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It's Probably Nothing

By Kate on October 11, 2012 10:00 AM | 6 Comments

Fedex to cut thousands from workforce.

6 Comments

KevinB | October 11, 2012 11:07 AM | Reply

Richard Russell, author of the Dow Theory Letters, has been harping on the fact the Dow Transportation average has not been close to a new high, while the Dow Industrials were making new highs a few weeks ago. His reasoning: if the economy is reallly moving, then goods need to be shipped, and the Transports (rails, air, trucks) would be gaining ground as well. But the Trannies have been falling, which makes him suspect the economy is not "in gear" - that is, the gain in the Industrials is not due to real economic activity, but rather, manipulation by other forces. (Hi Ben!)

He expects to see the Dow Industrials tumble over the next few months, although he also suspects that Ben will do everything he can to prevent a falling stock market going into the election; if Romney gets elected, Ben is finished at the Fed.

ct | October 11, 2012 11:17 AM | Reply

Almost sounds like FedEx is instituting a new method of tying costs to revenue gains or losses. The rationale that transportation should reflect economic activity possibly faster than any other indicator makes sense. However other factors such as competition and input costs also affect this calculation.

Similiar situation with the Dry Baltic Index. Seems to be a solid number until one realizes how much new tonnage has entered the market and how badly revenues have been hit by increased competition.

sasquatch | October 11, 2012 12:37 PM | Reply

Labour and fuel(energy) are the prime variable costs in transportation.

Over-regulation affects both.

The Phantom | October 11, 2012 4:29 PM | Reply

Hmm, would seem to indicate a big drop in internet business, eh? No shipping...

Fearless Leader | October 11, 2012 5:34 PM | Reply

Nephew works at United parcel.
Delivery is off about 20% going into the christmas season. He thinks Internet business will make up slack.

marc in calgary | October 11, 2012 5:52 PM | Reply

Somehow this is related to the Baltic Dry Index.

and not reflected in gov't figures that state unemployment is down.

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marc in calgary: Somehow this is related to the Baltic Dry Index. and read more
Fearless Leader : Nephew works at United parcel. Delivery is off about 20% read more
The Phantom: Hmm, would seem to indicate a big drop in internet read more
sasquatch: Labour and fuel(energy) are the prime variable costs in transportation. read more
ct: Almost sounds like FedEx is instituting a new method of read more
KevinB: Richard Russell, author of the Dow Theory Letters, has been read more

It's Probably Nothing

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