Submitted by John Rubino via DollarCollapse.com,
Each month one or two high-profile government reports show the US is growing, adding jobs and generally recovering from the Great Recession. But it’s not clear how that can be, when the part of the economy that makes and moves real things keeps shrinking. Here’s a chart, published recently by Zero Hedge, showing that US manufacturing has been contracting for the past year:
Meanwhile, the companies that move physical things around are falling hard:
Railroad stocks drop after companies give downbeat outlooks
Railroad stocks dropped sharply Wednesday, after both Kansas City Southern and CSX Corp. provided downbeat outlooks for the current quarter at an analyst conference.
The sector’s decline helped pull the Dow Jones Transportation Average, down 2.1%, much more than the 0.9% decline in the Dow Jones Industrial Average. Kansas City Southern’s stock was the biggest loser in the group, tumbling 7.1% on volume that was more than double the full-day average, according to FactSet.
The company’s chief financial officer, Michael Upchurch, said at the Credit Suisse industrials conference in Florida, that fourth-quarter revenue would decline in the “high single-digit” percentage range from year-ago levels, according to a transcript provided by FactSet.
Analysts surveyed by FactSet were expecting, on average, fourth-quarter revenue of $622 million, which implies a 3.3% decline.
CSX slumped 3.7% in active trade, after CFO Frank Lonegro said at the same conference that domestic coal movements have declined “more significantly in the fourth quarter than expected.” As a result, he said earnings-per-share growth is now expected to be about 3%. The company had said in October that it expected full-year EPS growth in the “mid-single digits.”
Among the more-active shares of other railroad companies, Union Pacific Corp slid 2.8% and Norfolk Southern Corp shed 2.8%.
One reason for the discrepancy between overall growth and real stuff is that most of today’s economy is made up of services, and they’re doing okay (until this month):
What is the service sector? Mostly software, restaurants, banks, construction companies, retailers, doctors and hospitals.
Can an economy thrive if it doesn’t make or move physical things? Intuitively the answer is no, because most of the services mentioned above either maintain the status quo (like healthcare and restaurants) or (like houses) consume rather than build capital. As for banking, in its current incarnation it’s almost certainly a net negative, draining capital from productive uses and funneling it to trading desks and political action committees.
The US, in short, is engaged in an experiment to see how long an economy can function with services growing and manufacturing contracting. As with so many of today’s monetary and fiscal experiments, no one knows when definitive results will come in. But the data so far aren’t encouraging.
Greetings,
It does make you wonder what this is like in, say, China which is a manufacturing country. Seems to me like they have an endless supply of young, single, unemployed young men to contend with. Nothing a good war cant take care of huh?
Merry Christmas every one. FedEx just informed me that my services will be required until January the 5th.At the moment they are running our butts off.At least for now business is good and fuel is averaging about 2.30 a gallon depending on what state your in.Makes for a good ending to the year. God bless
Somebody tell Stucky I have New Year’s resolution .I will no longer make fun of his masturbating addiction. bb
After New Years, 2016 will mark the beginning of a decline that few of you will ever forget. Enjoy the time with friends and family this holiday season, the times they are a-changing.
I guessed 2015 would be the bottom. Despite the market manipulation, the reality is this is pretty grim. I also guessed 2021 would be a better time.
The days start to grow longer in January but we still have some time to go before we reach the hemispheric warming period called Spring.
I’ve been away for a while. Where is Stucky?
I think Stucky is in mourning from the sale of his house falling through.
At least Rubino isn’t advising us to invest in Columbia
Serves him right for trying to sell to a copfuk, there was so much bad Karma in that scenario.
He would do so much better to sell to a nice, middle age, hetero-sexual, epicurean, white couple. While the bondage chamber with stripper pole in the garage was a draw for the copfuk, he should remove it if he plans to sell to normal type folks.
Admin- Stucky told me he had to paint two rooms and repair a couple of things so he has his hands full getting his house back on the market.
El C…That was funny. Don’t forget the manacles hanging from the walls in the basement.
The “economy” where I live is deader then fried chicken. You know it’s bad when lowes, home depot and a few other stores didn’t even hire seasonal workers this year. You walk into lowes and it’s a ghost town, like all it needs is tumbleweeds rolling down the aisles.
We have a Lowes and a HD to either side of us only a few blocks away. I practically lived there all of November when I was tiling a room and the kitchen counter. Sometimes I suspect I buy shit with the mental excuse that I might use it but it may just be an addiction.
I bought a smart key doorknob, $21, I re-keyed it according to the directions and now my old key works like a charm on a brand new, not wobbly, brass doorknob. I wanted to buy the whole she-bang for the front door and a matching deadbolt for the garage entry, a total of $400 but the sexy mulatta said I only needed the original doorknob. Women can sure spoil a good project.
Goldman Sachs has plan for investment banks to issue their own currency
Submitted by cpowell on Thu, 2015-12-03 18:39. Section: Daily Dispatches
Goldman Sachs Files Patent for Virtual Settlement Currency
By Jennifer Hughes
Financial Times, London
Thursday, December 3, 2015
Goldman Sachs has made a patent application for a cryptocurrency settlement system in a move that underlines bank hopes that the architecture behind bitcoin can revolutionise global payments.
The application for a new virtual currency, dubbed “SETLcoin” by the bank, said it would offer “nearly instantaneous execution and settlement” of trades involving assets including stocks and bonds.
Banks have been racing to tap the power of blockchain — the ledger system that backs digital currencies such as bitcoin. Harnessing the technology has been likened to the changes wrought by file transfer systems on the music industry, or to the effect that email had on communication.
Although electronic dealing platforms have increasingly made front-office trades virtually instantaneous, the actual swapping of payments often still takes days, creating risk in the banking system. …
… For the remainder of the report:
http://www.ft.com/intl/cms/s/2/b0d8f614-997c-11e5-9228-87e603d47bdc.html
end
There were 11 items on the inspection report.
Yup … painting two rooms. Also put down a new floor — (I was going to say “laid a floor”, but you fuckin’ perverts would take that the wrong way) — in the laundry room.
But, by far, the biggest item on the list was “visible sag in the rear roof”. So, I spent several days studying articles and watching youtube vids, and even getting one of Ms Freud’s clients — a contractor of 20 plus years — to give me some advice. Amazing what one can learn online. The project is not done yet, but coming along fine.
I’ll probably be back sometime next week. Not that it matters. I have absolutely nothing new to say that I haven’t said ten thousand times before. I’m old news, really. It’s also nice not getting shit on for a few days. Besides, who the hell cares about my dumbass articles about cars, churches, beef broth, and horse fucking etc etc. now that HF is posting more often these days about turkeys, wasps, and life on the farm .. the Steinbeck of our age. I got nothing new or interesting to write about, and that’s a fact, Jack.
Stucky, is that sag on the roof outside or ceiling inside? Your not your usual clear self.
See what happens when you stop writing regularly? Your writing skills start to deteriorate until pretty soon you sound like BW.
Don’t do it for us, man do it for yourself, before your mind goes the way of your erection. South.
Stuck- keep up the good work, hurry back.
Things are definitely looking pretty bad. Much worse than the major indices show. One of my models is showing a very high probability of a major selloff within 10 days. My indicator doesnt agree with that model, otherwise I would be sounding the alarm. Either way, no one in their right mind should be long stocks right now.
It’s ok Stucky. You both have valuable insights. Sometimes I like to contemplate the deeper meaning of life and then sometimes I just feeling like rubbing one out. It’s all good. Love Ya !
AW Mr. Stucky,
Total drag. We had a list as well. Then a second inspection for
the basement bathroom. Turns out the concrete wall was a % “off”
and that resulted in a nice 10K dig and redo project. A detector for
radon and fan system was required, another 2.5K. There was more,
I forget.
We really wanted to get out of the house. West walls were more window
than wall. How do you secure those? Gun shots from across the river
nightly, constant sirens, and foot traffic on our road (no sidewalk) going
to the nearby high school. The house was paid off so no profit, but not
a big loss either.
The process was anxiety inducing and even insulting at times…but, it did
get done. Your situation is common now. Read on Armstrong today that
some Dodd-Frank rules went into effect 10-3-15 that will make buying-selling
even more arduous.
Again, please get some land and at least a trailer on it so you have a retreat.
Bare bones if need be. See M.D. Creekmore’s book, “Dirt Cheap Survival
Retreat,” for some info. My Mr. was looking at 80 acre unimproved acreage.
Yikes. I got busy looking and found a farmhouse, (quite sturdy), new septic
installed, (off the selling price) and we wrote a check and bought it. This
was 7 months before the house sold. No palace and no big acreage…but a stream,
a sound basement (point well machinery in the basement = fail/current law,
but grandfathered with a cash sale) so another 4K off the asking. The point
well is fine (installed by a neighbor that explained it to us)…we kept it, & recently
replaced the (basement) works…including a hand pump accessory. We built a 50X30 garage,
installed fencing around the house (dogs) from a firm out of state = 1/3 the cost
of a city fence. Also new wood stoves and a second propane tank.
Okay, I have convinced you. Now you have to convince your Mrs. She will have
to give up high heels and “fashion.” It doesn’t play in the country. However, it is so well worth it. People are different here. Friendly, but mind there own business.
Good Luck!!
Suzanna
add: their not there
and taxes…city = <8 K
country = <1K
The road is plowed and the trash gets picked up
El Cunning: “I guessed 2015 would be the bottom”. I don’t think so but then I thought in 2008 that Greece would take everything down. I hope I continue being wrong because now I think late 2015 was the year the world economy hit stall speed and 2016 will be The Crash. PS: The voters collective IQ did hit stall speed in 2008 when the Useless Idiots elected a Commie Muslim who is even Cuckoo by their own deplorable standards; now I think the only guy who isn’t a Cuckservative with the only workable Survivability Plan for the USA (since Ron Paul retired) couldn’t quote one verse of the Bible and I think Stucky even thinks he’s nuts. Another election where out of 330 million people, the best choice seems to have a sucking wound in the head but the rest of the Cucksuckers go downhill fast from there. Say more prayers and build more shelters.