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LuckyOne

While I Am Not An Absolute Buffet Devotee ....

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Trains are the new green transportation mode. For the transport of heavy goods, they emit about 25% of the pollutants of trucks per ton mile.

Despite their green credentials in a world that is thinking more about emissions every day, freight train traffice is falling. Clearly this is not a sign that the "real economy" in the United States is on the road to recovery.

http://www.bloomberg.com/apps/news?pid=206...id=aPAQLQ0ebMQI

July 10 (Bloomberg) -- For Warren Buffett, freight-train traffic has the kind of importance that Alan Greenspan attached to scrap-steel prices as Federal Reserve chairman -- and it isn’t going his way.

The CHART OF THE DAY compares the number of freight carloads at six of the largest U.S. railroads this year with the same period of 2008. Shipments tumbled 19.2 percent through last week from a year earlier, the Association of American Railroads reported yesterday.

Buffett follows this gauge more closely than any other index, Bianna Golodryga, a reporter for ABC’s “Good Morning America†program, said yesterday after she interviewed the billionaire investor. Its drop worries him, she reported.

Buffett’s Berkshire Hathaway Inc. owns a 23 percent stake in Burlington Northern Santa Fe Inc., the biggest U.S. railroad by revenue. The holding’s value was $5.25 billion at yesterday’s close. Among Berkshire’s common-share investments, only Coca- Cola Co. and Wells Fargo & Co. were bigger.

Berkshire also has stakes in Norfolk Southern Corp. and Union Pacific Corp., two other U.S. railroads. The value of those shares totaled about $545 million yesterday.

Greenspan followed the scrap-steel market to gain insight into the U.S. economy’s prospects. The rate at which cars and trucks are scrapped “has a pronounced cyclical pattern,†he wrote in a study that the Fed released in 1996.

Edited by LuckyOne

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IMO Trains will be a major part of our economic recovery and eco future a reliable and cheap way to travel for all and everything... the railways have been long neglected and investment is well overdue and needs to be addressed ASAP. ;)

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IMO Trains will be a major part of our economic recovery and eco future a reliable and cheap way to travel for all and everything... the railways have been long neglected and investment is well overdue and needs to be addressed ASAP. ;)

It's happening. See for example http://www.roadtransport.com/Articles/2009...it-service.html - importing oranges from southern Spain by train, taking lots of big lorries off Europe's roads.

I have to say, I raise an eyebrow at that one: no mention of the sea crossing part of the journey. Oranges are among the many imported fruits that were shipped in before the days of the railway, and could be again.

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Rail and Wells Fargo. I respect the man but these two holdings have turned out to look pretty dumb in the short-term. I think he was a bit slow to "get" the downturn, personally. He must be happy about the crutch he lent to GS that subsequently turned to gold.

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