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Shipping Rates Go... Negative

Tyler Durden's picture





 

Following the endless collapse in the Baltic Dry, it was only a matter of time before the shipping industry one-upped the Chairsatan, and was the first to introduce, dum dum dum, negative rates. That's right: you are now paid to hire a ship. Via Bloomberg:

  • GLENCORE HIRES SHIP AT MINUS $2,000 A DAY, GMI SAYS
  • GMI TO CONTRIBUTE $2,000 A DAY TO GLENCORE'S FUEL COSTS
  • GLOBAL MARITIME'S U.K. MD STEVE RODLEY CONFIRMS DEAL BY PHONE

Why is this happening? Perhaps because ships have to be kept seaworthy and in motion or else they become scrappage in as little time as 3 months. Think sharks. Needless to say, this will play havoc with shipping company (and affiliated entities') liquidity, as the biggest default wave in the history of the industry is about to be unleashed and tens if not hundreds of billions of European secured loans are about to be "impaired."

 


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Mon, 02/06/2012 - 10:48 | Link to Comment PapSmear
PapSmear's picture

Upside down world we live in.

Mon, 02/06/2012 - 10:54 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

They lose money on every trip, but they make it up on volume.

Mon, 02/06/2012 - 10:56 | Link to Comment Arthor Bearing
Arthor Bearing's picture

They are burning dollar bills below deck to make steam to power the ship

Mon, 02/06/2012 - 10:59 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

You mean above deck of course.

Mon, 02/06/2012 - 11:02 | Link to Comment Pladizow
Pladizow's picture

Must get missing $ palets home?

Mon, 02/06/2012 - 11:08 | Link to Comment Vampyroteuthis ...
Vampyroteuthis infernalis's picture

This is just a preview for rest of the private sector. Debt-default bitchez!!

Mon, 02/06/2012 - 11:24 | Link to Comment imaginalis
imaginalis's picture

Ships will be bought on the cheap just before being called back into action transporting vast amounts of war supplies for the next big one. Lets keep an eye on buyers.

Mon, 02/06/2012 - 11:30 | Link to Comment Max Hunter
Max Hunter's picture

I just got an email.. It was spam.. With shipping rates.. One of the rates was as low as $50 from West Coast U.S. to China.  Other routs (U.S. to Europe) and (China to U.S. or Europe) were about half the price as a few years ago.. These are 20' and 40' containers..

Mon, 02/06/2012 - 11:32 | Link to Comment trav7777
trav7777's picture

time to start renting those containers out for people to live in.  It'll be like Alaska where the residents get a rebate from the operation as the ship drives around aimlessly.

Mon, 02/06/2012 - 11:54 | Link to Comment tarsubil
tarsubil's picture

Let's start up our own cruise line!

Take a long peaceful cruise with Metal Box Cruise Lines! We pay you!

Mon, 02/06/2012 - 12:45 | Link to Comment Matt
Matt's picture

Let us partake of the fruits of grevious malinvestment.

Mon, 02/06/2012 - 18:17 | Link to Comment Betty Swallsack
Betty Swallsack's picture

BDI now down to 647.  -62.77% YTD.

http://www.bloomberg.com/quote/BDIY:IND

Mon, 02/06/2012 - 22:20 | Link to Comment FrankDrakman
FrankDrakman's picture

time to start renting those containers out for people to live in

You laugh, but just last week there was an architectural show in Canada demonstrating dozens of designs for converting 20 and 40 foot containers into living spaces. a 40' container g ives 320 sqft of living space. A 530 sqft bachelor in downtown Vancouver  goes for just under $400k CAD these days. Two 40's cost approx $10k used, which leaves $390k to buy/rent a lot, and trick the containers out.

Mon, 02/06/2012 - 12:15 | Link to Comment El Tuco
El Tuco's picture

From China to the US it is usually around 50 a cubic meter. If it has to go on rail to the east coast (fromt he wwest coast) you are looking at about $80 a cubic meter. These have been the rates for the last couple of years (+ or - 5%).

What is really fucking sad is that it takes less time to get a container from China to California than it does from California to NY. Go figure.

All the bond warehouses I have been in are full. Shit piled to the ceiling waiting for customs clearance. So I haven't noticed a slowdown. Maybe it's worse in Europe?

You got to remember that the Chinese (whole fucking country) just took off about 3 weeks so absolutly nothing was shipping. Those fuckers get more vacation than US workers. Pretty soon they will be getting as much as the Greeks.

 

Anyway, Peak Oil will even it all out eventually. Just a waiting game.

 

Mon, 02/06/2012 - 11:30 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Spot on! Why bought? They will be declared, er, temporarily possessed by the state in the interest of Oligarch Death grip perpetuation.

But man oh man..... what is coming is going to be awful. Truly a blood bath. BDI was the canary in th ecoal-mine in 2008. Patient died in September. 

Now, can't even keep the facade alive..... this is really the signal for the end of the stox market being weeks away.... money market, inter-bank, short-term, long-term.... all freeze like Europe is right now. it all looks related. Biggest snowstorm EVER recorded in Rome/Vatican yesterday. 

As I used to say back in the day....trip outtttttt maaaan.....

ori

/san-onofre-33rd-parallel-4th-7th-feb-window-out-on-a-limb/

Mon, 02/06/2012 - 11:41 | Link to Comment The Limerick King
The Limerick King's picture

 

 

I think I will hire a ship

And take an around-the-world trip

With negative rates

Which quickly inflates

I'll be rich once I'm back at the slip

 

Mon, 02/06/2012 - 12:11 | Link to Comment Max Fischer
Max Fischer's picture

 

 

Keep in mind, just because the rates went negative, the customer still must pay for fuel.  So if a bunch of ships need to relocate to a busier region, it's cheaper for a shipping company to lose money on the rates, but charge for fuel, than to just run the vessel empty to another location.  It's actually pretty damn smart - imagine a taxi driver that needs to get from Kentucky to Las Vegas (because it happens to be busier in LV) and finds a customer willing to pay for fuel expenses, but not for the ride itself.  Win, Win.     

Shipping rates are actually about to reverse, because three dozen over-aged vessels are going to be sold to the scrap yards this year. 

By the way, negative rates on dry bulk have been charged since mid January, while cargo(container ships) rates have more than doubled in the past year.   

Max Fischer, Civis Mundi 

 

Mon, 02/06/2012 - 12:57 | Link to Comment juggalo1
juggalo1's picture

I've been wondering about that.  My container rates are not heading in this direction at all.  Is it possible to convert a dry bulk to a container?  Cheaper to just buy new?

Mon, 02/06/2012 - 17:48 | Link to Comment bozzor
bozzor's picture

Conversion would be technically very difficult due to design and layout.

Mon, 02/06/2012 - 13:54 | Link to Comment narnia
narnia's picture

the plausible consequence of the currency war is a total decrease in trade, not a shift of trade.

then again, they could be reconfiguring routes to support NATO logistics, which are probably 3x as lucrative.

Mon, 02/06/2012 - 13:30 | Link to Comment Zero Debt
Zero Debt's picture

There once was a tanker from Maine

That was filled with high pressure propane

One day skipper Drew

Lit a cig and it blew

And the captain said "do it again"

Mon, 02/06/2012 - 12:04 | Link to Comment valley chick
valley chick's picture

ORI, your post caught my eye.  As I am in the learning curve I am trying to understand the BDI a little more. Can you explain further about the BDI ? 

Mon, 02/06/2012 - 12:38 | Link to Comment Oh regional Indian
Oh regional Indian's picture

vc, best take it from the experts, ne?

 

<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<,

Baltic Dry isn't a Latvian deodorant or an Estonian cocktail. Rather, it's a number issued daily by the London-based Baltic Exchange, which traces its roots to the Virginia and Baltick coffeehouse in London's financial district in 1744.

Every working day, the Baltic canvasses brokers around the world and asks how much it would cost to book various cargoes of raw materials on various routes—150,000 tons of iron ore going from Australia to China or 150,000 tons of coal from South Africa to Taiwan. Brokers are also asked to consider variables such as the type and speed of the ship and the length of the voyage.

The answers are melded into the BDI, which appears in shipping publications such as Lloyd's Listand on the screens of information vendors such as Reuters and Bloomberg. Because it provides "an assessment of the price of moving the major raw materials by sea," as the Baltic puts it, it provides both a rare window into the highly opaque and diffuse shipping market and an accurate barometer of the volume of global trade."

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

 

Basically it is the one incorruptible indicator of global trade health. If lots of thing need moving around, BDI goes up, if no one is buying and nothing is moving, BDI goes down. It si a vast and largely independent market (some collusion of course, but not on a day to day basis perhaps).

 

Just Google BDI in April through Spetember in 2008. it fell  massive amount, much greater in percentage terms back then because it was coming off a Boom driven high, but it told the tale of what was coming in September, topping out in June/July if I remember correctly.

 

Because ultimately, even vapour money has to move based on some "trade" occuring somewhere, howsoever re-re-re-hypothecated it might be and so ultimately, BDI crash = Crash, all around.

 

Not good.

ori

Mon, 02/06/2012 - 13:37 | Link to Comment valley chick
valley chick's picture

Thanks ORI :)  This would include China products sitting in the dollar stores etc.?  As there appears to be manipulation of job numbers ...cue "Happy Days are here again.....there isn't supporting figures in the BDI.  And once again there is bank exposure ...once again the canary in the coal mine...

Mon, 02/06/2012 - 13:56 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Sure ValleyC. I was a valleyB myself in the boom days. 

And yes, where the rubber meets the road is Leters of Credit for shipments to leave port.

When they dry up due to market risk.... double whammy.... really went downhill in mid-08, this is a repeat, only much more severe.

ori

Mon, 02/06/2012 - 15:46 | Link to Comment valley chick
valley chick's picture

ORI aka valleyB :)  ...  valley chick for valley chickens...lol...my eyes were opened Nov 2010, and had paid someone to do all the investing...that was until 3-11...got out all together and follow this site daily and trying to learn the financial part...bad timing for that since now what is bad is good and good is bad...buy the news and sell the rumors. Yup...use to be a sheeple...kind of miss that world.... ;-)

Tue, 02/07/2012 - 01:21 | Link to Comment Oh regional Indian
Oh regional Indian's picture

I know eh ValleyC? It was a warm and comfortable world. Vacant stares, vacant minds but boy it was FUN! Skiing in Tahoe, Tennis in South Carolina.....hmmmmm

I don't miss them though! :-)

ori

Mon, 02/06/2012 - 14:31 | Link to Comment azzhatter
azzhatter's picture

Not neccessarily true in the short term. Sometimes a lot of capacity comes online and there is enough of a volume increase to match so you get rate reductions. As older ships cycle out and market grows rates recover. It's a volatile measure because of the long cycle to build ships. Most coming online this year were ordered in 2008 when they thought the party would last forever. Now they have only 2-5% demand increases and 22% increases in capacity. not a volume collapse. 

Mon, 02/06/2012 - 11:21 | Link to Comment Colombian Gringo
Colombian Gringo's picture

Naw, just buying Iranian oil cheap, arbing differences between Brent Iranian sweet  and selling CDO's.

 

Make sense?

Mon, 02/06/2012 - 11:19 | Link to Comment xela2200
xela2200's picture

No, they loose money on every trip, but it is LESS than if they sit around. I worked on a ship once. Many of the sailors have contracts for 9 months on (every day) and 3 off. There are a lot of fixed fees on the industry. Ships need to be working 24/7 to make a profit. They are also in constant state of decay and need endless maintenance.

Mon, 02/06/2012 - 11:20 | Link to Comment EscapeKey
EscapeKey's picture

*whoosh*

Mon, 02/06/2012 - 11:39 | Link to Comment xela2200
xela2200's picture

Working on ship = scrapping and painting.

Mon, 02/06/2012 - 13:13 | Link to Comment zelator
zelator's picture

merchant marines spend more time chipping than doing anything else

Mon, 02/06/2012 - 11:32 | Link to Comment tarsubil
tarsubil's picture

Welcome to City 17.

Mon, 02/06/2012 - 10:54 | Link to Comment Manthong
Manthong's picture

Shipowners are "underwater".

Geez, will it be the floating boats that finally sink Euro banks?

Mon, 02/06/2012 - 10:55 | Link to Comment Arthor Bearing
Arthor Bearing's picture

This is bullshi- I mean bullish

Mon, 02/06/2012 - 11:06 | Link to Comment junkyardjack
junkyardjack's picture

Bullish for more people eating iPads

Mon, 02/06/2012 - 13:34 | Link to Comment Zero Debt
Zero Debt's picture

Free shitt- I mean shipping

Mon, 02/06/2012 - 11:03 | Link to Comment battle axe
battle axe's picture

Gilligan!! What have you done now little buddy???

Mon, 02/06/2012 - 11:18 | Link to Comment mikla
mikla's picture

Gilligan

Mon, 02/06/2012 - 11:19 | Link to Comment Ignatius
Ignatius's picture

Or perhaps the "just in time delivery" world.

Mon, 02/06/2012 - 13:30 | Link to Comment Jumbotron
Jumbotron's picture

Upside down world we live in.

Here's visual proof of that......

http://www.youtube.com/watch?v=9La6AXq8yXY&feature=related

 

Mon, 02/06/2012 - 13:36 | Link to Comment ilion
ilion's picture

Quote from Armada Markets facebook entry: "Question, over the last 5 years if you take all asset classes in the world, then in agregate, how much has their value fallen in trillions? Global central banks have printed probably close to 3-4 trillion dollars. We believe that's less than the agregate fall in value of all assets. Therefore, even by printing these couple of trillions they have not been able to cover all the buying power that has been lost over the last years. 

Also, high inflation can never emerge if the underlying global economies have enormous overcapacity - for example, take a look at capacity utilization rates in G7 countries. Therefore, further appreciation of commodities prices should be limited."

I guess when the s.it hits the fan, and there's going to a war with Iran, then most likely we will see all those papergold holders sell their stuff (paper gold-silver will thus collapse) to repatriate and the value of physical will go through the roof. The end is near, but after the end, there will be a new beginning. :)

Mon, 02/06/2012 - 10:48 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Hahaha! 

Let's pay someone to fix all of those broken windows we just broke.

Mon, 02/06/2012 - 10:51 | Link to Comment achmachat
achmachat's picture

i was going to post the very same thing!

how long do they think they can sustain this travesty?

Mon, 02/06/2012 - 10:53 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

If we close our eyes and pretend it isn't happening, forever!

Mon, 02/06/2012 - 11:31 | Link to Comment francis_sawyer
francis_sawyer's picture

"I think we're gonna need a smaller boat"

Mon, 02/06/2012 - 12:21 | Link to Comment Acet
Acet's picture

It's the new and improved submarine rates.

Mon, 02/06/2012 - 18:46 | Link to Comment Dugald
Dugald's picture

The trouble with my boat is when I'm standing underneath with a paint roller its bloody huge, when it goes back in the oggin it shrinks.....

Mon, 02/06/2012 - 10:57 | Link to Comment Uncle Remus
Uncle Remus's picture

Let's make the taxpayers pay someone to fix all of those broken windows we just broke.

There ya go - fixed it.

Mon, 02/06/2012 - 11:11 | Link to Comment EscapeKey
EscapeKey's picture

We need to print the money first.

Mon, 02/06/2012 - 11:36 | Link to Comment JPM Hater001
JPM Hater001's picture

We're gonna need a lot more windows broke...

Mon, 02/06/2012 - 10:48 | Link to Comment Robslob
Robslob's picture

Are negative rates deflationary, hyperinflationary or imaginary...it is getting so difficult to make sense of anything having to do with "money" in todays world and global marketplace!

 

 

Mon, 02/06/2012 - 11:27 | Link to Comment silver500
silver500's picture

Just spoke to Steve Rodley (MD of the company), Glencore is paying for the fuel and the shipment moves the ship to the Atlantic where there is stronger demand.

 

Basically the shipping rate excludes fuel.

Mon, 02/06/2012 - 10:49 | Link to Comment CrankItTo11
CrankItTo11's picture

Alright, I'll comment first. Can someone please explain this to an average, ignorant noob? (me)

Mon, 02/06/2012 - 10:54 | Link to Comment KondaU
KondaU's picture

It's like you had to pay your boss to be allowed to come and work for him and make him money and survival be damned. Ever heard of that donkey that learned how live on zero hay but the poor beast died cause he was laying on the ground sleeping and  truck driver mistook him for a rug?

Mon, 02/06/2012 - 10:55 | Link to Comment Jayda1850
Jayda1850's picture

Basically demand is so far in the shithouse that ships have very little business to haul. Because ships need to be moving pretty much nonstop to avoid corrosion and such, that they're are now paying you to haul product for you.

Mon, 02/06/2012 - 11:25 | Link to Comment espirit
espirit's picture

Breaking the biggest (read most expensive) union in the world.

Merchant Mariners.

Mon, 02/06/2012 - 11:01 | Link to Comment Imminent Crucible
Imminent Crucible's picture

Next time you rent a beach house, notice what the salt air does to the hinges on the shutters.

Salt water is the real reason most people don't own a yacht. You might swing the purchase price, but it's the maintenance that's the real cost.

Mon, 02/06/2012 - 11:06 | Link to Comment TuesdayBen
TuesdayBen's picture

saltwater, and the fact that they haven't two nickles to rub together

Mon, 02/06/2012 - 11:15 | Link to Comment MachoMan
MachoMan's picture

That doesn't stop people from buying things...  it's the availability of credit that's the deciding factor.  ;)

Mon, 02/06/2012 - 12:11 | Link to Comment Libertarian777
Libertarian777's picture

keep your nickles they're actually worth 5c

Mon, 02/06/2012 - 11:50 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

 

 

It means ships are charging customers less to transport a shipment than it costs, so they're losing money on the shipment.

But it's better than no customers and no money coming in.  It's better to lose $1,000 a day than lose $10,000 a day.

It's like having a seasonal business, installing windows in homes for example, and doing window jobs at a loss during the slow season to keep your employees working.  Many seasonal construction businesses do this.

But shipping isn't seasonal, which means this is a longer term problem, and ship owners may not have financial reserves to weather it, hence the risk of bankruptcy and default on billions of dollars of loans from banks.

 

Mon, 02/06/2012 - 10:49 | Link to Comment KondaU
KondaU's picture

Sharks!!! Now you did it Tyler :D:D:D:D:D:D:D:D:D:D:D:D:D:D:D

Mon, 02/06/2012 - 13:36 | Link to Comment Zero Debt
Zero Debt's picture

frickin laser beam sharks

Mon, 02/06/2012 - 10:49 | Link to Comment PaperBear
PaperBear's picture

The economy has gone full retard.

Mon, 02/06/2012 - 10:59 | Link to Comment fuu
fuu's picture

Umm where have you been?

Mon, 02/06/2012 - 11:02 | Link to Comment PaperBear
PaperBear's picture

Yep, the economy has been in retard mode for some time now.

Mon, 02/06/2012 - 11:14 | Link to Comment resurger
resurger's picture

"It's the Economy Stupid"

 

Mon, 02/06/2012 - 11:27 | Link to Comment rustymason
rustymason's picture

"It's the Stupid Economy."

Mon, 02/06/2012 - 11:40 | Link to Comment JPM Hater001
JPM Hater001's picture

Every since I heard ZH say it about the EFSF I thought it was a fun descriptor too...Full Retard..yup...spot on.

Mon, 02/06/2012 - 11:19 | Link to Comment kridkrid
kridkrid's picture

The only thing keeping it together is faith... faith in so many different things... which collectively becomes some sort of normalcy bias.  Each absurdity can be compartmentalized as some sort of outlier and mentally dismissed.  The system adapts slightly and consumes the absurdities to the point where we are somehow conditioned to believe that this will continue... and maybe it will... until it doesn't... then look out below.  I can't believe we've survived this long.

Mon, 02/06/2012 - 15:21 | Link to Comment CH1
CH1's picture

Well said, amigo, well said.

Mon, 02/06/2012 - 11:21 | Link to Comment Ignatius
Ignatius's picture

PaperBear

"It's not dark yet, but it's gettin' there"  Dylan

Mon, 02/06/2012 - 11:22 | Link to Comment EscapeKey
EscapeKey's picture

You never go full retard.

Mon, 02/06/2012 - 17:35 | Link to Comment akak
akak's picture

You clearly have never metZeroHedge's own RobotRetard, er, RobotTarder, um, I mean RobotTrader.

Mon, 02/06/2012 - 10:50 | Link to Comment Spooky Polish
Spooky Polish's picture

I got better idea Mr Lennon - let somebody to pay You to make him broke ... 

 

just like politicians 

Mon, 02/06/2012 - 10:50 | Link to Comment TuesdayBen
TuesdayBen's picture

Default 'wave'...ha ha

Mon, 02/06/2012 - 10:51 | Link to Comment DonutBoy
DonutBoy's picture

Incredible.

Mon, 02/06/2012 - 10:51 | Link to Comment Irish66
Irish66's picture

This is bullish for Greece.  sarc

Mon, 02/06/2012 - 10:51 | Link to Comment The trend is yo...
The trend is your friend's picture

So why are the shipping stocks trading up?

Mon, 02/06/2012 - 11:29 | Link to Comment Dr. Engali
Dr. Engali's picture

Because down is up and up is down in this crazy market.

Mon, 02/06/2012 - 10:52 | Link to Comment oogs66
oogs66's picture

just like ben said, no inflation, now he can print....he was going to anyways...

Mon, 02/06/2012 - 10:52 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

Baltic Dry don't lie!

Oversupply of ships? Fixed.

Mon, 02/06/2012 - 10:53 | Link to Comment Benjamin Simon
Benjamin Simon's picture

For christsake people, pull your head out.  They can make up for this on volume

Mon, 02/06/2012 - 10:54 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Yeah!  Just have them go from port to port not delivering anything forever! 

Forever!!!

Mon, 02/06/2012 - 14:27 | Link to Comment Matt
Matt's picture

Do they get some sort of "liquidity credits" from a regulatory body, just for making the trip?

Mon, 02/06/2012 - 10:53 | Link to Comment Seasmoke
Seasmoke's picture

kick the ship

Mon, 02/06/2012 - 10:54 | Link to Comment Slartebartfast
Slartebartfast's picture

Holy Ship!

Mon, 02/06/2012 - 11:26 | Link to Comment Captain Kink
Captain Kink's picture

Ship of fools...

Mon, 02/06/2012 - 11:09 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

Average minds think alike!  I posted that data here last week.

Mon, 02/06/2012 - 11:34 | Link to Comment aerojet
aerojet's picture

I believe it, but what I want to know is, why is gasoline at the pump so damned expensive right now, then?  Just Fed inflationary policy?  People are trying to use as little fuel as possible because it is a giant black hole in their monthly budgets--no unnecessary trips, and when running errands, make multiple stops while you're out.  Obviously, this is what people should have done in the first place, but Americans are a completely wasteful society.

I also think fewer commutes and more retirees factor in.

Mon, 02/06/2012 - 10:55 | Link to Comment Racer
Racer's picture

I am setting up a new business.... hiring ships... I will make a fortune

Mon, 02/06/2012 - 11:02 | Link to Comment junkyardjack
junkyardjack's picture

Make it a cruise line, profits all around

Mon, 02/06/2012 - 10:56 | Link to Comment fuu
fuu's picture

Now that's exciting stuff right there.

Mon, 02/06/2012 - 10:59 | Link to Comment scatterbrains
scatterbrains's picture

maybe soon the chairsatan will pay me to buy stocks?

Mon, 02/06/2012 - 10:59 | Link to Comment FubarNation
FubarNation's picture

I'd like to quote Joe O'Biden here by saying:

 

"This is a big fucking deal"

 

Someone who knows about the shipping business must lurk here on ZH.  Let us know if this is worth pissing about.

Mon, 02/06/2012 - 11:00 | Link to Comment hedgetr
hedgetr's picture

i want to hire uss enterprise. how much they are ready to pay me?

Mon, 02/06/2012 - 11:01 | Link to Comment yogibear
yogibear's picture

Food prices keep increasing. Know so many people which are buying off-brands to save money.

Bernanke and the Federal Reserve banksters keep thinking their inflation game will work.

Their just crushing demand and savings. Global wage arbitration will maintain or lower wages.

Mon, 02/06/2012 - 11:01 | Link to Comment ljag
ljag's picture

GR8! Now it won't cost me anything to haul my ass and stash outta dodge!

Mon, 02/06/2012 - 11:02 | Link to Comment Temporalist
Temporalist's picture

The BDI is up for the first time since Dec. 12, Greece will be okay in hours, Bernanke will flip the switch to positive growth in 15 minutes.

Nothing to see here. The emperor is not naked he's just wearing a new Cloak of Cloaking made possible by future technology because the future has already been won.

Mon, 02/06/2012 - 11:11 | Link to Comment Use of Weapons
Use of Weapons's picture

Apt user name, given that the future you wished for has arrived already.

http://www.guardian.co.uk/science/2011/feb/01/scientists-invent-invisibi...

Mon, 02/06/2012 - 11:15 | Link to Comment Temporalist
Temporalist's picture

Yes I know of this cloak it will be first given to all the kleptocrats that will escape the gulag before the proletariat know they've fled.

Mon, 02/06/2012 - 11:01 | Link to Comment GolfHatesMe
GolfHatesMe's picture

SubPrime Ships

Mon, 02/06/2012 - 11:02 | Link to Comment battle axe
battle axe's picture

And soon in the good old USA you will have to pay banks to hold your money for you, in your own savings account. Friggin Awesome.

Mon, 02/06/2012 - 11:06 | Link to Comment Seasmoke
Seasmoke's picture

with all the hidden fees and fine print, i think most already do

Mon, 02/06/2012 - 11:48 | Link to Comment VelvetHog
VelvetHog's picture

Wells Fargo started that model in the late '80s.  You must have missed that memo.

Mon, 02/06/2012 - 14:44 | Link to Comment Things that go bump
Things that go bump's picture

I had a small savings account that I was just keeping open with a few bucks for spite vaporize that way. There - that'll teach you.

Mon, 02/06/2012 - 11:03 | Link to Comment LawsofPhysics
LawsofPhysics's picture

LOL!  about those supply lines...

hedge accordingly.

Mon, 02/06/2012 - 11:03 | Link to Comment Peter K
Peter K's picture

Speaking of negative, you are sooooo negative. Haven't you heard, Europe is fixed ;)

Mon, 02/06/2012 - 11:03 | Link to Comment Scisco
Scisco's picture

Would it be possible to get a source for that headline?

Mon, 02/06/2012 - 11:05 | Link to Comment oldman
oldman's picture

Gray day here on the coast. Two meter high waves rolling in at 17 second intervals. The noise is such that my mind has organized the sound of the sea as a short piece of music that just runs over and over like the waves rolling in---I don't know what to do with myself today---go for a walk, talk to the pelicans,or what?
I had hoped that there might be a real even somewhere in the world that someone was reporting on; but aside from being paid two grand to hire a ship----there is nothing but the sdame old opinions regarding the past and the future.
I guess nothing is happening, so being a 'do-nothing dude', i'll just just do nothing again today.
Ah, such is this life we live om

Mon, 02/06/2012 - 11:11 | Link to Comment Temporalist
Temporalist's picture

When you're old an "event" is making it out of the shower without breaking your hip...or going to the bathroom regularly.

Mon, 02/06/2012 - 12:21 | Link to Comment EvlTheCat
EvlTheCat's picture

I hear that eating fiat keeps you regular. iPads not so much!

Mon, 02/06/2012 - 11:09 | Link to Comment fuu
fuu's picture

mani padme

Mon, 02/06/2012 - 11:06 | Link to Comment Uncle Remus
Uncle Remus's picture

"Slow boat to China" takes on a new meaning.

Mon, 02/06/2012 - 11:11 | Link to Comment Temporalist
Temporalist's picture

Aint nothin gonna break Bernak's stride, ain't nothin gonna slow him down, oh no, bonds got to keep on selling.

http://www.youtube.com/watch?v=TY41o-iZStI

Mon, 02/06/2012 - 11:06 | Link to Comment Voodoo-economist
Voodoo-economist's picture

anyone got a good breakdown of which banks have large credit exposure to shipping?

Mon, 02/06/2012 - 11:47 | Link to Comment mvsjcl
mvsjcl's picture

Look to Greece.

Mon, 02/06/2012 - 11:55 | Link to Comment Voodoo-economist
Voodoo-economist's picture

well ,yes of course, traditionally. There sure are other european banks exposed as well, some late joiners to the BDI bubble maybe?

Mon, 02/06/2012 - 11:07 | Link to Comment I am a Man I am...
I am a Man I am Forty's picture

and on this news shipping companies are up of course, dryships leading the way up over 6%, granted it is for signing a rig contract

Mon, 02/06/2012 - 11:07 | Link to Comment goldencrumbs
goldencrumbs's picture

Crucible - you're right. Ships are like women, it's not the initial cost that will break you, but the upkeep ;)

 

 

 

Mon, 02/06/2012 - 11:08 | Link to Comment resurger
resurger's picture

When the Ship goes downnnnnnnnnnnnnnnnnn you better be ready!

WHEN THE Ship GOES DOWN!

scratch .. scratch ...

dOWN DA DA DOWN, DA DA! DA DA DA DA DOWN DOWN

Down dow down down

Down down down down

Here's the Remixxxxxxxxxxxxx

 

Mon, 02/06/2012 - 11:10 | Link to Comment HD
HD's picture

Greece should just tow its debt out to sea. Problem solved.

To the "Love Boat" Theme:

Debt...

We owe it to you...

CDS...is worthless true....

And Debt...

We won't pay anymore...

Let it go...

ECB is so damned screwed...

 

The Debt Boat

Soon we'll be making another run

The Debt Boat

Promising something for everyone 

 

 

 

Mon, 02/06/2012 - 11:18 | Link to Comment Dr. Engali
Dr. Engali's picture

They don't have enough ships to haul all that debt.

Mon, 02/06/2012 - 11:10 | Link to Comment SmoothCoolSmoke
SmoothCoolSmoke's picture

BDI schmiDI.  9 am Bernake starts buying Euros hand over fist.  Up 50 pips in 50 mins.

Mon, 02/06/2012 - 11:13 | Link to Comment WillyGroper
WillyGroper's picture

It appears that the ship is hitting the fan.

Mon, 02/06/2012 - 11:26 | Link to Comment _underscore
_underscore's picture

I don't believe that you can be paid  (in nett terms) to hire a ship. It that were true they could save $2000 per day by just running the ship up & down the coast, empty.

Ships don't just crumble away either - true, there may be maintenance and/or re-commissioning costs for idle periods, but ships standing idle is alot less arduous for their structure/mechanics

ploughing through oceans & running those servicing costs.

 

The simple headline 'paid to hire a ship' is ludicrously wrong.

 

 

Mon, 02/06/2012 - 12:15 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

 

 

True, nobody is paid to hire a ship. Customer still pays, just not enough for shipowner to make a profit or break even.  Losing $1,000 a day is better than losing $10,000 a day.

Mon, 02/06/2012 - 12:56 | Link to Comment _underscore
_underscore's picture

Well that I can believe - just assembling & re-hiring a crew for example, can't be an insignificant cost, so just running the ship with a minor loss is still probably, nett, cheaper than an empty cold one.

I just wish some of these 'submitted by' posts were a bit more rigourous in the logic stakes.

Mon, 02/06/2012 - 11:14 | Link to Comment overmedicatedun...
overmedicatedundersexed's picture

was there too much over build or was it a big drop in trade world wide..ans yes and yes.

BLS: there is a big increase in shipping  with a seasonal adjustment and birth death model that one in three ships have left the planet taken by space invaders..empty cargo holds are not empty they are full of air!!

 

Mon, 02/06/2012 - 11:16 | Link to Comment Dr. Engali
Dr. Engali's picture

It's all coming together now. Ben is trying to fight the deflationary forces in the shipping business. And we all thought he was looking out for the banks.

Mon, 02/06/2012 - 12:37 | Link to Comment falak pema
falak pema's picture

real world and ponzi world, two worlds but one money line; if the inverted pyramid falls it'll hurt a lot but at least we'll be back to normality. Right now the norm is abnormal in all, even that it doesn't fall; it defies commercial gravity through irrational exuberance pumped levitation. The BDI is commercial gravity in motion...down a slippery slope it can only pick up in momentum. Now you tell me how it will end : in Olé! As the matador avoids crazy bull or in aieee, aieee, aieee; cornada time?

Mon, 02/06/2012 - 11:20 | Link to Comment falak pema
falak pema's picture

When I started in waste recycling business in 1994, all german municipal waste was shipped by municipalities, via clever middle men, to third world countries at negative rates; they didn't have a recycling system in place in Deutschland or for that matter in Europe. It went to Somalia, Philippines and Albania etc. And the going price delivered was 1000 Euro negative per ton! By loads of 5000 tons a shipment. They sold hundred of thousands of tons on that basis, as the EEC laws were in place, forbidding local dumping in Euroland and conditioning the prices that were paid to get rid of it abroad. Huge scam!

DO the calcs, a lot of jerks got rich paying bribes and pranks at both ends, leaving huge pollution and disease infested poor country dumps that smelt to high heaven and infecting local land and water; just like the bankstas do today. When you pay negative to move the stuff, all hell breaks loose, as the system is in total corruption by definition...the mafias make a killing always, they have the inside track.

Mon, 02/06/2012 - 11:20 | Link to Comment BandGap
BandGap's picture

Help me to understand this....the shipping lines are being subsidized to move "stuff" from A to B. So it's not really an opportunity other than to keep things moving along.

Really? Isn't the whole point here to move stuff that people want to sell? But if you don't have anything to sell then what's the point?  I'm cornfused, I wouldn't think shipping would be a big impediment to the sale of something, if there was something to sell. So if these were non-profit organizations things would still not be shipped via ocean going frieght?

I don't get it.  Why not just fuel the ships up and have them steam around in circles?

Mon, 02/06/2012 - 11:30 | Link to Comment Internet Tough Guy
Internet Tough Guy's picture

There are still goods to move, just too many boats competing for the load. Why not just go empty? Probably insurance reasons, etc. You might need to be under contract to be covered.

Mon, 02/06/2012 - 11:20 | Link to Comment Dermasolarapate...
Dermasolarapaterraphatrima's picture

aggregate demand is sinking deeper

 

(sorry for the pun)

 

Mon, 02/06/2012 - 11:24 | Link to Comment bloodhoundx7
bloodhoundx7's picture

If the damn things are underwater.......quit calling them ships.They are now Submarines.

Mon, 02/06/2012 - 13:45 | Link to Comment FranSix
Mon, 02/06/2012 - 11:24 | Link to Comment Ignatius
Ignatius's picture

Got it! Got it!  Let's put together a Zerohedge cruise... Tyler?.....Tyler....?  At these prices....

Mon, 02/06/2012 - 11:27 | Link to Comment GolfHatesMe
GolfHatesMe's picture

If only there was an Italian captain available

Mon, 02/06/2012 - 15:33 | Link to Comment Temporalist
Temporalist's picture

 

.

Mon, 02/06/2012 - 11:25 | Link to Comment silver500
silver500's picture

Just spoke to Steve Rodley, Glencore is paying for the fuel and the shipment moves the ship to the Atlantic where there is stronger demand.

Mon, 02/06/2012 - 11:31 | Link to Comment BandGap
BandGap's picture

Demand implies just that. How much demand can there be if you make money shipping your things?  I guess you might see some tax and fee revenue, but after that ??????

Mon, 02/06/2012 - 11:28 | Link to Comment scatterbrains
scatterbrains's picture

I should probably front run SPG ahead of any bullish break out when we learn that Reits begin using these same techniques, paying shop renters to stay.

Mon, 02/06/2012 - 11:28 | Link to Comment FranSix
FranSix's picture

The banks are going to furious that they can't get negative nominal rates on treasuries.

Mon, 02/06/2012 - 12:52 | Link to Comment lotsoffun
lotsoffun's picture

oh no.  they will get that.  they want to bleed savings as quickly as possible.

 

Mon, 02/06/2012 - 13:31 | Link to Comment FranSix
FranSix's picture

What might occur is certain changes to the tax code that allow write offs for things like negative nominal rates.  Certainly the shipper will be seeing a tax loss on negative shipping rates.

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