Same Mountain, same slide, same advice

My May 3rd post is still very accurate... The markets are lurching and twisting. Many articles have come out showing an increase in freight volume and even rates. Don't get sucked in, it's temporary and its moderate. The fundamentals of the US ecomomy are still very grim. Obamanomics is perpetuating fear and uncertainty. This breeds conservative business reactions (no expansion, no hiring). Forget about Canada the US public mindset is still in the throws of recession no matter what the media propogates. A lot of the really "BAD" news still isn't hitting the main stream media, such as over a million backlogged home forclosures just to name one. Cap'n trade will be a spike in the coffin of the trucking industry. If it passes (low chance actually... at least according to current estimations) there will be HUGE polorization as some companies try and accomodate the political effects while others hedge against application. It'll create two approaches: old equipment-low overhead-low investment-dynamic business plans verses new equipment-higher overhead-higher investment-static business plans. The former approach will hedge their models on cap'n trade being recinded (if passed) while the latter embraces the "new" political paradym.

Canadian Lease/Owner operators should have one model... the first. The outcome is still far too complex to determine. In times of high volatility and risk minimise your exposure... in other words, get out of debt, stay out of debt... reduce your risk!

RECOVERY????

These economic times are not like history. Though indicators are up (for trucking) it is too early to express investment optimism. The US debt levels are at historic levels and do not indicate ANY reversal. Greek bonds were just rated as JUNK and the Euro plunged (US rose). These knee jerk reactions are just temporary. The entire global monetary system is in jepardy since governments around the world have been borrowing for decades. They are all monetarising their debt (printing money). Eventually this "fix" will fail as currencies from all around the world will collapse (simultaneously... within months of each other). Sounds drastic... it is. There are only a few situations that will reverse this slide down slippery slope. The US must stop borrowing, and reduce their governemnt spending by dramatic percentages (25-60%). I personally think this will not be possible or probable. THis means that some time in the next ten years or so global currency will be devalued. The eventual outcome has too many variables to call but serious non the less.

Any "recovery" will be lurching and grinding, false starts, turnarounds and setbacks. Lanes will shift, money will be made and lost over night...

This means that the only thing that is truely "safe" will be assets free of debt/leins. Look at what happened to Europe when they changed their currency, convertions killed equity and buying power of citizens. Very turbulent times. Even if I am wrong in my predictions, the advice is still good.... get out of debt, stay out of debt, equipment valuations should be primarily on fuel economy! NEVER upgrade equipment for tax purposes or because of company demands! FUEL ECONOM, FULE ECONOMY!, FUEL ECONOMY!