TRUCK TONNAGE JUMPS 2.7% IN NOVEMBER
by ilene - December 30th, 2009 11:30 am
TRUCK TONNAGE JUMPS 2.7% IN NOVEMBER
Courtesy of The Pragmatic Capitalist
The trend in truck tonnage is moving in the same direction as rail freight. Though the comps are very easy on a year over year basis tonnage was still down 3.5%. Much like the trend we’ve been seeing in freight volumes the trend is certainly positive, but the year over year comps remain very week. There is no denying that the economy is coming off its very low trough, but the strength of the rebound is certainly in question. From the ATA:
ATA Chief Economist Bob Costello said that tonnage is moving in the right direction. “Slowly, but surely, truck freight has started the recovery process and November’s solid increase is a very positive sign,” Costello noted. He said that November’s tonnage levels were pushed higher by improved economic activity, as well as by an inventory correction that is near completion. “Truck freight had been hurt by both slow economic output and bloated inventories; however, we now have evidence that the inventories are in much better shape, which will not be such a drag on truck freight volumes.” Costello continued to be cautious about the future though. “While the economy and trucking is improving, the industry should not get overly excited about the sizeable increase in November. I continue to believe that both the economy and truck tonnage will exhibit starts and stops in the months ahead, but the general trend should be for moderate growth.”
Source: ATA
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DiggH1N1 Update
by ilene - December 30th, 2009 11:27 am
H1N1 Update: Watching and Waiting
by Ilene with guest expert Dr. Henry Niman at Recombinomics
Watching and Waiting
Although the numbers of new cases of swine flu have been declining in many regions, including the United States, it is too early to know whether or not there will be subsequent waves of disease.
"Based on my experience with new diseases and the lessons learned from past pandemics, I think we should remain cautious and observe the evolution of the pandemic over the next six to 12 months before declaring victory," World Health Organization Director General Margaret Chan tells Swiss newspaper Le Temps. (World Health Official Says Swine Flu Still a Threat)
Although the WHO is taking a cautious approach, changes in the virus’s genome that increase its virulence and resistance to Tamiflu are becoming more common. Dr. Henry Niman, expert in flu virus evolution, believes another wave of flu illnesses will occur in early 2010. In addition, he believes resistance to Tamiflu will become "fixed," similarly to how this genetic change evolved in the seasonal H1N1 virus. (See Flu Update: Tamiflu resistance and Ukraine update, and Efficacy of Roche’s Flu Drug Tamiflu In Doubt, by David Phillips.)
WHO: H1N1 swine flu pandemic will stick around for another year
The World Health Organization warned government health authorities to remain vigilant on the H1N1 swine flu pandemic, saying the virus could mutate before vaccines can help it dissipate.
The World Health Organization is confident that the H1N1 swine flu pandemic will be under control in a year’s time – however, WHO officials warned global governments to remain vigilant for any mutations in the troublesome bug.
Dr. Niman believes this wave will be more severe than the previous two--but not due to random mutations. Rather, this will result from the process of recombination. Due to recombination, increasingly greater transmission of aggressive variants (D225G, D225E and D225N) and Tamiflu-resistant viruses will occur.
Ukraine
I’ve reprinted two recent articles at Recombinomics, with my comments in blue.
The WHO Surprise on D225G / D225N H1N1 Fatalities, Recombinomics Commentary
After considering the current available virological, epidemiological and clinical findings and following discussions on an earlier draft with WHO and its European-based Collaborating Centre ECDC has come to a preliminary formulation namely that the G222D/N
…
INSTITUTIONAL PSYCHOLOGY REMAINS BULLISH
by ilene - December 30th, 2009 11:24 am
INSTITUTIONAL PSYCHOLOGY REMAINS BULLISH
Courtesy of The Pragmatic Capitalist
Institutions are beginning to favor equities again according to the latest data out of State Street. Investor confidence moved higher in December to 103.9 from the previous reading of 100.8. This shows that institutions still favor risky assets. This reallocation of capital has been most apparent during the rally and the recent tapering off of confidence explains much of the sideways movement in equity markets over the last few months. This data is corroborated by recent data we presented from the CFTC which shows small speculators are bearish while large speculators remain bullish.
Ken Froot, the co-founder of the index explained the recent performance:
“This month’s up-tick in global
investor confidence stemmed largely from an improvement in the mood in Asia, where risk appetite rose to an eight-month high. Elsewhere portfolio reallocations were modest. With three of the four indices over the neutral level of 100, institutions are continuing to add to their risky asset positions, but at a slower pace than was evident earlier in the year. Investors will be watching for signs of renewed economic growth, and well-designed exit strategies from policy makers, before making more significant reallocations towards risk in 2010.”
Paul O’Connell added his thoughts on the full year performance and prescience of the index:
“For the year as a whole, investor confidence staged a meaningful recovery from the historic lows of twelve months ago, leading the way ahead of other measures such as equity prices, consumer confidence and surveys of investor expectations. By quantitatively measuring the actual risky asset allocations of institutional investors, the State Street Index shows that institutions were ‘ahead of the curve’ in anticipating the risk rally this year.”
Sorry Libertarians, But This “Buyer Beware” Nonsense Is A Pitiful Defense Of Goldman Sachs
by ilene - December 30th, 2009 11:17 am
Sorry Libertarians, But This "Buyer Beware" Nonsense Is A Pitiful Defense Of Goldman Sachs
By Yves Smith, courtesy of Clusterstock
One of the things that has been frustrating in watching this debate is the peculiar propensity of quite a few observers to defend Goldman and its brethren, and to argue, effectively, caveat emptor. Contrary to the fantasies of libertarians, that is not in fact how markets, particularly securities markets, operate. In virtually every market in the world, when someone represents his wares as being sound and safe and they turn out to be “bad” and dangerous, the seller is considered to have some responsibility for the damage. Remember those Pintos that turned into fireballs when rear-ended? The pets that died from pet food laced with melamine from China? No one suggested that the buyers of those products were at fault.
Read the rest of the post at Naked Capitalism — >>
2009: The Year Of The Great Reversal
by ilene - December 30th, 2009 11:12 am
2009: The Year Of The Great Reversal
Courtesy of Joe Weisenthal and John Carney at Clusterstock
Deputy Editor Joe Weisenthal and Managing Editor John Carney look back at the year that was 2009. Here are some of the highlights:
- 2009: The year of the great reversal
- "The market proved that everybody’s an idiot"
- Reasons for the turnaround
- What might happen in 2010?
- People can NOT predict what will happen in the stock market
- Big risks in 2010: sovereign default
- Big risks in 2010: accounting scandals
Produced By: Kamelia Angelova & William Wei
More Video: TBI Calendar Click HERE >
Yes, dear, that’s a Nuclear Power Reactor They’re Building Next Door
by Zero Hedge - December 30th, 2009 10:03 am
Courtesy of madhedgefundtrader
Better drag your leisure suits, bell bottoms, and Bee Gee’s records out the attic. The seventies are about to make a comeback.
The nuclear industry, which has been comatose since the accident at Three Mile Island in 1979, is gearing up for one of the greatest comebacks of all time. There is absolutely no way we can deal with our impending energy crunch without a huge expansion of our nuclear capacity, which sits at a lowly 20% of our total power generation. France has already achieved 85%, followed by Sweden at 60% and Belgium at 54%, and the last time I checked, none of these Europeans were glowing in the dark.
Unless you’re an underpaid nuclear engineer toiling sway in total obscurity at some university, you are probably unaware how far the technology has moved ahead in the last 30 years. Generations I and II produced the aging “joint use” behemoths we now see on coasts and rivers, which generated both electricity and atomic weapons, but could potentially melt down if someone forgot to flip a switch. Think Chernobyl. Generation III has spent decades trapped on the drawing board.
There are over 100 Generation IV designs, and many are certain to get built. The most popular is known as a “pebble reactor,” which relies on a new form of fuel embedded in graphite tennis balls cooled with helium that is just hot enough to generate electricity, but too weak to allow a disaster. Also known as a Very High Temperature Reactor (VHTR), these plants operate hot enough to enable a 50% increase in thermal efficiencies. The built in safety of the design let’s you eliminate many redundant backup systems, cutting costs. No surprise that the only operating prototype is in China. Low grade waste can be stored on site, not shipped to Nevada or France. Other feasible designs include using thorium fuels, fast neutron reactors, and liquid lead, sodium, or salt cooling variants. Plants are also about to get a lot smaller too.
Speeding the resurrection of this once dead industry is some cheerleading from none other than the same demonizing, apocalyptic environmentalists that shut the industry down in the seventies (remember Jane Fonda in The China Syndrome?) That is helping shorten the permitting process from 15 years to four by confining new construction to existing facilities instead of green fields. Nuclear…
Will We Hold It Wednesday? $4 Trillion More Promised to Banks!
by Phil - December 30th, 2009 8:27 am
Man, I try to get bullish and then this happens:
The European Commission warns of a full-blown debt crisis for the eurozone, with half of the 16 nations at high risk of unsustainable public finances. "Governments will spend the next year and beyond balancing the urgent need to fix public-sector debt and deficits — without imperiling what appears to be a feeble economic recovery. Fitch warns in a December report that particularly the U.K. (which isn’t in the euro zone) and Spain and France (which are) risk being downgraded if they don’t articulate more-credible fiscal-consolidation programs during the coming year given the pace of fiscal deterioration." Even optimists expect a rocky road full of downgrades and bond-market punishment.
It’s not like we didn’t know this was happening, it’s just that investors obviously don’t want to know and, as Jim Cramer often reminds us – ignorance is bullish bliss. Of course government debt doesn’t seem to bother US investors so maybe we shouldn’t worry about other global debt either. The Trillions of dollars in stimulus spending bought the EU a 0.7% increase in their Leading Economic Indicators for November, now down less than 10% from it’s 2007 peak after dropping close to 20% last fall. Wow, stimulate a $14Tn GDP with $3Tn and get a 10% boost - why didn’t we think of this sooner?
S
imilar logic is being used today as GMAC will be getting another $3.5Bn injection of funds, adding to the $12.5Bn the Fed has already given them to them. The new capital will likely allow GMAC to avoid placing its ailing mortgage unit, Residential Capital LLC, or ResCap, into bankruptcy. GMAC had set the end of the year as a deadline for deciding ResCap’s fate after losses from loans made to borrowers with shaky credit dragged down GMAC’s results in 2009. The mortgage unit lost $2.7 billion through the first three quarters of 2009 following $9.96 billion of losses in 2008 and 2007.
It’s not GMAC per se that bothers me but the fact that clearly investors are betting on other mortgage financers as if GMAC is the only company losing money in 2009. We know what’s up with GMAC because we already own 34.5% of the company and they are coming to us for more. The rest of the $11Tn mortgage industry that isn’t FRE or FNM (who we’ve already pledged unlimited bailout funds to this week)…
US Consumers At Crossroads As Spread Between Visions Of Present And Future At Record Divergence
by Zero Hedge - December 30th, 2009 8:02 am
Courtesy of Tyler Durden
Yesterday’s most recent data from the Conference Board’s Confidence Index recapitulates very well the Economic Inquisition purgatory that living in America has become: pain and suffering now, coupled with the promise of salvation and financial bliss at some point in the future. Of course, on a long enough timeline we are all dead, so it is only fitting that the administration, whose slogan had something to do with tangible change, is gradually encroaching on the Catholic Church’s turf in an all out war for the souls of America’s taxpayers as tangible becomes increasingly ephemeral and, well, intangible (save for unemployment and the wads of electronic cash deposited in Goldman Sachs’ employees bank accounts – both of those are all too real). While the CBCC number came in at about the expected reading of 52.9 (from 50.6 in November), all of the “improvement” in confidence came from rosy future expectations, which rose to a two year high of 75.6 (from 70.3 previously). As for the present: current conditions plunged to another record low of 18.8. Never before has the differential between present pain and future hope been so wide.
The impact of this divergence politically is all too obvious. The voting population, which has been extremely patient, and keeps hoping that the future will finally bring something better and in line with oh so many promises, may very soon change their mood and realize that the present is here to stay, regardless of what the Fed manipulated capital markets demonstrate. When that happens watch for some interesting election fireworks on this side of the Potomac river.
Reading between the lines of the CBCC indicates that Obama and CNBC’s grand plan to get consumers to spend, spend, spend again has fizzled. Autobuying intentions dropped to 3.8 from 4.5 in November, the lowest read in over a year, when the SAAR was 10.5 million. The double dip in the auto sales will soon be upon us. Furthermore, buying intentions of major household appliances held at a weak 23.7: Cash for Bidets can’t come fast enough. Most troubling, however, homebuying intentions have plunged to a near-thirty year low: at 1.9, the percentage of Americans planning on buying a house is the lowest since 1982.
And just in case you thought that shellshocked US citizens will look to get the hell out of…
Guest Post: Rethinking The Art Of Military Planning
by Zero Hedge - December 30th, 2009 5:56 am
Courtesy of Tyler Durden
Submitted by Gregory R. Copley at Oilprice.com
It is often assumed that what preoccupies military planners is their attempts to define the shape of future warfare so that they can adequately prepare equipment and doctrine ideal to meet the threat. Evidence, however, shows that what most occupies their attention is how to adapt existing force structures and systems to react to emerging conditions.
The vast bulk of their attention, inevitably, is on the massive capital investment in weapons systems which last, often, a half-century — longer than the span of most political eras — and force structures and doctrine which have accumulated over decades, or longer. There is little scope for innovative, clean-sheet thinking, and even when that occurs, there is little ability to bend the vast bulk of the military and national machinery to the emerging requirements.
Anyway, absent a firm and demonstrable capability change from a threat area, any planning for change, unless it is with offensive weapons, is based on supposition and guesswork. Inevitably, then, change occurs almost entirely as reaction.
The International Strategic Studies Association (ISSA), undertook studies in recent years into how US forces failed to adequately anticipate, and even to react to, emerging patterns of warfare against them by irregular forces in Iraq. The use by these forces of improvised explosive devices (IEDs), and later guerilla rocket attacks, should have been anticipated from warfare patterns in Chechnya and in the Arab-Israeli wars, but the US was unwilling to learn lessons from these theaters for a variety of cultural reasons.
The result of these unexpected opposing tactical methodologies by Iraqi (and later, Afghan Talibani) irregular forces, was to be of strategic importance. US military planners initially responded to the threat — which they had not fully anticipated — by up-armoring light vehicles. The result was that the full, two stages of blast were not addressed. Slam-down (ie: the second stage of a blast event) caused a significant proportion of the deaths, even though up-armoring the vehicles had protected occupants from some of the first-stage blast. But the severity of injuries of those who survived slam-down was unprecedented in terms of numbers and outcome, and the cost of injuries to taxpayers was even more than the cost of deaths.
Worse, mission success was minimized, and the political cost of the deaths, injuries, and slow mission…
The Spanish Banks Start to Unload
by Zero Hedge - December 30th, 2009 5:43 am
Courtesy of Reggie Middleton
From the WSJ:
Spanish savings banks have begun selling off the large property portfolios they acquired as collateral from loan defaults, in an effort to improve solvency ratios, a move that risks further falls in property values that could impair the value of their asset books.
In Spain, the global financial crisis that erupted in 2007 ended a real-estate and construction-based asset boom, plunging the country into a recession that has yet to end, even as many other European economies have returned to growth.
As the unemployment rate has soared to more than 19%, residential-property buyers have defaulted on loans in massive numbers, as have property developers, overleveraged in a moribund market. As lenders have assumed the collateral on defaulted loans, local financial institutions—particularly unlisted savings banks—have collected properties valued at about €8.5 billion ($12.2 billion) over the past 12 months.
I was fairly confident this would come to pass. Readers should reference this post from last year: “Reggie Middleton on the New Global Macro – the Forensic Analysis of a Spanish Bank “. The first quarter was profitable, but that big bear rally really through this off. The investmen thesis is still sound, though. I may update this if the opportunity presents itself.
In Spain, BBVA, the second largest domestic bank, could see a massive deterioration in its real estate and consumer loan portfolio. The Spanish real estate sector is making a high horsepower a U-turn after years of a massive housing bubble that has burst – culminating in an unemployment rate that has risen to an outrageous 13.4% level. The power skid is showing no signs of reaching an inflection point, and we believe is only in the beginning throes of a sharp downturn. In addition, the banks‘ other key growth areas including Mexico, the U.S and South America are witnessing a slowdown in economic activity, restricting BBVA’s growth prospectus amid the current turbulent environment. With increasingly challenging economic conditions in each of these economies, BBVA’s asset quality has deteriorated sharply with non-performing loans rising to 36% of its tangible equity without corresponding (equal) increase in provisions. As the bank deals with these tough times ahead, we expect BBVA’s bottom line growth to remain subdued due to a slower credit off-take and higher provisions in the coming quarters.
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
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