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Friday, September 21, 2012


Not looking particularly brilliant. Waterways:
Rail - biggest factor here is that YoY autos are slowly sagging.  It's like watching a balloon with a leak. 

Waiting on ATA trucking tonnage.

Based on the drought, I am not sure water frieght is a good indicator. It may be reflecting environmental, not economic, factors.
Top 5 Causes of the Great Depression

5. Drought Conditions


I defer to you on your banking knowledge being exponentially greater than mine.


Is there really a regulatory problem so large than Too Big To Fail trumps Too Local To Exist? I wouldn't doubt it, but if it is true then all we've done is make banking riskier for everyone rather than safer.
M_O_M has said that Dodd Frank is hell on Community banks. Legal and compliance fees the TBTF banks can absorb will be the unwinding of the community banks. I suspect that was part the negotiations on the bill. This is not an "unexpected consequence".
And for those whom Dodd Frank doesn't motivate, AG Holder will.

Anon 7:43,

The rivers are plenty high to allow freight traffic. The problem is more likely the high prices on bulk commodities due to the impending reduction of supply. Don't know if you'd call that environmental or economic, but it's sure going to hit both consumers and producers in the pocketbook.

Anon - I had checked into that, but given when the downshift in trend occurred, and the correlation with rail numbers for basics such as ores, coke, metals and scrap, I think the primary signal there is not related to water levels.

Rail is definitely not affected by water levels.

Rail through April
Current rail
Look at YTD numbers for the various categories.

I am waiting for Septembers water freight with great trepidation. The shape of that curve will tell me something about how low we will go.
Charles - Dodd-Frank is arsenic for CBs. Most specifically, the new consumer finance board is cyanide for CBs.

The problems are occurring on multiple levels - in the current environment, CBs need to jack up consumer lending but will have terrible trouble doing so due to regulations, and since everyone's short on credit-worthy borrowers, the bigger banks are extremely competitive on commercial right now.

That link is very good - the problem for that bank was not poor credit decisions, but an environment in which they couldn't lend enough related to their deposit base. This, paradoxically, makes you less competitive on your deposits, because you have to control loss risks and expenses there adamantly, and you can't get returns high enough to remain competitive on rates, so you are going to see your loss rates rise as you lose bigger stable deposits.

So their decision is right for the shareholders - staying in business as a solo operation would entail assuming higher risk on ever diminishing real returns.

CUs are also in deep trouble, but they tend to have a little more cushion because they don't have to pay taxes.

I wrote years ago that the best advice I could give most CBs after Dodd-Frank was to get the hell out, and I haven't changed my mind at all. In fact, recent regulatory moves have reinforced my opinion. This is a very toxic market for CBs, and although some in certain areas with good management and better economic conditions can still make a go of it, many of them really should be shut down.
No, weight is limited by coupler strength, length is mostly limited by physical limitations of the territory and air pressure at the rear of the train.
Bigg Boss 6
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