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Goldman Finally Looks At The Freight Charts, Raises Alarm About The "Broader Health Of The US Economy"
In the first days of November, we showed that global trade is in freefall with "China Container Freight At Record Low; Rail Traffic Tumbles, Trucking Slows Down." Now, Goldman has finally caught up, and writes that "indicators of freight activity—the volume of goods carried by truck, rail, air or ship—have slowed recently, raising concerns about the broader health of the US economy."
This is how Goldman finally admits what we have been saying for the past two years: the biggest threat to the US, and global, economy is the gradual and ever faster slowdown in trade, something which central banks are incapable of "printing."
Freight transportation data can be a useful gauge of activity in the goods-producing sectors of the economy, for obvious reasons. Products need to move from manufacturers to end consumers, and will be carried along the way by at least one of the four modes of transportation—truck, rail, air or ship—and frequently by multiple types (“intermodal” transport). The economic indicators measuring US transportation activity are also relatively transparent—counting things like the number of containers or rail cars—and in some cases quite timely. They are therefore popular among investors. Recently some of these measures have slowed, raising concerns about the broader health of the US economy.
And here is Goldman doing its best recap of our charting, using its own words:
- Railcar traffic, for example, has been notably weak, falling by about 3% from a year earlier based on monthly data (Exhibit 1, left panel).
- Data on trucking activity—which is nearly four times as large as rail activity by the dollar value of gross output—offers a similar message. The American Trucking Association’s truck tonnage index showed an impressive recovery after bottoming in early 2009, but growth slowed over the last year (Exhibit 2). Year-over-year growth was +1.7% as of Q3, down from +4.2% in Q4 2014 and +9.0% in Q4 2013.
- Air freight volumes as well as port traffic have also slowed, and in both cases the data hint that weakness in foreign growth is playing a role. Exhibit 3 shows the cargo “ton-miles” (i.e. 2,000 pounds/907 kilograms of cargo transported one mile) of US air carriers, divided into domestic and international operations. Total cargo ton-miles have declined by about 3% over the last year, with a 6% decline in international shipments but a 1% gain in domestic traffic (albeit from a low base).
- The largest ports in the US report monthly on their volumes of loaded inbound and outbound shipping containers—the ubiquitous symbol of global trade. In the year to October, total loaded container traffic fell 1.2%, reflecting a 0.6% gain in inbound containers and a 4.3% decline in outbound containers (Exhibit 4). A large portion of outbound port activity reflects trade with Asia (70-90% for the largest West Coast ports and about 35% for the Port of New York/New Jersey, the largest on the East Coast), and the observed weakness may therefore reflect tepid demand for US goods from the region.
We dread to imagine what would happen to Goldman's economists if they were to find out that a third of all containers shipped from Long Beach harbor are empty...
Finally Goldman's attempt to put a silver lining on what is clear collapse in global trade:
- The relative performance of different aspects of freight volumes mirrors what we see in other statistics, with greater weakness in areas closely related to commodities, heavy industry and exports, and somewhat better activity for traffic more associated with consumer goods (e.g. intermodal rail volumes) and imports. The contrast in the airline industry is particularly striking: while cargo ton-miles are down 3% year-over-year, passenger ton-miles are up about 5% over the same period. Sluggish freight volumes are therefore more confirmation that activity in goods-producing sectors of the economy remains soft.
In summary, a perfect time for the Fed to hike rates.
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"Awesome" (drink).
It's the American Curse >>> http://wp.me/p4OZ4v-3z
"finally admits what we have been saying for the past two years"...while the market has risen umpteen percent and we who wait on the sidelines look like morons, only compensation being we didn't buy gold.
Expecting lots of down votes on this one.
That's why they make the big bucks! (puke)
The Goldman bankers have a difficult time (by which I mean they don't give a shit) analyzing the effects of QE on main street while they snort fine cola with hundred dollar bills funded by QE. The only reason they bothered to write about it now is to lay the foundation among financial analysts and pundits who follow them to argue for moar QE.
They'll figure it out when an angry mob torches them in a pile of Weimar dollars.
If the fine cola has worn off.....
MOAR!!!
are you kidding...they plan to bribe power brokers to keep you dumb, happy and poor. Just like the public unions know how to collude to steal your money. You have no power....they take you money, make laws for themselves, and print trillions...FOR THEMSELVES. They use whatever convienent fool...Clinton, Bush or Obama they don't care!
How many yrs do you guys need to learn? It doesn't matter. Markets only know 1 direction and that is up. This will be another excuse to keep rates at zero & support asset prices at higher levels.
I think most stuff goldman publicly puts out is to manipulate something. So yes. Lies to make money.
Pump and dump , Institutional sized.
Goldman has huge exposure to Emerging markets. A rate hike would put a hole in their pocket...
Like the drunk driver that hits the tree and five seconds after impact, the brake lights go on...
OK - who's got the balls to tell Goldman they have all the charts upside down?
Does anyone remember the "Ceridian UCLA Pulse Of Commerce Index" ... It mysteriously disappeared a couple months before Obamas Demolition of USSA contract was extended.
Is that like how some people remember The Berenstein Bears? And other's remember The Berenstain Bears? Or the list of countries getting smaller? Or actors you thought were dead seem to be alive and kicking on TV? Yeah, that type of thing will be happening a lot over the next 2 years, 8 months and 25 days. Think of it as those spot the differences games in the newspaper where the picture on the left is slightly different from the picture on the right, except each time you go looking objects vanish from both pictures.
Quick question for a point of reference, do you remember it as Berenstein bears or Berenstain bears? Use google if you want to verify what you remember is actually where you are.
You mean Mandela didn't die in prison? ;)
Something like that, there are about four stories behind Mandela on when and where. But as things move forward, there will only be one story as consolidation happens. That is only for the public records though. Other things change or just vanish as well. Children. Marriages. Streets. City spellings. Placements. The stars (is the north star present? or not "north). Car key's. Left shoes. Wallets. It's not just public figures.
Other disappearances...
Youtube videos of muslims dancing in New Jersey
Awful picture of Carly Fiorina
LOL!
How about the colour of the sides of a rubics cube. Six sides, which colour is gone and which one is new? Only a kid from the 80's would know since we all had one glued to our hands for at least two years.
Should point out is they aren't 'disappearances', they are just 'never were'. Doesn't take much. A missed appointment...missing car keys...a missing shoe...a delay and then something doesn't happen and someone doesn't happen and something else doesn't happen. In quantum theories of time, practically every decision made creates another slice of time. If approaching the loci/singularity of a black hole all time consolidates as things might have been, were or never were for practically everything.
The construct of reality is always dependent on the foundation of time being available to allow the reality to happen. When the time is consolidated, things are omitted to provide the best possible outcome. As this happens the given reality changes to reapply the changes. In IT these type of things fall under change management and release management. Only through the careful orchestration of changes behind the foundation of a delivered service does a release happen properly. And most professional engineers understand to accomplish that the KIS rule is the most orthodox approach. If someone wants it good and fast...it never comes cheap. More to the point the costs are always paid up front in whatever assets are available to get the job done to avoid sod's law, murphy's law and finagles law.
The issue though is clients usually fall off their chair once you hand them the bill for services and you end up owning all their asses.
"they aren't 'disappearances', they are just 'never were'. Doesn't take much. A missed appointment...missing car keys...a missing shoe"
a missed lithium dose, a missed AA meeting, a missed meeting with your psychiatrist...
I do not drink or drug. Just keep watching, it gets more interesting.
"The contrast in the airline industry is particularly striking: while cargo ton-miles are down 3% year-over-year, passenger ton-miles are up about 5% over the same period."
So, the question is: are we flying more passengers, or just bigger ones?
maybe Walmart started offering discount flights to its heifer-like customers. That would drive the scales into overload.
Beat me to it. OK, I'm biased cause I'm a private pilot, but this takes the cake. For chrissakes, the Goldman Sucks so-called analysts are probably paid a shitpot lot of money for this muppet shitcake they produce every month, but 'passenger ton-miles'?!??! WTF.
There is a shitpot lot of data out there on:
Load factors (% of seats occupied vs. available airline 'inventory')
Revenue Passenger Miles (RPMs)
Available Seat Miles (ASMs)
Enplanements
All Seasonally or not-seasonally adjusted.
http://www.rita.dot.gov/bts/press_releases/bts051_15
But Passenger ton-miles? Ain't no such animal, except as an indication of how shitty Goldman Sucks research really is (but we all know that).
Maybe this is just a Tyler sly Tuesday humor post...
Masses of debt at every level of the economy, sucking what used to be margins and profit into the pocket of banks and investment vehicles. What used to sell for a dollar has to sell for 2 to cover the loans at every company in the chain. Nothing is expanding at the retail level, but lets raise rates anyway. Gee, I wonder what would happen?
the real economy is irrelevant to the squid and the maggots. they always get their bonus and they leave a trail of misery in their wake.
Great! The paper assets are backed by the realities and still held out of fixes to myths. Just trust that it will take a long time to implode as the Predators are all in to perpetuate these myths whlile they extract.
Am I wrong or do these charts show a recovery in shipping?
Am I wrong or do these charts show a recovery in shipping?
Here's a great idea! Let's stay long stawks over the long weekend with WWIII ready to start!!! Who else wants to play?
I'm in with my long-term-dividend-paying companies who actually make a profit and disburse it to shareholders. Buy, hold, reinvest dividends. I know, boring, right?
Q1: Ooh, stocks up! Dividend payment.
Q2: Ooh, stocks down! Dividend payment.
Q3: Ooh, rumors of war! Dividend payment.
Q4: Ooh, peace in our time! Dividend payment.
Q1`: Ooh, ZH says it's all crashing any day! Dividend Payment.
Q2`: Ooh, an election coming that will change everything! Dividend Payment.
Q3`: That dang politician was just like the rest, nothing ever changes: Dividend Payment.
Q4`: Stocks up, stocks down, more war, more peace, more poiticians, more...: Dividend Payments....
Damn weather...it keeps hiiting very specific localities like ports, airports, oceans, highways...when is it going to stop.....climate change is ruining our Christmas and vacation plans...and with Mr El Nino running loose in the Pacific ocean...well that could be a game changer... Janet..are you listening to me...using your data dependent analysis...this equates to a .23894% interest rate reduction...hurry..Christmas is almost here..Let's not play Mrs Scrooge and ruin Tiny Tims Christmas...
So obviously we're in a recession. Obama's MSM should announce it any day now
But market says things are fine and couldn't be better in the US.
Looking at simpler, less costly gifts this year.
Relatives have loads of debt. School loans.
Fuck our eCONomy until the corruption and graft drifts back to a more acceptable level and people start going to jail. Only ones benefitting in this eCONomy is the rich bankers and scum politicians.
Don't believe the statistics and everything you read on ZH. Plenty of "regular" folks applying themselves and "benefitting" in this eCONomy, Colonel.