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Shipping Rates Go... Negative
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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Duh, wake me up when that (loan impairment) happens.
Damn! I'll PAY $1 to rent a boat. Just keep me away from Italian islands. Champagne showers bitchez, I'm on a boat!
http://www.youtube.com/watch?v=R7yfISlGLNU
I'm on a boat motherfucker take a look at me
Straight flowin on a boat on the deep blue sea
Bustin five knots, wind whippin out my coat
You can't stop me motherfucker cause I'm on a boat
Havent heard shipping rates go down for little folks that import by the container, in fact, rates have nearly doubled over the past few years, including lots of little DHS add-on "freedom enhancement" fees they dont call taxes.
Ah... the culmination of many years of central planning. I still say the government should buy some of those ships and turn them into FEMA barges. Only a matter of time I suspect.
Brings this to mind.
Negative Money - Natural Money?
http://www.mindcontagion.org/worgl/worgl2.html
Could Gesell's Natural Money Theory be useful today in an environment of declining money velocity?
They also tried this in Alberta. The two problems they had are lack of authority to issue curency, and the stamps kept falling off.
If you applied this same idea, but used debit cards, I think it could work. All taxes could be remitted instantly, and the money used to pay for more work on projects. You just need the authority to create the money, the initial seed money of the underlying currency, and somewhere to test it out.
All we have to do now is play Wagner to the seamen in Hamburg and they'll invade Poland! We'll have a new Siegfried line in Dantzig corridor!
Maybe use some of those tankers to send the Teutonic Order to Tartus and then to Tehran. Lets be imaginative here in Euro land. Let's preempt Potus and US MIC while they recover from Super Dupa hangover.
Quick, Merkozy to fix. Like in Libyaaa, where Camy-boy became Rob Roy and pumped n dumped the Eurotrain as great train robber.
seems to be less containers here in Halifax than usual, although i saw a half full ship land yesterday...+ 2K to the local economy
The issue is that American retail was essentially forced to buy massive inventory to prop up sales for the Wall Street sector. Apple forced retailers to take 10x the quantity of iPhones tey tho7ght they could sell just for the privalege of selling them. Nike forces retailers to take millions in merchandise they don't want just to sell the products they want, also helping make sure there is no room for competitors inventory. GM forces dealers to take delivery they don't want, etc etc. There is too much inventory out there. My retail partners tell me the have on average, 3-6 months in inventory of everything they sell. They are placing small fil in orders but no large purchase orders are going out. Think about this. What hapens to a company when they don't recieve any orders for 3-6 months?
They have better mastered the art of flipping paper?
They didn't have to go all negative and stuff. They could have hired me to scrape barnacles. I've only been working about 1/8 of a schedule the past 4 years. I've got free time!
Could someone please explain the charts of SEA, DRYS, and EGLE in relation to the BDI?
Do you see what happens when the BLS is left out of the loop?
As was posted posted a week ago or so. Thx for TD to keep everyone up to speed.
ALL HANDS OFF DECK.
http://www.zerohedge.com/contributed/shipping-loans-go-bad-european-banks#comment-2115069
Maybe all the credit unworthy buyers of GM's newest line of plastic fucking garbage need to have reverse car payments? LMAO.
Those are known as government fleet operations.
Sucks to be part of the economy that actually does something.
Maybe the ship captains could start a hedge fund instead and speculate on the price of Italian bonds?
"
They lose money on every trip, but they make it up on volume."
Thread Winner ! :)
JMG
That sounds like a business owner I worked for off and on for 15 years. Ever job he claimed to be losing his ass. He must have a lot of money to throw away!
Ride, Captain Bernanke Ride, upon your mystery ship....
Crystal ship.
Planning? Planning? We don't need no stink'n planning. This Baltic Dry Index issue has to be one of the better poster-boys for this whole economic malaise we're surrounded by...
Has Obama and Berspankme offered to stimulate this industry yet?
Carnival Cruise Lines needs a new boat...
...or Reggie Middleton needs one too, for that matter...
Taking a Bahama cruise in a shipping box isn't my idea of a relaxing vacation, beats an Itallian cruise though!
Wow, this is unreal.
The shippers should learn from the BLS and release only "market positive" numbers.
The Baltic Dry Index might be indicating that a contraction is occurring, either due to lowered forward looking expectations, or due to current real weakness.
http://www.zerohedge.com/news/observations-engineer
A few years ago, there were articles about idle railroad cars and ships that made the news. It might be interesting to know what the current situation is with idled railroad cars and ships, due to the recent news about the Baltic Dry Index.
Can anybody research this, and compare idled ships and cars then and now? There might be an interesting trend there.
I made the below comments two years ago. One of the articles said that the container ships sitting idle may increase from 12 to 25 percent. That 2 year period is now passed. Can anybody get the current figures to see if there has been a percentage increase?
http://www.thestreet.com/story/10515764/idaho-us-rails-clogged-with-cars...
http://www.dailymail.co.uk/home/moslive/article-1212013/Revealed-The-gho...
12 percent of the worlds container ships are sitting idle where normally they would be in use, and there are projections that 25 percent of the container ships may be sitting idle in two years.
I don't know why shipping stocks haven't been going down further- negative shipping rates, the BDI is at a 1986 level, dividends being paid out of debt. and my short portfolio is down 16% since last mid December. I guess bad market timing on my part.
But anyone who talks about the scrapping- forgetabout it, the Chinese are continuing to make ships at a rate that exceeds demand- and the number of ships still on order is huge, they (the shipping companies) cannot scrap their ships all of a sudden and get a new ship it takes 12-24 months. Most of the glut have a 2005-2007 vintage so figure 10 yrs best case (most can go 20) to scrap puts them in 2015 to 2017 so 3-5 yrs away- they cannot operate with just gas money coming in.
But having explored the shipping industry prior I can say the mgt are about the laziest, slowest moving guys I have ever seen in an industry and some of them aren't even Greek.
Welcome to the new new economy. Workers pay to work. Shipowners pay to ship. Only traders actually make money courtesy of the fed.
Don't the Greeks own a lot of ships? This must be jsut what they need.
I wonder if anyone is doing the carry trade thing with tankers at these rates?
Would they pay us to ship DC to Europe where they belong?
I'd buy that for a Euro.
FRNs stoking up the cooking fire,
Empty bean cans swaying on the perimeter wire.
Despite the full-metal circle-jerk around the abyss
I'll be home for the apocalypse.
[Not a poet and I know it.]
How about:
FRNs stoking up the cooking fire,
Empty bean cans swaying on the perimeter wire;
Despite the full-metal circle-jerk around the abyss,
I'll be home for the apocalypse,
As things are getting quite dire.
Crowd poetry - I love it.
I reposted a derivative of that elsewhere:
Foxtrot News Alert
Until further notice, Foxtrot News presents the following executive summary of global geopolitical and economic news:
A full-metal circle-jerk around the gaping maw of the abyss.
This very short article explains it in layman's terms. The Baltic Dry Index, a measure of how much freight is moving in cargo chips has gone negative. That means that shipping companies will pay shippers to move freight through their ships. The reasons is that cargo ships (just like refineries) are very expensive and complex, and if they are not used or maintained they deteriorate quickly.
This is an amazing commentary on what is happening to globalized trade... it's vanishing. -- Michael C. Ruppert
http://www.collapsenet.com/154.html
Isn't the BDI returning to 'normal' levels?
The BDI has gone back to 2001-2002 levels. That seems reasonnable.
The BDI/S&P 500 ratio is back to the 2001-2002 levels. That seems reasonnable.
Now if only OPEC allowed oil prices to go back down to 2001-2002 levels, I'd be all for it!
On a semi-related note: Did you guys know that since 9-11, you can't use UPS, Fedex, etc. to ship freight from person to person? They only ship freight business-to-person or business-to-business.
W
T
F
!
?
!
?
It's all because they hate us for our freedoms.
All the ships were empty
The sailors out of work
The port girls'
only customers
Were bankers and their clerks
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