Playing on Obama's Railway

(bettertrades) - The new President certainly does have lofty aspirations. From solving the financial crisis to health care reform, no goal appears unattainable. Next up: a transportation revolution.

"Imagine whisking through towns at speeds over 100 miles an hour, walking only a few steps to public transportation, and ending up just blocks from your destination," President Obama intoned on April 16th.

Updates for existing rail systems will likely see the bulk of rail investments. Amtrak is already earmarked for $1.3 billion in U.S. funding

Regions vying for fiscal stimulus aid include the Sacramento to San Jose route, a rail line from Los Angeles to Las Vegas (Where there is none currently), and Chicago's outdated system.

The following is an exert from the Department of Transportation's Federal Railroad Administration:

President Obama proposes to help address the nation's transportation challenges by launching a new and efficient high-speed passenger rail network in 100-600 mile corridors that connect communities across America. The Strategic Plan outlines the President's vision that would transform the nation's transportation system by rebuilding existing rail infrastructure while developing a comprehensive high-speed intercity passenger rail network through a long-term commitment at both the federal and state levels. This plan draws from the successful highway and aviation development models with a 21st century solution that focuses on clean, energy-efficient rail transportation.

$13 billion has been appropriated for the initial phase of setting up the infrastructure for high speed rails along the lines of what exists in Europe and Japan. And even though the initial investment isn't near enough to support a grid outside of major metropolitan areas, $13 billion is nothing to scoff at for the companies that will get a piece of the pie.

Class One rails like Burlington Northern Santa Fe (BNI), Kansas City Southern Railway (KSU), Canadian National Railway (CNI), Canadian Pacific Railway (CP), Norfolk Southern (NSC), and Union Pacific Corp (UNP) could see reinvestment dollars.

U.S. Steel (X), AK Steel Holding (AKS), Nucor (NUE), and Steel Dynamics (STLD) are a few producers who might firm up on the fiscal spending dollars needed to buy the mild steel used for laying tracks.

There is cause to be cautious on the high speed rail infrastructure play as previous administrations have failed to deliver on similar promises. But with a down payment making its way down the tracks, Americans and traders alike have reason to be optimistic that this time will be different.