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OCTOBER RAILTIME INDICATORS REPORT

14 October 2009 by TPC 6 Comments

The weakness of the macro economy is nowhere more evident than it is in the railroad industry. The AAR’s October Railtime Report clearly displays how weak the real economy remains and how tepid the actual recovery has been:

What are the latest numbers for U.S. railroads?

U.S. freight railroads originated 1,380,684 carloads in September 2009, down 14.2% (227,837 carloads) from September 2008 and the 11th straight double-digit monthly carload decline. The percentage decline in September was the lowest since December 2008.

Average weekly carloads on U.S. railroads in September 2009 (276,137) were 2,900 less than in August 2009. All or most of that decline can probably be attributed to severe flooding in the Southeast which shut down some rail lines for a period in September.

In September 2009, U.S. intermodal traffic (which is not included in the carload figures discussed above) totaled 993,235 trailers and containers, down 14.6% (169,912 units) from September 2008 (see charts at top of next page).

The average weekly intermodal count on U.S. railroads in September 2009 was 198,647 trailers and containers, up 2,600 units from August 2009 and the highest since November 2008. The last three weeks of September were the three highest-volume intermodal weeks of 2009 for U.S. freight railroads.

For the first nine months of 2009, U.S. rail carloadings were down 18.1% (2,301,087 carloads), while intermodal traffic was down 16.8% (1,480,358 trailers and containers). In Q3 2009, U.S. rail carloadings were down 16.0%, compared with a decline of 22.2% in Q2 2009 and 16.2% in Q1 2009.

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6 Comments »

Brian said:

Well we keep hearing this but the market keeps rising. At some point you just have to ask yourself, what good is an indicator that can’t help predict or at least keep you in big rallies like this one. This seems to be a lagging or at best confirming indicator. Warren Buffet supposedly likes to look at rail activity as a sign of economic progress but what’s the point, the market is going to do it’s own thing regardless. Other tools are needed. If there is any point in history that has underscored the flaws with fundamental trading, this latest rally from March is it!

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John Doodle Reply:
October 18th, 2009 at 2:47 AM

“Other tools are needed. If there is any point in history that has underscored the flaws with fundamental trading, this latest rally from March is it! ”

Sure you are right; the tools needed are : a) “uttereances of green shoots” from your favorite politicians and central bankers b) the USD index c) the growth rate of the FED’s balance sheet, aka the taxes you and your children would be paying till the end of your days

Need more? Visit you nearest friendly mutual fund manager

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# 14 October 2009 at 10:32 PM

AWF said:

It would be stretch for any (reputable) analyst to argue the “Fundamentals” of this market.

From the bright lights of Spring,Texas

We see only multiple expansion–not real growth

Every week my partner and I check the UNP freight depot in Spring

I may post a picture of the number of railcars idle at this location.

Everytime I hear or read the US economy is recovering –I look at these pictures.

My eyeballs don’t lie.

You may not know Spring,Tx –It is a historic little town north of Houston,Tx

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gutfeel888 Reply:
October 18th, 2009 at 6:50 PM

I’ve never been to the town you mention. But if you come to Timesquare in NYC, you may feel the strong pulses of this recovery. What I mean is that we need travel around to feel this recovery indeed:).

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# 15 October 2009 at 9:08 AM

AWF said:

No Comments ?

Anyone

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TPC Reply:
October 16th, 2009 at 10:27 AM

AWF,

I think there are signs of thawing, but the levels that the stock market is pricing in don’t seem to match with the real economy. We are troughing and rebounding poorly back to very low levels. Just look at capacity utilization, unemployment, etc etc.

Amazing that the market is back to 2006 levels with all that is going on. It’s half liquidity driven, however….