I know that there is a lot of talk about the recession ending, but all the metrics that involve manufacturing real items in the united states, are down, case in point, the AAR’s report on rail traffic, which is down, 17.1% YoY, which is, as Yves Smith notes, down to 1993 levels.

I’m not saying that the rest of the world is not showing signs of recovery, after all the economic powerhouse New Zealand’s economy has left recession, and the $NZ is hitting records, but for the United States, things are not looking better for the rest of us.

Actually, we are seeing some positive movement in US manufacturing, like GM adding shifts at its plants, though this appears to be one part “cash for clunkers”, and one part having to make up for other plants that have been closed.

We are seeing some action though in Federal Reserve and U.S. Treasury land, where US Treasuries are up, and hence yields are down, largely on the expectation that the Fed won’t do anything to interest rates.

More importantly, we are seeing evidence that the Fed is looking at winding down its money printing. They are not doing it yet, but the Bernanke and crew are in preliminary discussions with bond dealers to implement reverse repurchase agreements in order to get a trillion dollars or so out of the money that they pumped into the economy:

Central bank officials are discussing plans to use so- called reverse repurchase agreements to drain some of the $1 trillion they pumped into the economy, said the people, who declined to be identified because the talks are private. That’s where the Fed sells securities to its 18 primary dealers for a specific period, temporarily decreasing the amount of money available in the banking system.

Well, the intent is clear, though the mechanism is as clear as mud to me.

In the always fun areas of energy and currency, oil rose because the dollar fell to a one year low, $1.4778:€1.000, though this is still about a dime below the peak in early July of last year.