Sharp gains since the election. I think Wall Street is projecting a LOT more traffic for the railroads in the next few years do to infrastructure programs and the proposals to allow export of low-sulphur coal from the PRB.
This is good news, but must be a short term projection. Are we not bringing all those jobs back here to the US. No need to send coal to China whe we are making it right here in the US.
NS and CSX in particular have rallied since yesterday. Maybe because Trump has promised to end the "war on coal". If the tariffs go up, though, were likely to see a drop in shipments from Asia and a corresponding drop in container loads from the ports. Localized manufacturing will benefit the truckers more than it will the railways who do better with those juicy long hauls from the ports... i.e. lots of loads from Peoria to Indy and fewer loads from Long Beach to Chicago.
We all have heard the Campaign brags that Trump announced.
What will actually get enacted going through Congress?
Talk is cheap. Congress can't be fired.
Never too old to have a happy childhood!
I guess we'll see. So far Trump's win hasn't hurt the markets, but tomorrow is another day.
Northern Securities, anybody?
Victrola1 Northern Securities, anybody?
JJ Hill was 100 years ahead of his time.
The hauling of aggregates was sure to increase (Sand, Cement, Rock) with either candidates infrastructure program so I am not sure this is just a Trump thing, I think it would have happened with Hillary as well.
CMStPnPSharp gains since the election.
Not if you're KCS.
RME CMStPnP Sharp gains since the election. Not if you're KCS.
CMStPnP Sharp gains since the election.
The faint hearts always overreact to the day's news. Good investment opportunity for the rest of us. KCS has a great, strategically located franchise independent of Mexico, and will be fine for as long as the railroad industry itself is basically sound.
dakotafred RME CMStPnP Sharp gains since the election. Not if you're KCS. The faint hearts always overreact to the day's news. Good investment opportunity for the rest of us. KCS has a great, strategically located franchise independent of Mexico, and will be fine for as long as the railroad industry itself is basically sound.
I think so too. Trade with Mexico is likely to grow, even under Trump.
The Congress will work with the incoming Pres. Trump on any conservative agenda items, but will not be any more receptive to infrastructure spending than they were with Pres. Obama. They consider government infrastructure spending a democrat program, and they largely consider Trump an outsider.
MidlandMike The Congress will work with the incoming Pres. Trump on any conservative agenda items, but will not be any more receptive to infrastructure spending than they were with Pres. Obama. They consider government infrastructure spending a democrat program, and they largely consider Trump an outsider.
They passed everything Obama asked for in regards to infrastructure spending in the first Tranche. Problem was the first Tranche 85%-90% was increases to social programs and only 10-15% was Infrastructure spending. His second stimulus attempt was met with skepticism because his first had almost no lasting stimulus effect on the Economy........as soon as the money ran out.... so did most of the positive effects. That impact turned the Congress and Public off to further stimulus programs because the perception was after the first flop that we were wasting money. Had he reversed his approach he would have done a lot better, in my view.
If it was me having had the second tranche rejected in large part. I personally would have moved on to deregulation in areas that would stimulate the economy but President Obama made no such move. Absent of any money to spend, his thinking was that his hands were tied so he just sat pat and watched the economy struggle.
Your going to see an effective stimulus program in the next two years and the philosophy used will be to apply stimulus in all areas at once. Government spending, Government deregulation, Private Business spending and investment, as well as individual spending. Sit back and watch how much more effective it is than just focusing on government spending alone.
I fear that RR stocks are up because the stock markety is breathing too many coal fumes. Yeah, undoing some of the coal regs may cause a bit more coal to move, but certainly not enough for the euphoria of last week.
The low cost of natural gas is the prime killer of coal. I wouldn't expect that to change much in the next several years.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
oltmannd I fear that RR stocks are up because the stock markety is breathing too many coal fumes. Yeah, undoing some of the coal regs may cause a bit more coal to move, but certainly not enough for the euphoria of last week. The low cost of natural gas is the prime killer of coal. I wouldn't expect that to change much in the next several years.
Is it the low cost of natural gas or the high cost of coal that is killing coal? Regulations generally increase the cost of production. Easing regualtions lowers the cost of production.
Euclid oltmannd I fear that RR stocks are up because the stock markety is breathing too many coal fumes. Yeah, undoing some of the coal regs may cause a bit more coal to move, but certainly not enough for the euphoria of last week. The low cost of natural gas is the prime killer of coal. I wouldn't expect that to change much in the next several years. Is it the low cost of natural gas or the high cost of coal that is killing coal? Regulations generally increase the cost of production. Easing regualtions lowers the cost of production.
As long as natural gas is cost competitive, utility executives would prefer to use it as opposed to coal.
The natural gas pipelines run into the plant. To use the gas all that is required basically is to turn it on.
Coal requires extensive handling. In most instances it has to be unloaded from trucks, rail cars or conveyer belts. Its storage has to be managed, and it has to be ground into powder before it can be injected into the burners.
Waste is an issue. There is practically no after burn waste from natural gas. Not so with coal. Burning coal produces a lot of ash. In Arkansas, Louisiana, and Texas, where many of the plants burn lignite coal, sometimes referred to as brown coal, the after-burn ash can be a significant percentage of the coal burned. Higher grades of coal produce less ash.
Irrespective of the amount of ash created, however, it has to be gotten rid of. Frequently a utility can sell the ash, but its ability to do so is dependent on a volatile market. Historically the utilities have not always been able to recover the cost of handling and disposing of the ash.
In addition to the handling issues, baring a break through in clean coal technology, coal fired plants have significant air pollution hurdles to overcome. Even to meet today’s EPA requirements means installing scrubbers, etc. that add millions of dollars to the cost of a coal plant.
Oltmannd is correct. The long term demand curve for coal is a continual downward sloping to the right, with some dips from time to time, but the nation's power generators are going to abandon coal as a boiler fuel.
Rio Grande Valley, CFI,CFII
I expect regulatory easing that will soon reverse the downward trajectory of coal. I don't think the markets are wrong about this.
At this point, let the market, rather than government, decide. Past regulation has already cleaned coal to the point that it is almost unrecognizable. Remember it used to be burned in almost every home, with no controls, for heating. As a longtime Bismarck legislator asked once: "Did anybody die?"
Euclid Is it the low cost of natural gas or the high cost of coal that is killing coal? Regulations generally increase the cost of production. Easing regualtions lowers the cost of production.
Oil & gas production is also highly regulated. It's a wash, as to whether they or coal is more highly regulated. All other things being equal, the utilities just prefer natural gas.
Edit: one utility exec said that they would like to keep some coal in the mix (IIRC 30%) so they did not have to rely too much on any particular fuel. Some other utilities want to get totally out of coal.
CMStPnP MidlandMike The Congress will work with the incoming Pres. Trump on any conservative agenda items, but will not be any more receptive to infrastructure spending than they were with Pres. Obama. They consider government infrastructure spending a democrat program, and they largely consider Trump an outsider. They passed everything Obama asked for in regards to infrastructure spending in the first Tranche. Problem was the first Tranche 85%-90% was increases to social programs and only 10-15% was Infrastructure spending. His second stimulus attempt was met with skepticism because his first had almost no lasting stimulus effect on the Economy........as soon as the money ran out.... so did most of the positive effects. That impact turned the Congress and Public off to further stimulus programs because the perception was after the first flop that we were wasting money. Had he reversed his approach he would have done a lot better, in my view. If it was me having had the second tranche rejected in large part. I personally would have moved on to deregulation in areas that would stimulate the economy but President Obama made no such move. Absent of any money to spend, his thinking was that his hands were tied so he just sat pat and watched the economy struggle. Your going to see an effective stimulus program in the next two years and the philosophy used will be to apply stimulus in all areas at once. Government spending, Government deregulation, Private Business spending and investment, as well as individual spending. Sit back and watch how much more effective it is than just focusing on government spending alone.
Did the skepticism of the second stimulus package have something to do with the Republicans retaking the House in the 2010 mid-term election? In any case, they have not been fans of infrastructure spending for some time now. You mention private business spending now, which seems to be the way the Trump transition team is going. In today's paper I see his new transportation person is big on public-private partnerships, but mainly on toll roads where investors see a surer return.
https://www.greatagain.gov/policy/transportation-infrastructure.html
MidlandMike Euclid Is it the low cost of natural gas or the high cost of coal that is killing coal? Regulations generally increase the cost of production. Easing regualtions lowers the cost of production. Oil & gas production is also highly regulated. It's a wash, as to whether they or coal is more highly regulated. All other things being equal, the utilities just prefer natural gas. Edit: one utility exec said that they would like to keep some coal in the mix (IIRC 30%) so they did not have to rely too much on any particular fuel. Some other utilities want to get totally out of coal.
Every electric utility planning group wants a balanced fuel portfolio. It does not want to be overly dependent on one fuel in case it suddenly becomes price prohibitive. This is why the major utilities in the U.S. have coal plants, natural gas plants, and nuclear plants, as well as hydro plants where they are feasible, and an increasing reliance on wind and solar generation facilities.
In 2015 Texas generated nearly 10 per cent of its power with wind. Although it is hard to think of it as a fuel, wind is a fuel substitute. And more wind and solar is in the works.
The EIA estimates that wind power in the U.S. will grow at a rate of 2.4 per cent a year through 2040, which means that as much as 50 to 60 per cent of the power in the U.S. could come from wind. This strikes me as a bit optimistic, but wind and solar will replace a signficant portion of the coal fired generation.
Coal will be around for many more years. But it will, I believe, eventually be replaced by renewables, natural gas, and perhaps a resurgent nuclear energy industry. And that will give us the fuel mix that utility planners want for optimization.
MidlandMikeDid the skepticism of the second stimulus package have something to do with the Republicans retaking the House in the 2010 mid-term election? In any case, they have not been fans of infrastructure spending for some time now. You mention private business spending now, which seems to be the way the Trump transition team is going. In today's paper I see his new transportation person is big on public-private partnerships, but mainly on toll roads where investors see a surer return.
Not sure what states you have lived in but the states I have lived in the Infrastruture programs are bi-partisian. At the Federal Level I have not seen it be partisan either.
I see them attempting to mix private and public funds on some projects and guaranteeing a return. What structure exists after that is anyones guess, does the toll road revert to a freeway or is a buyout of bonds required, not sure. On Trumps web page it says $500 Billion Infrstructure spending program but on the campaign trail he said $1 Trillion. So I am not sure if the $500 Billion is the taxpayer portion or the whole program.
CMStPnP MidlandMike Did the skepticism of the second stimulus package have something to do with the Republicans retaking the House in the 2010 mid-term election? In any case, they have not been fans of infrastructure spending for some time now. You mention private business spending now, which seems to be the way the Trump transition team is going. In today's paper I see his new transportation person is big on public-private partnerships, but mainly on toll roads where investors see a surer return. Not sure what states you have lived in but the states I have lived in the Infrastruture programs are bi-partisian. At the Federal Level I have not seen it be partisan either. I see them attempting to mix private and public funds on some projects and guaranteeing a return. What structure exists after that is anyones guess, does the toll road revert to a freeway or is a buyout of bonds required, not sure. On Trumps web page it says $500 Billion Infrstructure spending program but on the campaign trail he said $1 Trillion. So I am not sure if the $500 Billion is the taxpayer portion or the whole program.
MidlandMike Did the skepticism of the second stimulus package have something to do with the Republicans retaking the House in the 2010 mid-term election? In any case, they have not been fans of infrastructure spending for some time now. You mention private business spending now, which seems to be the way the Trump transition team is going. In today's paper I see his new transportation person is big on public-private partnerships, but mainly on toll roads where investors see a surer return.
That's not the way it is in Michigan. I am guessing you have some interest in Wisconsin. As I recall Gov. Walker (R) ran on a platform to kill the passenger rail service expansion to Madison, which was already approved by the previous gov (D). Republican govs in Ohio, Iowa, and Illinois did similar things.
Infrastructure was part of Clinton's and the DNC's platform. While it was also included of Trump's platform, there is where he parted ways with the RNC.
MidlandMikeThat's not the way it is in Michigan. I am guessing you have some interest in Wisconsin. As I recall Gov. Walker (R) ran on a platform to kill the passenger rail service expansion to Madison, which was already approved by the previous gov (D). Republican govs in Ohio, Iowa, and Illinois did similar things. Infrastructure was part of Clinton's and the DNC's platform. While it was also included of Trump's platform, there is where he parted ways with the RNC.
Ah yes the frequently misrepresented Midwestern Governors position on the HSR package that Ray LaHood was attempting to sell. It was not the HSR package itself they were opposed to, it was the strict terms that bound each state to a very high Capital Spending program or else they would be forced to pay back the original grant to the Feds and be stuck with the incomplete mess as a result if they could not finish the project.
California had nothing to lose in that it already committed to a high expense HSR package so thats why a large chunk of the money was dropped there.
Wisconsin and Ohio made the correct choice on the proposal. Illinois is suffering greatly for signing onto the proposal and I might add..........still not seeing HSR in that state yet as it was envisioned.
It is interesting though, how many multiple billions of taxpayer money has been spent so far on HSR and still no new systems are up and running?
Amen to the above, especially in Ohio, where I have some first-hand knowledge of where rail passenger was going pre-Amtrak. Revival of Cleveland-Cincinnati service on schedules slower than NYC's of 50 years ago would have been DOA in Ohio, and was recognized as such.
Iowa's governor was also too smart. Illinois can't get even Chicago-Quad Cities started; an extension to Iowa City would have been the money pit it was, again, pre-Amtrak.
The notion that our infrastructure is in need of complete repair is propaganda put out by the Infrastructure Spending Machine. You put money in one end and nothing comes out the other end.
Everybody can relate to the problem of traffic jams, poorly maintained farm/ranch-to-market roads, airport and airline delays and crowded subways; so the idea that we can fix the problem sells.
In my opinion, we need to revive the economy by punishing it less and reducing public spending. The “Need to fix our crumbling infrastructure” has become the battle cry of big government spending. It is exactly the wrong thing to do now. Unfortunately, it resonates with Trump because he is a builder of big ideas, and fixing the infrastructure is the biggest building idea of all.
The way to maintain the infrastructure is to carefully pour a little money into the Infrastructure Spending Machine and get a little improvement. Prudence is the key. Putting out a package of $550-billion to suddenly fix all of the infrastructure problems once and for will merely feed the beast. The money will get consumed before anything gets fixed. There will be cost overrun in just deciding what gets fixed. All it will accomplish is stimulating the Infrastructure Spending Machine to demand another $550-billion.
While I have no fear the elements of the Infrastructure Spending Machine exist. I also know that the Interstate Highway system was begun in 1956, with a signifigent percentage of its mileage constructed between 1956 & 1966. In the interests of 'economy' the Interstate was constructed to a '50 year' standard level of construction. Well boys and girls 1966 was 50 years ago and the 'repairs' that have been applied over the years have, for the most part, been stop gap efforts to keep the roads 'going' , rarely going to the base levels of the constructions - sub grades deteriorate - bridges deteriorate, both with their steel and their concrete. Nothing lasts 'forever' especially when it was constructed to a 50 year standard.
BaltACDWell boys and girls 1966 was 50 years ago...
This is especially manifested in bridges. A stretch of road with a stable base can last a long time with occasional resurfacing. Bridges, not so much. Here in the north country, steel bridges and salt haven't been the best of friends...
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
EuclidThe notion that our infrastructure is in need of complete repair is propaganda put out by the Infrastructure Spending Machine.
Its also supported by the American Society of Civil Engineers. While they may have a certain vested interest, they also have the technical expertise to evaluate the conditions of bridges, levees, canals, water and sewer systems, etc. I believe the last rating I heard them give was a D-. While not saying a "complete" repair, they certainly had a concern about a lot of the infrastructure. Probably its not the interstate system that is in the most jeopardy, its probably the state, county or municipal systems that are in the worst shape.
Dave H. Painted side goes up. My website : wnbranch.com
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