SOME GREEN SHOOTS
15 June 2009 by Cullen Roche
3 Comments
In keeping with the green shoot theme that investors are obsessed with these days we present you these green shoots courtesy of Gluskin Sheff:
These YoY numbers, as of last week, hardly paint the picture of an imminent
recovery:
• Raw steel production (-47.3%)
• Lumber production (-32.6%)
• Railway traffic (-20.1%)
• Electrical output (-12.9%)
The white collar banking economy appears to be stabilizing thanks to the Federal Reserve’s rescue mission, however, the blue collar real economy is as weak as it ever was.
Rosie as optimistic as ever. LOL.
Could the reflate trade have finally run it’s course? Is it time for the “go short” trade, or is this consolidation? Has anyone looked at the volume numbers?
http://www.bloomberg.com/apps/news?pid=conewsstory&tkr=AMR%3AUS&sid=athn1c8K0PUA
Delta, AMR See Revenue Vanish as New York Business Fares Tumble
Bloomberg
June 15, 2009 00:01 EDT — U.S. airlines faced with losses in the recession are slashing business-class fares from New York to London, Zurich and other finance centers by more than 50 percent to try to fill planes…
International traffic, as measured in miles flown by paying passengers, slid 10 percent at Delta and 8.7 percent at American through May as corporate firings and budget cuts spread.
Cutting Seats
The drag from tumbling fares helped trigger last week’s seating-capacity cuts at Delta and American to shave expenses and attempt to regain pricing power.
Delta will chop an additional 5 percent of international flying starting in September, pushing its 2009 reduction to 15 percent, while American will shrink flying by 7.5 percent, 1 percentage point more than planned. The biggest cuts will be on overseas flights, AMR Chief Executive Officer Gerard Arpey said at a Bank of America Corp. conference in New York last week.
“Customer demand for international travel has fallen significantly,” Delta CEO Richard Anderson told employees on June 11…
TPC wrote: “The white collar banking economy appears to be stabilizing thanks to the Federal Reserve’s rescue mission, however, the blue collar real economy is as weak as it ever was.”
For years I wondered how it was possible to build an entire economy on the trading of various forms of paper. Turns out it wasn’t possible and like every other house of cards it finally fell to the winds.