Garbage in, garbage out...

[doom&gloom]

(h/t Financial Armageddon)



http://www.businessinsider.com/chart...economy-2012-7

CHART OF THE DAY: The US Garbage Indicator Is Sending An Ominous Sign For The Economy


Among the 21 categories of items shipped by rail, none have a tighter correlation to GDP than waste.

According to a 2010 piece on Bloomberg, economists Michael McDonough and Carl Riccadonna note that waste
has an 82 percent correlation to US economic growth.

This should be pretty intuitive. The more you produce, the more you throw out.

McDonough, a Bloomberg BRIEF economist, tweeted out an update on the indicator.

And frankly, it stinks. Waste carloads are way down.

[peakishmael]

Re: Garbage in, garbage out...

Does the indicator factor in the effect of (presumably) increased recycling?

In my little burg, the council is just thrilled at the increasing rate of recycling. Waste tipping fees are way down, largely due to recycling and composting being up.

Even if recycling is ignored, -25% yoy looks bad.

[charliebrown]

Re: Garbage in, garbage out...

I would assume ... that recycling would put a negative slope to the trendline of waste cars over time, but not a giant dip like the one we see at the end of the chart.

Other car loads are increasing in this report. I like to look at intermodal. Those are up 5% y-o-y. Could it be that there is a new way to classify waste cars?

[don]

Re: Garbage in, garbage out...

other factors to throw on the pile:

abandoned homes - no pickup

homelessness spiking

can't afford private service - dump the waste elsewhere (backyard?)