July 9, 2010 – My Personal Leading Economic Indicator

Featured Trades: (AUTO SALES), (NISSAN), (NSANY), (HONDA), (HMC)


2) My Personal Leading Economic Indicator.  I just flew over one of my favorite leading economic indicators. Honda (HMC) and Nissan (NSANY) import millions of cars each year through their Benicia, California facilities, where they are loaded on to hundreds of rail cars for shipment to points inland as far as Chicago. A year ago, when the US car market had shrunk to an annual 8.5 million units a year, I flew over the site and it was choked with thousands of cars parked bumper to bumper, rusting in the blazing sun, bereft of buyers. Then 'cash for clunkers' hit. The lots were emptied in a matter of weeks, with mile long trains lumbering inland, only stooping to add extra engines to get over the Sierras at Donner Pass. The stock market took off like a rocket, with the auto companies leading. I flew over the site last weekend, and guess what? The lots are full again. During the first quarter, demand for new cars raced up to an 11.5 million car rate, then fell off a cliff in June. I'll let you draw your own conclusions. Sorry the photo is a little crooked, but it's tough holding a camera in one hand and a plane's stick with the other while flying through the turbulence of the Carquinez Straight.