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WEB thinks we will enter a very long recession + second fiscal stimulus


arbitragr
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woops looks like I did a repost,

 

http://railfax.transmatch.com/

 

I like this site. They have up to date info on the big railroads including BNI, I started getting jittery when the coal shipments were down YoY, coal shipments were down 10+% YoY but  last week numbers have shown glimpses of light.  Right when we were hearing all that green shoots talk I was kind of antsy because there was no way coal shipments would be down so much. 

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You might want to check about this. The Cass Freight Index. Seems to be widely followed and It declined 20+% in past year as ABC reporter mentioned.

 

http://www.cassinfo.com/frtindex.html

 

2008 May Shipments 1.162

 

2009 May Shipments  0.913

 

woops looks like I did a repost,

 

http://railfax.transmatch.com/

 

I like this site. They have up to date info on the big railroads including BNI, I started getting jittery when the coal shipments were down YoY, coal shipments were down 10+% YoY but  last week numbers have shown glimpses of light.  Right when we were hearing all that green shoots talk I was kind of antsy because there was no way coal shipments would be down so much.

 

Thanks.

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Using the freight train index, to measure economic activity, is a great idea: solid numbers and a great pulse.

 

Yet, I wonder why it would be a bad idea..what would be the fault of using the freight train index as a measure of economic activity?  

 

I'm pretty sure you wouldn't be so silly as to rely on just one index. You can use it along with other indicies. e.g. auto sales, oil prices, shipping, housing etc ...

 

I think back in the day of Rockefeller, Vanderbilt and Carnegie, when Graham was still around, economists and analysts used such indicies b/c that was the main forum of transportation of materials and supplies that were important to economic activity, since that was the only form of well developed means of transportation. If you go back and read securities analysis you'll find some graphs and mention of train indicies. And I'm pretty sure Warren used it too back then as a young analyst. Using it today I think he's just re-flexing his analyst muscles, and I guess, in a way he still thinks it works as an indicator ... if he still uses it today.

 

Things have obviously changed now, but still very interesting, especially as oil prices make rail more attractive as a means to transport raw materials across the country. His investment in Burlington was based on the same premise/thesis.

Thank you.

 

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Using the freight train index, to measure economic activity, is a great idea: solid numbers and a great pulse.

 

Yet, I wonder why it would be a bad idea..what would be the fault of using the freight train index as a measure of economic activity?  

 

Most definitely WEB uses the freight train index as an economic activity indicator but I also think the educator/humorist in him was throwing a barb at those who use stock price indices to gauge economic activity.  (Look at how much stuff people are buying, as opposed to much stock people are buying.)

 

The freight train index is a great measure of industrial economic activity however our economy is more diverse than that.  In as much as the freight train index is a good measure, it's not perfect, but it does conform to the adage of preferring to be partially right over exactly wrong! (Freight train index vs S&P500 for example)

 

Any thoughts from esteemed board members on the larger service base and greater diversification of industries now present in our economy vs Great Depression Era reliance on fewer industries?  For example, option trading adds no value to anything yet it is an industry employing people who spend money and make it no matter how many widgets are being sold by the company they sell options on.  I realize this is a simplification as it is a small industry however if there are enough of these small industries do they not lessen the damage of economic downturn?

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