Last week, I received news from a contact who is friends with one of the biggest billionaire shipping families in the world. He told me they had no ships at sea right now, because operating them meant running at a loss.
This weekend, reports are circulating saying much the same thing: The North Atlantic has little or no cargo ships traveling in its waters. Instead, they are anchored. Unmoving. Empty.
You can see one such report here. According to it,
Commerce between Europe and North America has literally come to a halt. For the first time in known history, not one cargo ship is in-transit in the North Atlantic between Europe and North America. All of them (hundreds) are either anchored offshore or in-port. NOTHING is moving.
This has never happened before. It is a horrific economic sign; proof that commerce is literally stopped.
We checked VesselFinder.com and it appears to show no ships in transit anywhere in the world. We aren’t experts on shipping, however, so if you have a better site or source to track this apparent phenomenon, please let us know.
We also checked MarineTraffic.com, and it seemed to show the same thing. Not a ship in transit…
If true, this would be catastrophic for world trade. Even if it’s not true, shipping is still nearly dead in the water according to other indices. The Baltic Dry Index, an assessment of the price of moving major raw materials by sea, was already at record all-time lows a month ago... and in the last month it has dropped even more, especially in the last week. Today BDIY hit 415...
Factories aren’t buying and retailers aren’t stocking. The ratio of inventory to sales in the US is an indicator of this. The last time that ratio was this high was during the “great recession” in 2008.
Hey, Ms. Yellen, what recovery? The economy is taking on water at a rapid rate.
The storm has been building for some time, actually. Not so long ago, there was a spate of reports that the world’s automobile manufacturers were in trouble because cars were not selling and shipments were backing up around the world.
ZeroHedge reported on it this way:
In the past several years, one of the topics covered in detail on these pages has been the surge in such gimmicks designed to disguise lack of demand and end customer sales, used extensively by US automotive manufacturers, better known as “channel stuffing”, of which General Motors is particularly guilty and whose inventory at dealer lots just hit a new record high.
Here is a photo of unsold cars in the United Kingdom from that article.
The world’s economy seems in serious trouble. You can’t print your way to prosperity. All you are doing is hollowing out your economy. Draining it. And sooner or later it’s empty and you have to start over after a good deal of crisis and chaos.
It’s no coincidence that China is struggling desperately to contain a stock implosion. Reportedly, banks have been told they are forbidden to buy US dollars and numerous Chinese billionaires have gone missing. And the markets have just opened on Monday and are again deeply in the red.
Here at The Dollar Vigilante we’ve specialized in explaining the reality of the global faux-economy and why it’s important that you not believe mainstream media lies.
In the meantime, keep your eye on this shipping story! If it is true and worldwide shipping is disastrously foundering, it’ll only be a matter of days before grocery store shelves will reflect that with increasingly bare shelves.
Are people upset now? Just wait. Interruptions in goods and services, most critically food, almost happened in 2008 during the Great Financial Crisis. For three days worldwide shipping was stranded due to shipping companies not knowing whether or not the receiver’s bank credit was good.
That crisis was staved off due to a massive amount of money printing. It was a temporary stay of execution, like bailing out the Titanic with coffee cups, however, and one that may reach much larger proportions in 2016.
Sailors watch the weather to see if it is safe to set sail. Investors should be watching the economic climate with the same intensity.
We are already sailing through very stormy waters.
40 Years of shipping all our jobs overseas and the only jobs left pay slave wages. Wow, who would have seen this coming. A real shocker indeed!
You! Number 32. Get back to your assigned duties NOW.
But....but....but, I thought those jobs overseas are performed by slaves being paid slave wages?! Haven't you noticed that we're now shipping the SLAVES here, granting work permits to hundreds of thousands more foreign workers so that employers HERE can be competitive? Our prez is opening the borders to uneducated workers by the hundreds of thousands to take the jobs that require no skill or education. It is a GLOBAL reduction in wages without a commensurate decline in prices, at least not at the same rate. It will be a global dirth of goods and services where the masses of foreigners will go to war against Americans. Are you ready for that?
the Gail Tverberg "finite world" effect, the sucking sound of growth dying under debt stranglehold.
IMO, the downside of existing paradigm described by the Cassandra of our current conundrum is Gail Tverberg's view and her deflation analysis.
On the Upside the future will be made by the impact of Elon Musk/ Uber type paradigm shift to the Collaborative commons. To downgrade need for hypercapital investment in consumerables hardware and concomitant shift to products with marginal near zero costs, like renewable energy, to kickstart the new model. We will need less capital for bigger consumer satisfaction via Internet of things (3d print etc.).
First we have to deflate the debt and malinvestment and move to regulated block chain type money where we are at 100% collateral in banks and concomitantly create the collaborative commons as presented by Rifkin in "the Internet of things" revolution.
Upsides and downsides, that reconfiger the international trade away from predatory and insatiable paradigm oriented capitalism (bankster debt and no equity via fractional reserve and compounded interest) which has corrupted the elected elites.
How do we avoid Militarist takeovers of civil society?
We need to ban all weapons of attack world over.
Is it possible? I don't know that!
A painful process for the young born and the unborn...
"On the Upside the future will be made by the impact of Elon Musk/ Uber type paradigm shift to the Collaborative commons. "
Elon Musk /Uber are examples of fascist/zirp rentier schemes.
Neither would exist without TBTF leverage or .GOV subsidizations or exemptions from existing taxation and regulation of various sorts.
I'm not talking about the people, I'm talking about the technological push and the business model.
Its like the push to downsizing in silicon valley and to Internet. But yes Internet did lead to dot.com as human nature is leveraged by capitalism into bubbles.
But that beat goes on to push to new frontiers and turn wind into low running cost energy; not into DC hot air worth a huge kickback for an Oligarch and a huge kick up the ass for the 99% !
I do see signs of Elon Musk's ideas catching on fire....
"the future will be made by the impact of Elon Musk/ Uber type paradigm shift to the Collaborative commons"
You must be talking all those driverless taxis running on electric, yes? All that valuable work washing the Uber, driveless, Tesla. Cleaning out the ash tray and inflating the tyre because the onboard computer says the front, off-side is 2psi down.
Fantastic, collabrative commons.
For what it's worth, my good friend at the port of Marseille had this to say:
Dec. '15 YoY Containership traffic at Marseille is up 7%. They are stealing a bit of traffic from the Northern ports, but the northern ports are not doing all that shitty either. So either its a VERY sudden stall, or something else.
BDI is an index of COST of bulk freight shipments, not volume.
The Fed's models see no signs of contagion or spill-over from what happened around the world.
Leave it to the Baltic Dry Index to really show how "All Wet" the Fed is.
Take a look at investment grade credit spreads. Blowing-out beautifully!!
bond 'investors' who purchased corporate bonds yielding 3 to 5% are now taking on big losses, and much more are to come. This is rightful justice, because the bonds sold to these investors brought in cash that the corporate insiders used to buy back their stock, propping-up their stock price just long enough for these corporate insiders to sell their shares and their options. Just desserts.
What a bunch of bullshit. BDI is an index of COST, not VOLUME.
The Baltic Dry Index is ONLY BULK RAW MATERIALS like iron ore, cement, and coal.
The supply of ships is very inelastic so small decrease in volume results in tremendous decrease in rates. The reverse is also true. A low BDI doesn't mean shipping has stopped, far from it.
A similar disconnect between cost and volume is oil. Since the price of oil has dropped so much, does that mean that the supply and demand of oil has dried up to nothing? Becasue that's what the article is suggesting.
why do you think corp/gov/media is so eager to cram rapeugees and other immigrants into the West? So they FORCE FEED us growth....immigration is their growth savior....and we are gonna get mass immigration, like it or not...the economic ponzi scheme must continue
I know of a few companies importing manufactured goods from China, who quit using container ships and were using air freight instead...rather eerie seeing all of those ships onshore or close to shore, and nothing moving on the high seas...
Actually, nuclear radiation is moving on the high seas because Japan sucks at everything under the sun.
You might have a point. Evergreen Marine Corporation, fourth biggest shipping company, has an affiliate called EVA Air which has both passenger and cargo services.
how bout using the map. click to shiping list. lots of ships. zh is becoming a shit show
One of the maps also shows absolutely no ships anywhere in the China Sea. Gee, anyone think that's right? Considering that Shanghai, Singapore and Hong Kong are the busiest ports in the world.....
I'm sure its all taken up by rail traffic. Nothing to see here.
So, why will shelves be empty? If they're empty, it's because people are buying stuff. If they're buying, there's demand. If there's demand, they should be shipping stuff and making money at it.
It's a different kind of "demand" known as panic.
This doesn't bode well at all.
All tracked ships, even those that seem to be in open water, are near land if you zoom in to look closely. I suspect that ships in open water aren't tracked or their tracking data isn't shown.
so, maybe...anti-piracy measures?
Yes and we can see a few ships near some islands with routes from/to Europe and North America. For example : http://www.marinetraffic.com/en/ais/details/ships/shipid:383711/mmsi:316...
You need satellite tracking for deep sea vessel tracking : http://www.marinetraffic.com/en/p/satellite-ais
The guy who wrote this said it he is not an expert in marine traffic. Ok, but read a bit about your sources before making such crazy statements. And also crazy some readers believe anything posted on ZH. We have our own sheeps...
Penguin 1 to Mission Control. Global warming problem solved by new Cap and Trade. Cap shipping, stop Trade. Fuck Walmart.
That was really very clever.
Lots of ZH'ers looking like morons in this one. Seriously, ZERO GLOBAL NAVAL TRAFFIC? Right. LOL.
About as likely as zero global automobile traffic. haha.
At least the great arabic migration keeps the ground traffic busy in Europe.
What are you using to track this, the Muslim Dry Index?
or the Goat Depletion Index
Europe will soon be bullish on goat futures
Recovery? Nothing but blue skies?? Unicorns???
You forgot 'green shoots'.
OK, We know the article was mistaken. Next?
Container ships are certainly moving. The BDI I believe is about bulk carriers.
i got news for your shipping billionaire.
He told me they had no ships at sea right now, because operating them meant running at a loss.
unless he paid cash, not operating them is an even bigger loss. think fracking
As of late the North Atlantic has been whipped by one major storm after another. Last week 50 foot seas in the waters of Britain. I would say some ship traffic on the Atlantic route is being held in port. It costs real money to use fuel at sea to fight headway into 70 knot winds and 50 foot seas. Since record storms have gone on for months, I suspect that some Atlantic traffic is weather related. As for the rest of the world, that just does not seem right. Even in a depression, major shipping routes would hold traffic at all times.
No ship at sea! Oh boy we're talking Titanic Economy in here.
Something is really really going down !
This must be a historic event for certain ... no wonder the Baltic Dry index is tanking to historic levels.
Chill out, everything is coming via trucks.
The day the earth stood there lookin'.
Do you remember the economic system that produced stuff people did not want or need or afford? Here we have the US and the world.
If you interested here is a brief comparative analysis:
https://contrarianopinion.wordpress.com/2015/01/06/pools-and-propaganda-...
All business reporting are just strait lies. 300k new jobs? actually only 11k, record car sales? Actually a record of nventory stuffing and record ninja auto loans obtained by proud hobos, “owners” only until next missed payment. Record housing prices now falling in even billionaire reserve zoos, volume sales collapse, nobody qualifies for 3% mortgage 75% sales all cash, rest HUD for courtiers of the system.
The US Empire of economic delusions, that’s all. The truth is that world trade collapsed due to collapse of global demand driven by collapse of the global net income (income minus recurrent debt obligations) exactly as global oligarchy want it, total pauperization of population.
More on about true economy for 99% of us can be found here:
https://contrarianopinion.wordpress.com/economy-update/
under: FALLACY OF VIRTUOUS GLOBAL TRADE and other posts.
Nothing like good fear porn to grab you, throw you down to the ground, command your attention for a few minutes.
Of course, it goes without saying you have to read the comments for a good counter-dose of sanity.
Meanwhile:
Bank of America: Rail Traffic Is Saying Something Worrying About the U.S. Economy
http://www.bloomberg.com/news/articles/2016-01-11/bank-of-america-rail-traffic-is-saying-something-worrying-about-the-u-s-economy
A few years back on ZH there was an article that pointed out that once global commerce is interrupted for any reason it is the devil to restart. I don't know how much of a downturn it takes to count as an "interruption" but I'd be interested to see that article again, and Google doesn't seem to want to cough it up no matter what keywords are used (gee, should I trust Google?!--they don't seem to have a line on that story from a few years back from a member of The Clash who said the moment the band got signed they were all taken in a room and told their politics was now socialism).
Has anybody got a link to it?
I don't have a link but the phenomenon you are talking about is also evident with what is happening with young people. No decent jobs, therefore hard to start a family, hard to buy a house and hard to save. Net result is that the demographic slump triggers massive economic and financial imbalances that cannot be reversed overnight or by money printing.
It reminds me of the joke about about the fellow who was telling his friend about how he once screwed an ostrich. His friend asked how it went. The other fellow replied..."it went really well until we fell out of step."
http://www.zerohedge.com/news/trade-study-global-systemic-collapse
A shipping broker from Athens who handles deals for the shipment of iron ore from Western Australia to China recently told me that he did a deal for $2.90 per tonne.
Massive oversupply of ships and new ships coming onto the market will rip the hulls of the shipping industry wide apart. The slow down in trade will simply be the nail in the coffin.
It's not just the BDI:
It's not the jobs report or the latest housing data but railway cargo that has analysts at Bank of America concerned.
Railroad cargo in the U.S. dropped the most in six years in 2015, and things aren't looking good for the new year.
"We believe rail data may be signaling a warning for the broader economy," the recent note from Bank of America says. "Carloads have declined more than 5 percent in each of the past 11 weeks on a year-over-year basis. While one-off volume declines occur occasionally, they are generally followed by a recovery shortly thereafter. The current period of substantial and sustained weakness, including last week’s -10.1 percent decline, has not occurred since 2009."
BofA analysts led by Ken Hoexter look at the past 30 years to see what this type of steep decline usually means for the U.S. economy. What they found wasn't particularly encouraging: All such drops in rail carloads preceded, or were accompanied by, an economic slowdown (Note: They excluded 1996 due to an extremely harsh winter).
More from Bloomberg.com: U.S. Stocks Fluctuate on China Woes as Treasuries, Yen Decline
"Similar periods of weakness have occurred in only five other instances since 1985: (1) the majority of 1988, (2) the first half of 1991, (3) several weeks in early 1996, (4) late 2000 and early 2001, and (5) late 2008 and the majority of 2009 … all either overlapped with a recession, or preceded a recession by a few quarters."
Of course, many would argue that a shift away from coal-powered energy, a slowdown in the industrial sector, and the petering out of the U.S. shale boom would naturally lead to fewer goods being moved by rail. Hoexter and his team, however, suggest that the slowdown is spreading to more consumer-oriented segments. Intermodal carloads typically related to consumer goods were up 1 percent in the first quarter of 2015 and 3.6 percent in the second quarter but fell 1.7 percent in the final quarter of last year.
More from Bloomberg.com: Asia Stocks Fall to Lowest Since 2011, Extending Global Selloff
Thus the team is taking a cautious tone, at least through the first half of the year when the analysts cite tough comparitives. "While many of the rails have successfully trimmed expenses commensurate with volume declines, we are concerned about the extent to which cost-cutting can support [earnings-per-share] growth targets," they write.
Here's why you're only seeing ships near land in that map (zoom in and you'll see that all of those shown are near land) - ships at sea would need to use a satellite connection and that data is apparently not shown on free maps:
https://en.wikipedia.org/wiki/Automatic_Identification_System
"The Automatic Identification System (AIS) is an automatic tracking system used on ships and by vessel traffic services (VTS) for identifying and locating vessels by electronically exchanging data with other nearby ships, AIS base stations, and satellites. When satellites are used to detect AIS signatures then the term Satellite-AIS (S-AIS) is used."
"AIS is intended, primarily, to allow ships to view marine traffic in their area and to be seen by that traffic."
"Shore-based AIS receivers contributing to the internet are mostly run by a large number of volunteers."
"Global AIS transceiver data collected from both satellite and internet-connected shore-based stations are aggregated and made available on the internet through a number of service providers. Most of this data is free of charge but satellite data and special services such as searching the archives are usually supplied at a cost."