Markets and Tells
Wednesday September 5, 2007
Like a lot of you, I feel the need to clone myself just to get more work done in the allotted 24 hour day. Possibly someday this may be a reality but for now, we continue to toil away working long hours and finding precious little time for relaxation. While I write this post the traders at Fast Money are doing today's show. I will watch it a little later with the aid of the DVR technology. As was mentioned on the program last night, the S & P Index closed at around 1490 yesterday. Previous closes at this number have resulted in a market sell off. Today we are down 143 points and change. The sub prime market situation is still not finished and will take a while to work out.
As much as I would like to be able to devote full time to this site and a few others I have in the design phase, my need to eat on a regular basis dictates that I continue to work my day job in the transportation sector, trucking to be specific, for a while longer. I work for a large national refrigerated truck line that is facing a number of challenges. Areas of concern in that industry include the weather problems related to agriculture, the pending change in the FMCSA Hours of Service Regulations, and to throw some more uncertainty into the mix, no one is really sure how the Mexican trucks coming into the U.S. will affect an already soft freight market.
Trucking is an industry that provides a tell as to how the economy is doing. In May of 2001 I was laid off from a driving position for a regional air freight carrier located in the industrial upper midwest. Freight was soft and when manufacturing starts to slow, the premium associated with air freight is hit hard. Suddenly the cost of transport becomes less critical than the time line. Notice the time frame, freight was soft in this sector ahead of the Sept. 11, 2001 attack. The economy for the industrial region around the Great Lakes had already began to decline.
Tyson cut its 2007 earnings forecast today on based on higher costs associated with beef and hog prices and some problem with beef exports to South Korea. I now nothing about the latter but the former is an easy one. Regions not flooding this summer are experiencing a drought. We have gone weeks at a time in Mississippi with no measurable rainfall. Likewise for our neighbors to the east in Alabama and Georgia. Floods and drought are not friends of agriculture, be it livestock or produce, neither fare well in adverse conditions.
On to some encouraging news. I have been working diligently behind the scenes on a complete site redesign for Jwrblog 2.0.1. It will, in my humble opinion, be the best product I have produced in the 3 plus years this site has been in publication. Look for a new look soon.
Call me old fashioned but when I read this next story at Bloomberg.com today, four words popped into my head almost immediately, "Tax Payer Bail Out". The part that got me was the lowering of principle to stave off foreclosure. Where does bail out enter in the picture? When the tax payer is asked to pick up the tab to keep the banks afloat. Time will tell.
U.S. bank regulators, facing the worst housing slump in 16 years, called on mortgage lenders to stave off foreclosures by cutting or postponing home payments for cash-strapped borrowers. The Federal Reserve, in a break with the free-market approach honed under former Chairman Alan Greenspan, joined with the Treasury Department in making the unprecedented appeal. They said lenders should try to refinance loans at lower rates to keep families in their homes and even urged banks to consider reducing the principal owed on a property before moving to foreclose.Bloomberg.com