For those fascinated by financial history, like me, there is an excellent blog summarizing the day in news from 1930 (http://newsfrom1930.blogspot.com/). One of the notable aspects of news from the fall of 1930 is the amount of cautious optimism about how things are turning up. It sounds quite similar to this fall:
F.
Purnell, Youngstown
Sheet & Tube Pres.: “There are plenty of evidences that the steel industry
is looking up. We have passed through many months of depression but that is all
behind us. … Industries consuming steel are increasing activities.” (10/16/30)
Many of the Q3 earnings reports so far have been “fair reading,” especially in
light of the pessimism going into earnings season (10/22/30)
One fact I found interesting is the parallel in the decline in rail car loadings, 2009 versus 1930, which I have put in a table below:
Rail Car Loadings: First Week in October
|
|
Current Year |
Year Earlier |
Change |
|
1930 |
954,874 |
1,179,540 |
(19.0%) |
|
2009 |
273,429 |
330,228 |
(17.2%) |
For those who might think this is irrelevant, given the diminished role of railroads in our modern society, take a look at one of the better measures of "real" economic activity — Port of Long Beach container statistics. The story is quite similar:
Latest Month
Container Trade in TEUs*
|
|
September |
Fiscal Year to |
||||
|
|
2009*** |
2008 |
%Change |
2009*** |
2008 |
%Change |
|
Loaded Inbound |
224,924 |
279,137 |
-19.4% |
2,612,227 |
3,337,717 |
-21.7% |
|
Loaded Outbound |
109,337 |
129,630 |
-15.7% |
1,331,872 |
1,782,298 |
-25.3% |
|
Empties |
106,103 |
146,070 |
-27.4% |
1,338,286 |
1,616,741 |
-17.2% |
|
TOTAL (T.E.U.) |
440,364 |
554,837 |
-20.6% |
5,282,385 |
6,736,756 |
-21.6 |
Is this information "tradeable.' Not really, unless you are looking into companies like UPS and UNP, both in a tailspin due to earnings I believe. But does this information add some big picture conviction to my conclusion that the current rally has gone too far, too fast? No question.
