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What Do Supertankers and Southeast Asia Have in Common?
By: Chris at www.CapitalistExploits.at
My son just read me an interesting fact. Did you know that a typical oil tanker will take up to 3km and 45 minutes to complete a 180 degree turn at normal sea speed?
He is busy reading me all the facts about the Titanic. He's enthralled with it because there is a lot of death involved. He's at that age where death, mayhem, and grand disaster are AWESOME.
Let's face it, there are two reasons everybody knows about the Titanic...
The first one is precisely because it was an anomaly. Giant, beastly sized ocean going vessels don't typically crack up and head for the ocean floor. They are also notoriously incredibly strong, and they are also difficult to turn with any speed, which coincidentally seems to have been one of the problems with the titanic. It didn't turn fast enough and ploughed into a giant iceberg.
The second reason, in case you're wondering, is because Leonardo DiCaprio and Kate someone made a song and dance about it. I know this since I tried to watch the film once but I was in Prague and the movie was in Czech with no subtitles. Never made much sense to me.
The reason I have supertankers on my mind, other than nostalgia for Prague or my son sitting reading about them, is that both Singapore and Hong Kong, where I've just left, have a decent number of them. You see them dotting the horizon like a silent buffalo herd, when you fly in and out.
When I think of Asia I see the entire region akin to a giant supertanker ploughing full steam ahead.
Individually there are countries running, then walking, then retreating some, but as a whole we've got ourselves a giant supertanker moving in one direction. There is no question that the rise of the Asian economies is rapidly changing the structure of world trade and finance.
I've heard statements on this particular topic such as, "Asia will dominate the 21st century" and others such as, "As long as the US is the world's military power nothing will displace them", to everything in between. I don't particularly care for either opinion. All too often because it comes from a nationalist approach, and nationalism, like patriotism, is a disease I'll never fully understand.
I tend to take a slightly different view. I think the future will be more about ideas than one continent or nation. Industrialization meant that assets were largely fixed and therefore could be seized, secured and/or stolen. The technology revolution has drastically changed this dynamic allowing for businesses to categorize and domicile their various business components in jurisdictions favourable for maximum shareholder value.
If you extrapolate on this you'll realize that much of the value in many businesses is in intellectual property. As such "ideas" will increasingly domicile in favourable jurisdictions. As such, then we need to look at all the factors which may contribute to a favourable climate for "ideas" and monetization of those ideas.
Is it therefore any wonder that so many businesses have been flocking to places such as Hong Kong and Singapore? No, not unless you're particularly dim.
Sitting on the doorstep of a swelling middle class throughout Southeast Asia, businesses domiciled in both Hong Kong and Singapore are provided with many of the ideal tools for profitable business operations. A robust legal environment for developing IP, a deepening talent pool, increasingly open markets too distribute their products, a number of low cost labour options, and a rising middle class that is hungry for more... all within a short flight.
This swelling middle class, from Jakarta to Shanghai and in between, is causing a number of shifts in people and capital within the region. One such shift is of course a rural to urban migration, resulting in land pressures amongst other things.
Present capital flows are important, too. Both Japan and South Korea, for a number of reasons which I don't have time to explore in this article, are on a buying spree in the South East Asian region. Understanding these capital flows, why they exist and whether they are in their infancy or near an end is important.
The Japanese and Koreans, however, are not the only ones investing. Chinese investment into Cambodia, for example, has topped $10 billion over the last 15 years with real estate dominating investment. These are big numbers for such a tiny country.
Then from the China Daily we have the following:
In the first half of 2014, there were 16 deals valued at $1 billion or more in Southeast Asia, compared with only six deals in the same period of 2013, according to Thomson Reuters.
In addition, a third of all M&A activity in Asia Pacific in the last six months took place in Southeast Asia.
In the first half of this year there were 16 deals valued at $1 billion or more in Southeast Asia...
This year, for the first time since 2006, the volume of bankruptcy-related M&As from Asia Pacific exceeded Europe, the Middle East and Africa (EMEA) to become the only region in the world with an increase in total volume to $8.5 billion to date, almost double the $4 billion in 2013, according to financial services information provider Dealogic.
Perhaps more telling, the value of M&A deals that were withdrawn this year has reached $24.7 billion — 36 percent less than in the same period in 2013. At the same time, however, the number of withdrawn deals around the world has hit a high not seen since 2008, according to Dealogic.
What do these players see that others do not?
When you think of ASEAN integration this becomes more obvious. Consider the following statement from China Daily:
According to International Monetary Fund estimates, the AEC bloc will have a nominal GDP of $5.6 trillion, trailing only the United States, the European Union, China and Japan.
ASEAN integration in 2015, something that doesn't even seem to hit the Western media at all, will simply accelerate what has been taking place at an ever increasing pace - growth that is.
According to researchers at the Asian Development Bank:
If Asia, our home continent continues to grow on its trajectory of the past 25 years, it could - by 2050 - account for more than half of global GDP, trade, and investment. Asian individual incomes could rise six-fold; and three billion Asians now mired in poverty and deprivation would become affluent by today's standards. Asia as a whole would regain global economic position it had held some 250 years ago - before the Industrial Revolution of the 18th century.
Don't get me wrong. There are a lot of things in Asia that need fixing... a lot. Traffic can be horrendous, and crossing the street in Manila, Saigon, or Jakarta requires balls of steel, several tranquilizers and luck. Traffic lights are decorative, as nobody takes any notice of them. Clean tap water is still a novel idea and logistics are horribly fragmented, but you know what? This is why so much opportunity exists!
Hectic traffic in Saigon, Vietnam
These are all problems which increasingly get resolved. Expecting farmhands from the boonies to understand traffic signs is neither fair nor reasonable. Expecting DHL-like services, air conditioned subways and decent plumbing used to be unreasonable. Not so much anymore. In fact, step into cities such as Kuala Lumpur, Bangkok, Hong Kong and of course Singapore, and you'll see completely calm, sensible behaviour, together with good infrastructure. It wasn't always that way.
Now I ask you... where would you think the most attractive growth comes from? An established environment or one busily establishing itself?
- Chris
"With a population of more than 600 million people, an emerging middle class that is driving strong consumption, and a robust and resilient economy, Southeast Asia presents a compelling growth opportunity for Starbucks." - Howard Schultz
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These are crony infested places caught btw China & US. Those places that are still US bases are havens of preys for the global elite (the 1%).
Not the intention of the predators to mix their prisons with foreigners and locals. Much more effective to control the local preys through local cronies.
These are crony infested places caught btw China & US. Those places that are still US bases are havens of preys for the global elite (the 1%).
Not the intention of the predators to mix their prisons with foreigners and locals. Much more effective to control the local preys through local cronies.
It is still better in the US for a wage earner (low 6 figures). Kuala Lumpur and Singapore are brutally expensive. Don't even think about the hovel you would call home in Hong Kong. Bangkok? Prepare to start your commute at 4am and get home at 10pm. The "swelling middle class" lives in a 2 bedroom row house with no yard, poor infrastructure, drives a $60,000USD Camry (due to taxes), in an overcrowded neighorhood with choking smog.
I lived in Kuala Lumpur and Singapore and the quality of life is absolutely awful unless you are making 300-400k USD per year. Minimum.
The traffic will shorten your lifespan and unless you are a heavy drinking whoremonger it is truly dismal.
The US has turned into a tragic frail shadow of it's former self but you can still eke out a lovely lifestyle in the right place. Keep a low profile and don't annoy the King and his men and the US is still the best game going. That could rapidly change, but if the S hits the fan it will be a bigger, wetter, and sloppier pant load in Asia, I guarantee it.
These articles about South America, Asia, etc... . seem to be written by guys that "I went there on business twice last year and it was real neat, plus the in flight magazine said it was fabulous!".
Tru dat.
Just came back from 10 days in Singapore. Lovely exterior......very clean. Nice people. But.....VERY crowded, smoggy, HOT as ballz, (I can imagine the A/C bill for just one typical flat.....much less a typical high rise hotel.), malls PACKED with folks chowing down on K.F.C., Burger King, Carl's Jr., Micky D's, etc.....everywhere LOUD.......ALL their energy imported.
Yeah.....when industrialization winds down.......back to the jungle with them.
funny i thought i was reading a thomas friedman article. what the world is decoupling and is flat????
the more narratives change the more they stay the same.
WAR BITCH. BOMBS NUKES AND MILITARY .
nationalism is no more a disease than 'moneyism'. and that is what this article is about 'moneyism' and 'growthism'. i wouldn't say its about globalism because globalism is a complete fabrication implict in the this articles basic thesis; the east is growing fast, the west is not.
ironically enough the underbelly of globalist growthism is really just imperialism , an extension of nationalism by countries that are winning the game of globalism.
when these narratives break down. you get realy war. the cycle continues.
They're due to be dominated and pwned by CHN?
demographics, merchantile expansion disruption, corruption, suspect infrastructure, drought/famine, political purges, polution, wars for commodities/resources, ethnic hatred/phobias, relgious persecution, shadow banking debt, ---all may have something to say about the rosey forcast for Asia--- just saying
Chris, -- I read your amusing article. To be relevant, you must first put a bushel of corn in my manger.
I don't know about tankers but I do know that central bankers cannot make a 180 degree turn without overturning the boat. Then again, sailing straight ahead will only result in a direct hit with an iceberg. In other words we are stuffed either way.
The Britannic was a beater that was sunk as the Titanic to collect the insurance. All the right palms were greased and a few political problems solved in the process. Didn't watch the movie, pretty sure this wasn't mentioned. Why don't you explain this to your son? Otherwise he's going to grow up pathetically deluded about the ways of the world. Probably wind up wearing a dress at his wedding.
You are correct. It was the Olympia that was sunk and to make matters worse the ship that was supposed to save them did not appear.
What is disgusting is that the high flyers who were supposed to be on the ship cancelled at the last moment and saved their hides.
The question these days is whether the high flyers will be able to escape the wrath of the people.
They're both the size of Algore.
What a load of crap!!! "Intellectual Property" is ONLY good if the general population has food, clothes, housing, energy, and medicine. This is yet another extension of the stupid idea that the US 'doesn't have to MAKE things....we can just be the smart guys'. "Physical" goods and physical location will continue to matter far longer than any of us are still alive.
Ok.
Salaries in Singapore are not low. A consultant in the biotech industry and make upwards of $65 SGD/HR, a crane operator ~$5000 month. A new VW in SG costs $130,000, do you think citizens earning peanuts can afford a basic car that costs that much? Trust me the streets are PACKED....
It is really all about taxation. Companies pay little to no tax on their profits. SG is like most any other state in the USA and obesity is starting to catch up with them. The next 10 yrs will be intersting. Most of the kids are spoiled rotten and there is even a joke the SG military will have to make accomodations in the future for the maids(domestic helpers) to carry the rifle and back pack for the 18+ yr olds that must serve their 2 year mandatory militray training.
As for vietnam, yeah it is amazing. SO much entrapaneur ship everywhere. Yes, crossing the streets is considerd a leap of faith. But you know what, I prefer that as to compared the pedestrian privelage society you see in the USA. Traffic flow is organic, nothing like in the USA where traffic lights create congestion. In these places traffic takes the path of least resistance and flows continuesly. Look it up on youtube. Traffic in Saigon Ho Chi Min city. Horns beep continuesly, not in agner but acknowledgment. You dont see your socer mom stuffing her face with a hambuger while trying to stuff fries down her kids mouth in the back seat.
"A robust legal environment for developing IP,"
Thanks for the humor. Great comedy.
I found that amusing, too. I think he meant to say "stealing" IP.
IP theft is an old and honoured American profession. It made Thomas Edison and his ilk very wealthy.
Soooo, the demonstrations in HongKong are because people are so happy??!!??
If you ask me, then my answer is: because of CIA.
"BMCs : Ok, how about extremely low salaries in India, China and SE Asia. We lose a huge market there.
Banksters : Can you imagine if one day all these people demand Western salaries? That's why we dictate the fairytale of budget cuts and fiscal discipline to countries. So that to reduce salaries in West and say to Asians: look, don't ask for too much, look what happens in West. You will get your raise up to a certain limit.
You see? Once we equalize salaries everywhere, you will get your new market there. New consumers who could spend as much as Americans and Europeans. Plus you will get rid of regulations and fire employees at will without consequences. Governments and politicians by then would become totally powerless."
http://failedevolution.blogspot.gr/2013/12/an-imaginary-dialogue-between...
The pay in China looks low to Americans, but it is not being spent in America. For example, an auto worker at GM Snanghai or Toyota or BYD makes about $4.50-$5.00 US an hour. However, in China that is a good job with health insurance, pension, job security, and good working conditions. That hourly pays buys the worker a solid middle class life, by American standards. The employee owns a home with no mortgage, has significant savings, and all the consumer goods. He also has a paid vacation and the money to travel.
He doesn't need a Western salary...he already has the means to pay for a Western lifestyle.
I am a retired American living in China. My $1300 SS check buys two people an upper middle class lifestyle with money left over to travel 3 times a year.
Don't get your hopes up about a worker revolution. The overwhelming majority of Chinese citizens see that their lives have improved greatly in 10 years and have confidence in their leaders.
@Roddy, how long have you been there and how long can you stay? Is there no limit?
China has a population of over 1,3 billion. The majority still works with extremely low wages and under unacceptable conditions. Inequality drives the system everywhere, see: http://www.china.org.cn/business/2014-07/26/content_33065409.htm
US big corporations return back to the USA not due to the rise of the salaries in China and elsewhere but because the don't need human labor anymore. See:
http://failedevolution.blogspot.gr/2014/05/already-happens-capitalism-de...
The rise of of the salaries in the developing countries will be done up to a certain limit just to create new consumer tanks against the saturated West. But this will be just another intermediate stage until all the big corporations eliminate competitors, fully automate production and totally take control of all resources. Consumption then will be of less importance because the system will change from capitalism to global feudalism:
http://failedevolution.blogspot.gr/2014/08/the-dominant-elite-ready-to-b...
Anyway to hedge gutter oil? China will be so messed up with all their pollution I can see a few wars being started over it.
Asia as a whole will regain the position it held 250 years ago; says the author. And what position was that? Hopelessly backward; impoverished, ripe for easy plucking by the Europeans. Stagnant and over-populated; with a rigid, non-innovative culture and mind set and strong central government that was medieval in outlook. ridiculous article.
You never read any Marco Polo about China under Kubka Khan.
this guy is a nut. He doesn't understand anything. Another person flogging their newsletter.
After reading this article, I am more interested why he was in Prague watching Titanic in Czech with no subtitles?
I guess I am part of the problem....
But I guess everyone and their brother knows that SE Asia has/is/will go gangbusters.
One point that his article does not explore is the role of financial management for its own sake. When industries that produce stuff get taken over by finance and value finance more than stuff, they tend to decline. SE Asia has not done that yet.
A fully laden VLCC,Very Large Crude Carrier (200,000+ tons deadweight) would definitely take a few miles to stop at full speed(14-15 knots) but I sincerely doubt it would take 45 minutes to reverse course 180 degrees!
I suspect the figure is 4.5 minutes instead of 45 minutes.
A tanker (and almost any other displacement vessel) would be cruising at 7 or 8 knots ,, not full speed as the fuel burn gets crazy above that speed ,,, his numbers seem reasonable ,, 45 minutes would be about 6 km in distance and the tanker would be effectively dissipating all the kinetic energy it had accumulated.
Speaking of Singapore and China.......
China starts direct convertability with Singapore's dollar.
http://www.globalresearch.ca/the-dollar-decline-continues-china-starts-d...
Greasing the wheels of Asia's rise.
And continuing the diminution of the U.S. dollar.
I wouldn't expect him to be able to do arithmetic. It's an absurd thesis; this BS about the up-coming South East Asia. They're utterly dependent on Western spending; which is tapped out. End of story. The over-population alone guarantees at least another generation of abject poverty.
800 must have been your cvombined score.