A stark indicator of just how bad it is out there:
Union Pacific Corp. reported a 26% decline in third-quarter profit Thursday, citing a persistent slump in rail demand, particularly from the auto industry, in the face of the global recession…
…The Omaha, Neb.-based railroad operator posted earnings of $517 million, or $1.02 a share, down from $703 million, or $1.38 a share, in the year-ago period.
Revenue fell 25% to $3.47 billion from $4.63 billion, bogged down by a 30% decline in its auto-freight business and a 39% drop in industrial-products freight.
Analysts polled by FactSet Research were looking for earnings, on average, of $1.01 a share on revenue of $3.73 billion.
“As we enter the final quarter of 2009, business volumes seem to have stabilized, but at very low levels for Union Pacific,” said Chairman and Chief Executive Officer Jim Young, in a statement.
As in the earlier story we had of merchant ships anchored rather than plying the trade routes, it is indicators like this which show the true story of the economy. The froth of the DOW and banks cashing in on bail outs makes the headlines – but it is the fact that goods are not moving which shows our plight. No matter what the government or the banks say, until ship and rail traffic is up, we’re not getting anywhere on the economic front. You can’t even go entirely by industrial production numbers – the best measurement is retail sails, and goods being shipped. If people aren’t buying and retailers are ordering (and thus having goods shipped), then nothing is really happening out there.
For the past year we’ve merely spun our economic wheels – we’re huffing and puffing but not going anywhere. Moving money around from the Fed’s printing press to the Treasury vaults to the banks’ balance sheets doesn’t do a thing for the economy. It can get suckers to buy in to a stock bubble and it can get Obamaniac economists talking happy talk, but it doesn’t create wealth. It doesn’t, that is, create the situation where goods are made, shipped and bought. Until we start doing that – by making, mining and growing more of our own stuff – we’ll continue to waste our time…and slide ever further in to debt, making it ever harder for us to climb out.
HAT TIP: Mish’s
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