
ng2amarinefunk (not verified) Aug 21, 2009 4:43 AM

no we didn't - there is lots of room for more downside on shipping of all kinds, rather more correctly, is that this is the FIRST time some decent public awareness of 'loadings/unloading' as indicator, has been acknowledged in a manner that results in stock tradeable information - THEY the 99/100 investors with their home Metastock, and Intraday day-trading KNOW, not just the 1/100 who already knew, and already took appropriate action - take perhaps, Goldman Sachs, with their feta-byte memory, terrabit clocking equivalent computational power - neuronet enabled of course, and computer-dynamically programable on the fly,  Huh??

ng2amarinefunk's picture
ng2amarinefunk (not verified) Aug 20, 2009 8:31 PM

Railroad traffic - classic huh, DOW theory - well where do we go from here? 

i think 'the market' that is to say, those who 'trade stocks' have already seen and acted upon this - that is to say the 1/100 who are trend following, but use in-office supercomputers, neural nets and all, and multi-dimensional analysis are/have 'sold' and are 'selling' discretely

the OTHERS 99/100 using their home-quant 'metastock' on local computer, for instance being the usual suspected 'givers, givers, givers' - the 99/100 who used Voodoo to make it 'big' since March 8th Fed-engineered boom-times, who doubled, tripled, quadrupled, who are now genius, Masters of the Universe, all 100/100 -

well now, with that Motley Fool batch of knowledge masters - it will come quickly, very very quickly, as the Social Construction of Reality as THEY 'knew it to be' falls apart -

no matter, THOSE suckers never earned it, and will lose as fast as the 'downsiders' of the DotCom boom - yes, of course, the 'rails' are down, the 'Baltic Shipping Index' down, the real effects really are happening, not just as a momentary 'recession' but a near depression, not quite as 'manageable' but NECESSARY -

its not the mere discovery of unbacked credit default insurance in the amount it was, but the actual unfolding of obsolesence - Creative Destruction described by http://www.google.com/search?hl=en&source=hp&q=schumpeter+creative+destr...

and too, i'd guess there will be high demand for "The General Theory of Employment Interest and Money" THIS time the 30 year-old Masters will not have their college professors forcing it upon them, as required (but obsolete, of course) reading, to round out their knowledge THEN,

it will be seen that Keynes mastery of Statistics was a bit deeper, broader, and NOT numbers limited, there are qualitative right brained considerations, HE KNEW THEN  BEYOND mere bell curving VAR... but this is NOT the end of CAPITALISM

by no means, but the very beginning of a era of applied finance, the right way to use derivatives, to de-risk, all that -

we all will be able to look back, as in HG Wells book "The Shape of Things to Come", to look back at THIS time 2009 as the time, maybe that 'history really did end March 8th' per Hegelian/Leninist interpretation - the time of true dialectic

Anonymous's picture

Rudy Trendle said these numbers aren't as bad as they seem. They don't take into consideration Chinese offloads in the Pacific or similar seasonal factors. They're probably only off 5% in actuality.

waterdog's picture

Wow, I thought the post was on rail miles. In that light, this is not a good sign. Rail cars carry trailers. Wait, it is priced in. Sorry, I'll mind my own business.

Does anyone know if Mr. Durden was on the radio today?

Mannwich's picture

Yes, Tyler was on a Bloomie radio today.  Listened in my car.  Long interview too.  Nice work Tyler.

ng2amarinefunk's picture
ng2amarinefunk (not verified) waterdog Aug 21, 2009 4:47 AM

do NOT mind your own business, yes he was, and yes you are 'smarter' already i see than several self-appellated posters on this site, who have their own personal websites 'selling wisdom' to the unwashed masses - and whom i properly tag as 'junk posters' using this site mostly to 'advertise' indirectly and without fee, THEIR own pay for information sites

digalert's picture

Tyler, I cracked on your comment

"can only go up from here".

But please, it may catch on. I've heard enough

"green shoots", "less worse" this year.

ghostfaceinvestah's picture

Rail traffic, who cares?

The stock market is its own economy now.  All we need is people to trade with each other all day.  We don't need real things.

TumblingDice's picture

Just airlift Manhattan Island into the middle of the Atlantic and let them trade pieces of paper with each other until they starve to death. There, "recession" solved.

ng2amarinefunk's picture
ng2amarinefunk (not verified) ghostfaceinvestah Aug 21, 2009 4:54 AM

well, i see your quite correct viewpoint - its MOSTLY a zero sum game, this 'trading' in fact 'absurd' in many ways, but that has been the way it is the way it was = excepting for the extraordinary amount of 'marks' now available, these days, out there, for which there is no zero-sum average, but, in due time TOTAL loss, well deserved by them who think they KNOW when they do not, and think they don't know when they SHOULD KNOW but don't think they need to Master, they get a high day-trading i guess, gonna be on a per day basis somewhat more costly than your drug high however, which for THEM should best be their choice...and TRUE, they really should get back to work they CAN do, 'making things' - useful hobbies like Ham Radio, Amateur Telescopy - play mimic'ing the work of the world neglected by them...

MileMarker17's picture

It's a hell bound train, not bound for glory.  Keep 'em rollin' for the hobos, those poor old hobos.

monopoly's picture

It is beyond words to watch the market go up almost every day. Obviously fundamentals have nothing to do with what is going on. Rail traffic follows truck traffic. There is no improvement. You cannot short this market but it is known that this will end in a very ugly fashion. What is not known is the timing.

And this just in: WSJ:

Federal officials on Thursday were poised to seize Guaranty Financial Group Inc., in what would be the 10th-largest bank failure in U.S. history

You just can't make this stuff up.

ng2amarinefunk's picture
ng2amarinefunk (not verified) monopoly Aug 21, 2009 5:03 AM

no, the fundamentals ARE known to the 1/100 traders like Goldman, but their 'marks' are the 99/100 others, to be fleeced, so Truth is Engineered into thoughts that will make for trading action, nothing like a gold rush to bring in a crowd, the 99/100 will soon lose, and much MORE than they 'gained' since March 8th 2009 - timing IS of the essence, and you/we little guys basically don't have a chance - hey this is REAL money, so really big lies have to be told, misleading, head faking and shaking - ask Jim Cramer all about THAT stuff - he is the number one liar of all, such as has a public face, most are incognito, ready to 'fade' back into the crowd, as Himler tryed to 'fade' into a pretend Concentration Camp re-lease with Red Cross passport and all...but not for long, not for THAT FACE, same will happen to Jim Cramer, and eventually ALL the bastard economic criminals, no trials needed, just THEIR sure knowledge that someone somewhere knows who he was, what he did - a lifetime of looking over their shoulder, wondering if Black Death awaits, around the next street corner