US economy on the right track
The CEO of a railroad giant projects sufficient growth, and it's all private sector driven.
If you ask me, we could do worse than 2% to 2.5% growth. That's the level of activity that Union Pacific (UNP) CEO Jack Koraleski thinks we can do in this country, and I believe that will result in a steady turn over time. Nothing rapid, but no slippage either. That pretty much jibes with the solid durable-goods numbers we just got Friday.
Why do I believe Koraleski has a bead on things? Because he's just about the biggest shipper of building materials, coal, oil, grain, chemicals and autos -- and that's pretty much everything that gives you a feel for what a nation can grow.
I was incredibly encouraged after speaking with Koraleski, because he is at the heart of the changing face of American industry due to the energy boom. Given the tight environmental noose on many pipeline developments, Union Pacific has stepped up by building new track everywhere and linking the wellhead to the refineries. That's a ton of jobs. I know from Frank Semple -- CEO of Markwest (MWE), a master limited partnership company -- that plenty of pipeline is still being laid, 18 projects worth multibillions just by Markwest alone. But the railcar imperative grows by the find -- and the runs from Texas (Eagle Ford) to Los Angeles, and from the Bakken to Louisiana, are really Union Pacific-dominated.
There's also a feverish building of chemical plants in the Southeast to take advantage of all of the natural gas and natural gas liquids being found, turning the materials into plastic and those oily materials. All are going Union Pacific's way.
Just the sheer volume of oil shipped is pretty amazing. Union Pacific moved more oil this quarter than it did all of 2011, and it is just beginning to ramp. If the Keystone pipeline doesn't get built, by the way, that oil will come via Union Pacific. If it does get built, this company will ship the pipe.
Autos isn't really an American story, unfortunately. The North American Free Trade Agreement (NAFTA) has given Mexico such an edge that I expect far fewer jobs to be generated from autos than what would otherwise have occurred at this stage of the cycle. However, Union Pacific is the shipper that controls Mexico -- through partnerships with Kansas City Southern (KSU) -- and that business is growing very quickly.
The housing business is percolating just fine, and lumber shipments keep increasing.
Only agriculture and coal are weak, and both might be hitting some sort of cyclical trough. It is true that plantings are not showing a robust ag year, and the downturn in ethanol is a headwind.
But coal inventories have been worked down big, and they are now in short supply. In fact, I think coal will turn up big if the weather gets warm and air conditioning starts running hard amid a bottom in natural gas. At these prices, those utilities that can shift are shifting. Don't forget that Union Pacific ships cleaner coal, the kind that newer coal plants can handle without running afoul of the Environmental Protection Agency.
All in all, if you sit down with Union Pacific, you get very encouraged that the U.S. is moving again. You know that things are on the right track, so to speak. You know that the energy boom is the single most important spur to growth this country has had in years and years, and that it remains an intense focus for growth.
Just so we're clear, though, this is all private sector. Nothing is being helped by Washington. Yet there's no doubt that if the government had supported this industry the way it supported solar, millions of jobs could be created in a relatively short period of time, perhaps as few as five years.
Doesn't matter. It's fossil fuel. Not going to happen.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and had no positions in the stocks mentioned.
More from TheStreet.com
2.5% growth on $16 trillion in GDP comes out to $400 billion per year in growth, or about 33 billion in growth per month. Bernanke is pumping in $85 billion per month to get $33 billion in growth - uh oh...
Cramer the economy is going down hill faster and faster all the time.
Just what is happening on main street that would tell you otherwise???
Did we create 10,000,000 jobs over night with $140,000 a year salaries???
Average wages are increasing merely because we include the top 10 percent wage earners.
Take all the data and scrub out the top 10 percent wage earners and you have a true picture of the US economy. Cars sales down 30 percent wages down 10 percent this year alone. Half of all families on food stamps. Housing sales down 50 percent. People forced out of their homes only to wind up in rental houses for more than their mortgages were. How long is that going to last Cramer???
Pretty much you can not have an economic recovery when the elite 10 percent of the country are stealing the rest of the country's wages and benefits.
Sure everything is great for the top 10 percenters and that is why FEMA is preparing riot camps to house those of the lower class once they are starving and rioting on the streets as our economy falls apart.
Certainly homes prices not back to anything near similar bubbles...
But over exuberance by Buyers, Realtor hype...And Banking fanagling....At it again.
Yeah, right, until the dollar value base catches up with the paper being printed and inflation sets in prices go through the roof. Cramer as well as the other progressives blow smoke every time they talk. This economy is about 6 months from tanking. This whole economy is being propped up by promises and free paper.
who is kidding who
I would look for 125-150 upside DOW today, maybe even more or intraday bumps?
World looks somewhat settling..
And problems are not as bad as some would have you think?
Quit or don't worry about scumbags and manipulators...
Make some profit while you can.
Rumor has it that an UFO landed in Harlem and took Barry S. away for his extreme
wisdom and class.
I'll still stick with my 125 upside, I'm not scared....At least over a hundred.
Scumbags falling over themselves..
And they will be back tomorrow trying to suck more profits...
More after the close in about an hour..
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The fall in this sector has been so precipitous and lurking that we are just one more big miss and one more ugly deal away from taking down a good portion of the S&P 500.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.