It’s going to be a tough slog forward.
By Wolf Richter for WOLF STREET.
There had been hopes that April was the bottom for the goods-based sector. And that May would be the bounce, the beginning of the V-shaped recovery. In retail land, there was a bounce in May as consumers started spending their stimulus money, sending ecommerce skyrocketing, and triggering a big bounce from abysmal lows in some other retail segments. But that has not been the case in the rest of the goods-based sectors, such as manufacturing, oil-and-gas production, construction, and others. Just this morning, the Census Bureau reported that housing starts in May were down 23% from May last year.
These goods-based sectors need and produce goods of all kinds, and shipment volume tracks them. Alas, shipment volume by truck, rail, and air in the US plunged by 23.6% in May compared to May 2019, and by 28% compared to May 2018, according to the Cass Freight Index for Shipments. The year-over-year plunges in May and April were the steepest since January 2009 and April 2009, which had been the steepest in the data series going back to 1990:
The Freight Recession started long before the pandemic – May was the 18th month in a row of year-over-year declines. But the magnitude has changed. When in April shipment volume had plunged 22.7%, it was hoped that this would be the bottom, but it has now turned out to have been a false bottom.
“We are now close to 80% through the second quarter of 2020, and we see volumes down double-digits for most carriers across most modes in the U.S., including truckload, LTL, intermodal, and rail,” Cass said in the report.
“Ecommerce (including parcel and big and bulky last mile) remains a hot area, as long-term trends in consumer buying patterns were accelerated in recent months. Customer exposure is also the biggest differentiator in terms of carrier to carrier performance,” Cass said.
This is the split in the transportation sector: everything having to do with ecommerce is hot, and the transportation business that is part of the ecommerce supply chain – including Amazon’s own delivery network, FedEx, UPS, the USPS, and others – are struggling to keep up with consumer demand for parcel shipments and last-mile delivery.
The supply chains and transportation services for supermarkets and grocery stores of all kinds are also pressured by consumer demand as consumption has shifted from offices, hotels, restaurants, etc. to the household.
But the vast number of business-to-business shipments – including the entire industrial sector – have dropped.
The stacked chart below shows the seasonality of the transportation business. Each line represents a year. The top black line represents the banner-year 2018 when companies were front-running the potential tariffs. This boom ended in late 2018. By December 2018, shipment volume was already down year-over-year. And 2019 (green line) continued to deteriorate.
This year (red line) started out way below 2019, and when the measures to contain the pandemic hit in April, shipment volume plunged. The slight uptick in May was less than the normal seasonal uptick, and compared to May 2019 and May 2018, this May fell further behind. Both April and May were the lowest readings since 2009 (brown line):
The Cass Freight Index tracks the shipment volume of products for consumers and industrial users, by all modes of transportation, but is more concentrated on trucking. Bulk commodities, such as grains, coal, or petroleum products, are excluded from the index.
Rail traffic: also hoping May was the bottom
Rail traffic in May plunged 20.2% year-over-year, after having plunged 21.2% in April, according to the Association of American Railroads – with carloads down 27.7%, the worst decline in the data going back to 1989, and container and trailer loads (“intermodal”) down 13%.
But May might have finally been the bottom for railroad traffic. During the last week of May, rail traffic plunged “only” 17.3% year-over-year, with carloads down 24.2% and intermodal down 10.6%.
“It is somewhat heartening to note that 11 of the 20 carload categories, including several major commodity areas, improved their showing versus 2019 when comparing their current loading rates to those we have seen the last four weeks,” the AAR report said.
“Perhaps most notably, automobile loadings improved to about one-third the normal level as assembly plants began the intricate process of reopening. While this is still a long way from where we would like to be, it is far better than the ten percent of norm of only two weeks ago.”
This is what it has come down to: “…improved to about one-third the normal level.” Meaning down only 67%. It’s a start. The week in mid-May, they’d collapsed by 90%. For all of May, carloads of motor vehicles and parts were down by 75%.
Shipping expenditures plunge.
The amount of money spent by shippers, such as industrial companies or retailers, plunged by 21.2% in May year-over-year, the steepest drop since 2009, after having dropped 18.2% in April, according to the Cass Freight Index for Expenditures. This is a function of both, shipment volume (which had plunged) and freight rates (with some rates up, such as air freight and rates for ecommerce shipments, and other rates down, such as mileage rates in trucking). And the decline in expenditures from April to May came despite the usual seasonal increases during that period:
For truckers, this has been tough. The average US spot rate in May for hauling a van trailer dropped to $1.60 per mile, down 11% from the already low rates in May last year, according to DAT. The average contract rate dropped 12% to $1.99 per mile. For hauling flatbed trailers, the average spot rate in May dropped 16% to $1.90 a mile; and the average contract rate dropped 11% to $2.38 a mile.
There too is hope that somewhere in May was the bottom finally, and average rates have ticked up in recent weeks – even if it’s just due to seasonality.
“By and large, spring was not kind to carriers, so the higher rates we’ve been seeing in recent weeks are a welcome sign for trucking companies,” says Matt Sullivan, editor of DAT Carrier News, in a blog post. “If nothing else, this typical seasonal trend provides at least some piece of normality in what have otherwise been turbulent times for truckers.”
So perhaps, May was finally the bottom for the goods-based sector. Factories are reopening. But oil-and-gas production – a huge industry with a large impact on manufacturing, transportation, construction, technology, commercial real estate, and others – remains in a depression. Over 30 million consumers have lost their jobs, and that has hit consumer spending, but the hit is now being softened by spending the stimulus checks and the additional federal unemployment compensation of $600 a week. But the stimulus check was a one-time affair, and the additional $600 a week will expire at the end of July. And it’s going to be a tough slog forward.
The asset class of vintage cars has been having a hard time, with the most sought-after Ferraris at the top of the list. For example, the price of a 1958 Ferrari 250 GT California Spyder LWB is down by 29%. But “Affordable Classics” sizzle. Here are the cars and indices. Read… Asset Class of Classic Cars Sinks, High-End Hits 5-Year Low, Priciest Ferraris Drop the Most. American Muscle Cars Fall to 2007 Level
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Likely correct that May was the bottom at least for a while. The extra unemployment benefits may expire soon, but are likely to be replaced with either a scaled down version or replaced with something else.
It’s hard to imagine they won’t come up with something, not least in an election year…
The state where I live is planning on giving the unemployed $1500 to go back to work.
May not be the worst idea out there, considering that many beneficiaries are said to be getting more on the enhanced unemployment benefits than the pay they’re supposed to replace.
Keeping in mind that you generally get more of what you subsidize, overpaying people not to work is not exactly the surest route to reducing unemployment.
Some are defending it as an indirect way to stimulate the economy (whatever that means) because it puts more money in consumers’ hands. But so would more of the Economic Impact Payments that everybody receives … without creating perverse incentives.
My nephew in Portland, Oregon, brags that his wife — a masseuse– makes more money on unemployment than by working. She is in no hurry to get back to her job.
Its the only thing the Fed can do now that the rich are not spending and there is no trickle down.
The working class is spending every dollar they have. Mean while, private airplane and yacht sales have plummeted. Truffle prices have collapsed grape prices are the lowest in a decade.
Yes, with truffle prices cratering, it is just about time for some unnamed Fed representative to tell WaPo all about the horrors of deflation.
Just like 2002.
And look at the magnificent successes of Fed policy since then.
Last week I brought visited a local tire shop for an emergency replacement pair of new tires. The owner basically apologized and said he didn’t have enough staff to do the install and balance because his techs that he had to lay off during the forced shutdown didn’t want to come back to work because they were better paid by the generous unemployment benefits. After chatting, he referred me to a another shop nearby with an apology. He lost $500 of my business, and I’m sure other jobs as well, not due to lack of Customer demand but an inability to supply that demand.
There are multiplier effects and the reverse of those effects, which might be called vicious circles. We are and will be experiencing the loss of multiplier effects and vicious circles.
As American small businesses are facing more and more funds shortfalls, they are limiting their expenditures. Unemployed Americans are not going to be splurging, unless they have substantial savings and reports that most Americans would be hard-pressed to meet a sudden, minimal emergency cost indicate few are in that position.
Thus, we are in a situation in which America is heading into cycles of infection peaks as other countries are slowly reduce their infections, test for and trace their contacts, and re-instate their economies. The “Federal” Reserve banksters are busily trying to transfer as much of America’s wealth as they can for their cronies while most Americans remain ignorant.
This does not bode well for Mainstreet or ordinary Americans. Worse, foolish persons are taking steps that will result in more explosions of infections: medical providers will speak up about this foolishness when the ICUs again start to be overwhelmed. I sure hope that the announced vaccine or monoclonal antibodies or anything else can be mass-produced rapidly and allow the USA to gain control of this epidemic. Watching the evening news has become gut-wrenching: repeatedly hearing news of new disasters and stupid decisons.
Government shuts down small business, including retail, while Amazon work camps work overtime with the new found business.
All just coincidental, right. Right?
While I agree with what you say in general M, I would also add the very likely eventual conclusion of actual scientists of the kind who rely on the currently accepted models of the scientific method is that sooner or later everyone susceptible to this virus will get this virus.
So sooner or later it will be up to us as individuals to decide how to defend ourselves from the virus and how to deal with it if and when we are infected.
WR has pointed out one of his choices, checking to see if all inside a store are wearing masks, going in to shop if so, with which I agree and do similar.
As a ”pre-boomer” who reads all over the world thanks to this wonderful site and others, I read about this virus in January, and have been taking the steps I want to take since to put off being affected.
With immune so impaired that I cannot take vaccinations anymore, (though I had all available decades ago to go to SE Asia, Europe, India, etc. and contacted none of the diseases, so am a fan of vaccines properly administered,) I certainly have tons of hopium that one or more vaccines will be developed, and will work, and that everyone who wants to gets to have one.
My only serious challenge from the continuing ”lock downs” is the library is closed still, so part of my ”stimulus” is going to buy books, especially old faves such as WEB Griffith’s early work and Patrick O’Brian.
Other than that, just trying to keep our liquidity budget in good shape in case the less liquid assets get requisitioned as has been mentioned here and elsewhere.
You might be right, because no vaccine was ever developed for the SARS virus: the vaccines developed reportedly caused overreactions of the immune system. We may all get infected eventually. However, I hope not, because I have older parents and children.
If all or 60-80% will get infected, I still hope that the infections occur VERY slowly. Also, it might be (speculation that I have heard) that if you are exposed to a lower viral load initially, your body has a chance to defend itself and develop antibodies.
Otherwise, if say 5% of the remaining, uninfected US population were to get infected and need hospitalization to survive, we are talking about the need to treat many more patients than we can in our existing hospitals: we just do not have enough oxygen bottles or hospital beds or other treatment resources to treat that many persons. You can guess what may happen then if all beds are full.
Thus, the results would not be great if our hospitals were overwhelmed– in any county. Therefore, even though it is terrible for the economy, if we do not want to have thousands of additional, unnecessary deaths, we have to use masks, practice social distancing, lockdown in areas where infections are spiking, repeated hand washing, and follow the recommended guidelines. (Given what I understand happens when someone infected talks or sneezes or coughs in an enclosed space with the windows closed, I think only masks and goggles really have a good chance of protecting you.)
I have family who lived in highly infected zones and many of them are doctors, so I always remember how overwhelmed hospitals have become and what doctors have to do then to triage patients: i.e., make terrible decisions to give full treatment to some and give less treatment to older or weaker patients who are less likely to survive.
I forgot to add: people who survived coronavirus after hospital treatment are now getting bills in the hundreds of thousands for medical treatment or more. One report was that a person who survived was treated and later received a $1.1 million dollar bill. That is one more reason to wear masks and goggles.
Also, reportedly, most US patients that are put on ventilators cannot survive without them. Would you like to die or be dependent on a ventilator for the rest of your life?
Politicians are trying to entice businesses and companies while slapping even more restrictions on top of the job decimating one currently in place.
Bad time to even think of opening one up.
Definitely true, especially, as across the country there are various grant programs, but, most require you to have been in business since last year. Between lower rung employees being paid more to be unemployed and many existing businesses having free employees for a couple months under the payroll protection program, which, might be extended. It not a good time to open up any business requiring employees.
Parts of this were unavoidable, but, I wonder what the real reason for the extra 600 a week for unemployed is really for, in theory, they given free money, would be the most likely to spend it right away. But, that would only distort the economy.
This is on top of commercial real estate developers over-producing buildings, even as many were already vacant or the business occupying many of them on verge of bankruptcy, but, still keep rent/prices artificially high.
“That might distort the economy.” Hahaha, thats a classic! You should be on SNL.
Consider economic distortion to be the new normal.
So we have found MMT DOES work, if all of the money goes to people who won’t spend it. Guess who that is. Unlimited QE IS possible, as long as you don’t care about the permanent underclass it creates.
No matter how screwed up the economy is, it can get screwed up more, until it either collapses or is at least partially reformed.
I live near two trans-continental railways, and a lot of trains hauling tanker car after tanker car of North Dakota shale oil would rumble through multiple times a week, as they headed west to refineries (maybe export, too) and the empties eastward. Now these trains are the exception.
I have to cross a track near an industrial area / railyard and traffic used to get backed up at least 1-3 days every week or two. Now? You almost don’t see or hear a train.
PPP is running out.
Then the real layoffs start!
Unless it’s extended, considering the number of CCP19 infections could be about to jump, especially, because, of the protests.
I’d say the PPP has a pretty good chance of being extended, although, it might be less generous next time. Maybe only paying 50-75% of wages. But, possibly for a longer amount of time.
Blue collar layoffs happened first, now waves of massive white collar layoffs/redundancies/early retirements are commencing.
But, the politicians are going to spend their way down.
Still hoping some magic wand will wave the debt away.
It will be a lot of people. Assuming, even after CCP19 is under control, we are in recession. There would be a large push to automate as many jobs as possible, but, especially, white collar jobs. The impact of this could be so enormous (it will take place over years), it will force changes to how America works. A combination of re-industrializing America and lowering the number of hours worked in a year, might be the only way to prevent mass employment. I’m talking massive 20 to 40% unemployment.
June is going to be worse. Normally we’d be booking 30-40 shipments daily, currently running less than half of that. And we’re already booking into OCT, so I do have some idea of what the rest of the year looks like.
Without prying to deeply can you share what type of shipments you’re writing about? Just curious.
Container and breakbulk. Surface (ocean going) shipment. Rail and trucking on either end. Worldwide.
Thanks for sharing with us
In my opinion, this is no where near the bottom. We are now looking at a second wave of Covid-19 and like the virus, we will have a second wave of collapse in employment and purchasing, not to mention another leg down for stocks.
Can you do an article about State and local government
Layoffs ? It seems to me there will be significant reductions in government services such as education, DMV, road maintenance, libraries, hospitals, etc., as there surely will be a significant reduction in revenues due to the massive unemployment situation as well as a reduction in sales tax collection due to the massive downsizing of the economy in general.
I got dibs. I already asked Wolf to do a number on the advertising and print industry.
Advertising and print industry would be appreciated!
If your asking for print industry than also the buggy whip industry
On the other hand, that could mean 2X the QE and 3X the Treasury ETF buying we’ve had so far = Dow 50K.
Hope everybody’s not down just because you can’t scarf up some Hertz stock. Bet Powell snapped his fingers and shook his head “you can’t win them all”
Agree with your conclusion above jpup, but IMO we are not anywhere near in time the ”second wave.”
So far, USA is in the second inning of the first wave, with the virus up to bat and doing well because of the very clear confusions regarding protocols, etc., etc. that was one of the very clear and good reasons for the lockdowns; the other being the almost certainty of the ICU facilities all over USA being overwhelmed that is now happening in some places.
But at least we are finally into the top of the second!
At approximately 4 months per inning so far, we have a couple of years to go until this particular virus game is over..
Maybe subsequent innings will be shorter, as is frequently the case, especially when it is a rout, but only time will tell us that.
Expect the ”real” second wave (3rd inning) in the fall, eh,,,
As long as that Money Ptinter goes Brrrrrrrrrrr…….. Spraying out them there fiat dollars there is a chance that the over spray might by accident hit some down out regular schmucks just trying to survive. For those lucky few in the spray its +100% bond purchases and Dow 50k.
Why the bottom?
The more Americans get grossed out by their own consumerism, the better (less damage) the environment will be. What’s not to like?
We need to shift to an anti-consumerism mode ASAP. If it takes a little bat to get us to wake up, so be it.
‘If we dont go back to destroying the earth soon the economy will collapse’
credit – read it on the internet
Yep – I said that on another article on WS.
Unfortunately…. it is true.
It’s going to be tough to throttle back on consumerism and have an economy. Since consumerism depends so much on China, the US economy really doesn’t really get a jobs bang for the buck like the postwar years. So consumerism would have to be replaced with what?
> So consumerism would have to be replaced with what?
Focusing on fulfilling the basic needs: housing and food which the US has been failing at, crucially housing affordability in Democratic cities is lacking to a shocking degree.
The idea should be not to screw up future generations as much as consumerism has done so far. Also, enough about healthcare affordability until housing affordability is solved: homelessness was at its peak even pre-pandemic. We did ACA already, time to move onto building multi-family like there’s no tomorrow in areas without housing affordability which is much better for the environment than single residential housing.
Building more dwellings for people to live in will just create more consumerism to fill the houses with furniture, appliances, clothing, you name it!
Food requires a grower, supplier, trucker, retail outlet, packaging, waste disposal, etc. More consumerism.
Like it or not its the other C word that will need addressing
“So consumerism would have to be replaced with what?” Endeavor, that is a terrific question and almost impossible to answer or accomplish except by fantasy….. LOL, but maybe tax the rich (burst the supply side bubble) and use the money to build infrastructure and for education in state of the art manufacture and research for the bottom 95%. Eliminate foreigners from attending our universities. They represent around 25% of US college students and go back home with our technology. This will also bring down university costs significantly. Stop federal government subsidizing all of our hospitals which will dramatically bring down healthcare costs. Repeal all the new laws enacted in the last 25 years that enabled deregulation. Allow foreigners to buy only our government issued bonds and not our real estate and businesses. No more bribing our congress and politicians Tell “our” multi-national corporations to stop setting up shop in foreign countries if they want “government assistance” and no more stock buybacks. Reduce the powers of the fed and enable transparency such that all of our citizens can see their monthly spending. Set up laws to put federal reserve members in prison if they commit acts of treason like they currently are doing . Restrict foreign goods entering out country by a certain yearly percentage such that our trade deficit goes down around 5% per year. Start reducing our federal, state. and city budget deficits, et al by 5% a year, thus increasing our savings rate by the same………..And then prepare for a horrific recession and maybe WWIII.
In brief, put the government in control of absolutely everything. Require government permission to do anything. 100% government, that’s the ticket. As anyone can see, government has continuously improved everything it’s touched for decades. What a marvelous insight. I vote Dr. Spock for dictating to everyone. He’s obviously a genius.
C’mon Lisa, give the spocked one a brek, break, brake, or broke,,, which is where we would all be fairly soon with some of his (and to be sure, most anyone’s) ideas that emphasize guv mint control.
While we certainly are, “in a fine mess you’ve gotten us into Stanley” IMO there will not only have to be some really cooperative and creative activities on each and every side of all the ”aisles”,,, there is also going to have to be some ”privations” not commonly seen in recent years, but more like what was the case in the first half of the 1940s.
Can we do it??? YES,,, will we do it??? maybe sooner or later when there really is no choice.
Attention Hook N vet, you add nothing to the conversation that protects the bottom 95% from the criminals at the top that have destroyed this country. Actually, if you read my comment carefully, government spending would be cut slowly over 25 years, so that there would be no government deficits and no trade deficits. That is NOT government control. Your do nothing policy would lead to a Chinese takeover and dictatorship. The latest polls show that 80% of the protesters are protesting their economic state. I do not think that they are going to stop protesting until US capitalism is brought back and the global plunder of the US to turd world status is reversed.
PS Hook, yes, I am a genius, almost, but not quite as smart as Trumpsky.
It seems corporations and banks are thriving not so much from earnings but stock values. I get the sense we are going to see a lot more layoffs as a way to boost earnings and the Fed will continue to buy their (crappy) bonds to keep them out of trouble.
We’re still at Y2K jobs numbers with more layoffs on the way along with small business and retail closing right and left. Who can say if there will even be many part-time crap jobs available?
Feels like what we have now is basically a house of cards with multiple cards taken out of it.
The US is a consumer driven economy, and the government and the media has basically taken out the consumer with a combination of the virus and now protests. Having realized this, the government is frantically trying to prop up the consumer. But this is a situation where they are going to run out of bricks before the water recedes.
What will happen when the stock market finally catches up with reality and it tanks 50% to 60%. Sooner or later, asset prices are going to collapse because they’ve been supported by the consumer, and now that consumer is done. OUCH.
Dave Portnoy (the sports bettor) said it already: “The stock market is not the economy”.
The stock market might fall 90% and the Fed would be ok, as long as it falls 90% from 500K. That still gives you Dow 50K.
The Fed will continue to protect the rich.
Welcome to the PRA: People’s Republic of America. It’s PRC done American style!!!
Yah, have a hard time believing Fed would let the stocks go down anything near 50%. We’d see a Fed balance sheet of 20 – 50 trillion and Fed buying stocks before that happens. Doesn’t the Fed intervene massively every time market declines 20%? Often even less than 20%.
There is a fine line of Fed intervention. First, I think as others have pointed out, the Fed’s ammunition has become far more limited than it had during 2008.
The rate cuts last year didn’t help, and the 1.75% cut in February/March was a disaster in the making, and sent all the wrong message. All this helicoptered money and buying of ETFs is slowly eroding the Fed’s credibility, they are well on their way to becoming the ECB or BOJ in terms of credibility, all they have to do is to take that one next step and go NIRP.
At this point, credibility still matters somewhat to the Fed. In that light, I think Jerome should carefully consider opening his mouth. In fact, the smartest thing for him to do is come up with a cogent and measured set of response (according to him), and then take the exact opposite position…
No, on second thought, he should just keep his mouth shut, as the old saying goes, if you say nothing, people can only guess you’re an idiot. The second you open your mouth, they’ll have confirmation.
It is not so much consumption that is a problem but the tourism, airplane, oil & building offices and malls industry that has serious problems.
60%? Nikkei crashed more while Japan was still doing alright. Expect more
And all of these aspects you mentioned serves consumption. The shutdown has impacted both the supply and the demand side. I would suspect that it has disrupted the demand side far worse because of the FUD it has instilled. But the supply side isn’t faring much better, it would have been devastated by the last three months.
Plus the supply side has to contend with the rather unnatural situation forced upon it by the government, where employees were given paychecks, in many cases exceed their original pay. Now, it would not be surprising if there is a part of the population that hopes for another wave, and an additional chance to stay on the sidelines courtesy of government largess.
But the problem is, when that party is finally over, they’ll find that they have no jobs, likely because many of the businesses that employed them have adjusted or are no longer around.
Please to explain the ‘metaphor’ or whatever it’s called quoted from your comment MCH
“But this is a situation where they are going to run out of bricks before the water recedes.”
Can’t remember seeing this before.
the metaphor was one about a dam. Basically, there is rain coming down (in this case in the form of C19, protests, and all of the effects that come up, etc), and the water behind the dam is rising, so the response is build the dam higher and hope that the rain stop and the water level recedes.
If not, a flood, or if you think about it stock market crashing… economic disaster (already happening) something that JP is trying to prevent.
One of my oldest customers imports two wheel ( walk behind) garden tractors from Italy. I design and build implements for the American market that the Italians don’t produce. The sales to this customer have been booming since the start of the pandemic. I guess small scale organic farmers and people growing their own food are busy.
I’ve run a BCS tractor for 5 years now. Excellent product, the best out there!!!!
I’d buy more, even another, but nothing breaks. Ever.
Paulo, you can always get more attachments. I recommend the buddy cart, the pressure washer, the precision depth roller, and the seeder, as those are some of the things I build here in the USA.
Thanks, Seneca. I will look into it.
When a product offers a lifetime warranty on running gear you know it is well built. I mostly use the tiller, and sickle mower. When I bought the machine I had to order it in from a tractor dealership. I see now I can get many accessories from a specialty supplier in Kentucky ? (I would have to look it up) :-) Only ordered from them once.
I need an espresso maker attachment. Don’t forget the milk steamer.
Please allow/encourage SC to let us know how to access his products for this wonderful machine. I never heard of these USA made attachments before.
OTOH, I am not totally convinced it’s ”the” best, though I would agree that it’s ONE of the best, right up there with the older similar machines made in USA before the financial folks took over from the engineers, as is apparently SO wide spread a phenom now a days. Last time I looked, it was also similarly priced to/with the best machines made here, though BCS certainly does, or did have a much wider choice of engines…
Seneca’s Cliff is free to link his company’s website in the login comment-box where it says “website.” This will turn his name blue and make it clickable. He can also name the company in his comment. But he is an anonymous commenter and may not want to establish this connection.
So they are prepping for the post Apocalypse world by purchasing petrol powered machinery that will need both petrol and spare parts to continue to function
Actually WW,,, P and the rest may in fact be purchasing a machine that is able to run on what is usually referred to as ”biodiesel”,, a fuel that allegedly can be produced only from vegetables, though i have not seen clear proven examples of that yet, since what i have seen requires a pig or similar in between the veggies and the fuel…
We can hope, eh,,, and if so, it might actually be somewhat of an advance over clear equine capabilities/efficiencies/adaptability, etc., of the former couple of thousand years or so.
As a committed ”neo-luddite” I am, as you might imagine, more than a little skeptical.
As to the ”spare parts”,,, I am old enough to remember when the guys at the ”gas station” near our house would be able to make at least some of the parts for my parents cars,,, still a fact of life for many drivers in Cuba that I am sure of, likely other places as well.
A very well traveled older cuz told me of the time when a flat occurred to his pick up in a very rural area of Mexico long ago, and a couple kids came out and fixed it without any machines, electricity, etc… but with a ton of clever thinking and adroit hands on labor.
Can you point out the brand of those rototillers made in IT? And what accessories you offer for them. I have a small farm and want to expand the gardens…
Bacteria in a Petri Dish have no idea of the extent of their resource available . We humans do know that extent but our fates are still the same.
Totally Agree! I’ve used the petri dish bacteria to compare it to man many times. Man will destroy everything before it. Nothing will stop man ftom doing this until he is extinct. Man is the most deadly virus of all, you might say. People hate hearing that but unfortunately I can’t be pursued it’s not accurate.
Actually, the virus comparison is quite apt. One could argue that if the Earth is a living organism, things like C19 or Ebola could be considered its natural defense mechanisms against the said virus.
Timbers – You were right the first time. A virus doesn’t reproduce in the biological sense of the word, it copies. Man is much more akin to a bacterium that “reproduces” until it exhausts or poisons all its resources.
If people stop buying stuff, US streetscapes will eventually start to look like Havana, but with taller buildings.
Time for another Cash for Clunkers program!
“Time for another Cash for Clunkers program!”
Isn’t that basically what all the Fed’s programs are…
Received a very large post card like mailing from a local real estate broker saying he sold 2 houses recently on the same street, which is near me, for 25k and 30k over asking. With a promise to pay seller 1k if he doesn’t sell their home in 10 days if they list with him. They did sell for price he claims. I’ll have to start paying attention again. I live in the now apparently coveted “burbs” outside the city but not far, with the now sought after generously spaced homes of suburbia. Haven’t been paying attention lately, so don’t know if this is a trend or not.
This aft mail contained an offer for an immediate 15K loan from some outfit I have never heard of. What a deplorable time to take advantage of people and their desperation. It’s in the woodstove.
I have not seen this much stupidity in the market since the dotcoms…..
Back then I had a coworker that had run the value of his brokerage account up to about 7.5 mill. I begged him to get out and sell. He laughed and said there was no crash coming. After the crash, I asked him how much he had left. He said about 500K…….
When the chickens finally come home to roost, we’re probably going to need another new deal. Plenty of bridges, roads, dams, railways, and parks, etc. in disrepair. Enough to keep people busy for a while. Heck even if we create a small army of testers and contact tracers, that would at least be something since consumers will soon be so scarce. With this collapse of the consumer, maybe myth-busters can finally debunk trickle down economics once and for all.
Define trickle: a small flow of liquid.
“a trickle of blood”
Similar: dribble, drip.
Well there’s your problem; why is it a “trickle” and not a strong flow to start with? What good does a trickle do? It seems like a created problem as opposed to a natural situation.
People went shopping after 9/11as their duty to the All American Economy, then lost most of their stuff in 2009. They got over “stuff”. Then they were told experiences were the thing to spend on. Now we can’t go anywhere.
With all the time on their hands at home people are sorting, tossing and donating stuff. They are happy with less stuff.
Lipstick sales have to be falling through the floor.
After reading all of the interesting comments, I am sorry to say, I have completely forgotten what topic Wolfe wrote about!
Wes..don’t feel bad…happens all the time with this blog when you don’t see Wolf posting in comments and moderating to keep on topic.??
How does a dollar of sales for brick and mortar stores compare to a dollar of sales in e-commerce? I assume that e-commerce margins are generally thinner or less, so the increase of a million dollars of E-commerce growth would really result in less profit that a dollar of spending in brick and mortar stores. Is that a fair evaluation? Does a dollar of sales in one or the other have a larger or broader effect than the other of their respective ecosystems?
Yes, I enjoy Wolf’s stuff, but I also enjoy the comments and insights provided by everyone. As a Canadian living in the wide open fields of the prairies, its good to hear about what everyone else is seeing/hearing/feeling . Please continue to comment and share your thoughts and insights.
Thank you everyone !
Consumerism and destroying the Earth will be naturally limited by significant population reduction: slowly through attrition, or more sudden events. It’s just adaptation.