We had a global economy that had been artificially launched into orbit by people buying crap they didn't need with money they didn't have. When the money they didn't have dried up, then they couldn't buy the things they didn't need. And then all the boats that would have carried the things they didn't need to the stores that now can't pay their rent wound up parked here.
The only "green shoots" I see there are kelp wrapped around the anchor chains of idled container ships.
(H/T to Billy Beck.)
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22 comments:
Used to be in that industry. 5K$ per day charter doesn't even pay the interest on the loan the shipping company took out to pay for a ship of any consequence.
Heck, I'm not even sure it pays daily operating costs on moving tanker.
And wait till fuel goes up. You think filling up your SUV hurts... wait until your fuel bill gets measured in 100's of tonnes.
I tipped to the notion of logistics stats as economic indicators by reading Karl Denninger and Mish Shedlock. It's interesting stuff, and I remember suspecting that the economy was picking up steam in the '90s by the observation that I seemed to be waiting at railroad crossings more often.
So...we should...start living on...boats? ;)
Is anyone else thinking of "The Raft" from Snow Crash? :D
I wonder how much they'd want for one of those ships... Start your own mobile Libertopia!
Green shoots? Change that double-o to an i.
FWIW, it's easier to drive through Houston's 57 miles of I-10 than it was just a year or two back. Fewer semis, among other reductions in traffic.
Art
But no less an "authority" than Ben Bernacke says "The recession is over." Y'mean we shouldn't believe him? He's a Government Expert.
Boat Guy - You've got two reasons there why we shouldn't.
Jim
Well, yeah, the recession is over. Trouble is, the depression is just beginning. The coming stagflation is most likely gonna make 1980-1982 look like a minor and very short-term event.
Art
I love the comments too- like this one by "Joanna" (thankfully not our own Joanna)
"... continual economic growth (capitalism) is a linear, and totally unsustainable model."
I wish I had some of what she was smoking. On second thought, no.
Art - That's in line with something I was hearing most of last week. Something along the lines of this latest recession is the worst recession since The Great Depression.
Well, maybe this is the worst "recession", if one classifies the event of 1980-1982 as a depression (which it was). They make it sound as if we've not been this economically down in the dumps since the thirties. Period. Includes all years, all events.
Idiots.
The Fudgie Ghost says:
I now do not believe a word from any government or finance-world person.
Including "the", "and" and "a". . .
Kinda ironic now that "government is good" types are in control. . .
Word verification: "ovionst"
"Just put that rake ovionst the wall, thanks"
Oh, I crack myself up sometimes. . .
I work down by the Port of Long Beach, and container traffic has dwindled tremendously.
At least I don't get delayed by the cargo trains anymore!
Having steamed through that part of the world, and spent far too much time on a bridge where all you could see was other ship's superstructures (not even their hulls, we occasionally passed that close), at least the pilots/captains/crews of those ships had the presence of mind to park them out of the bloody way.
That said, that many ships idle in one spot of the world? Just think about the rest...
All snarking aside, that is a genuinely frightening article. I first saw it yesterday, I think, when the InstaLord linked it. 12% of the world's cargo fleet, sitting idle. And the first rational explanation I've seen of why the price of diesel fuel is so low, lower than it's been in years: many of those ships run on diesel.
I don't understand the world of high finance. I honestly don't understand how Bernanke can say something like "the recession is almost over" when we have things like this "ghost fleet" going on. I don't think I'm a stupid person. When something is this big and I can't understand it, I get scared.
I saw it at Beck's.
I saw it at Lex's.
Popped in and it was here too.
What it means is that commerce is slowing down and it's not likely to recover any time soon.
Less of anything you want and higher prices for things that are available.
Its economics even the 'Won' can understand.
Gmac
Boat Guy--
Bernacke's just going to be mumbling things like that until he's right next to the hatch for the Escape Pods.
Often shipboard engines don't run on the diesel you pump into your semi. They use what's called "residual fuel" which is pretty much what's left over when they refine out all the good stuff. They use the lighter diesel for warming up the plant (and heating the residual fuel so it can be pumped) but most of their "steaming" is done on the heavy stuff. As for the $5k/day figure quoted above, I seem to remember burning between 2500 and 5000 gallons of diesel a DAY on our service vessel in the Gulf of Mexico. This was a small, 225' long, 13k HP utility boat. Just think what a "real" ship would burn.
"Real" ships don't measure it in gallons....they measure it in TONS. The 660 foot ship I work on burns something like 10 tons a day when cruising at 20 knots.
Gmac: Its economics even the 'Won' can understand.
Dreamer...
Amateurs study tactics. Professionals study logistics.
http://www.telegraph.co.uk/finance/financetopics/recession/6190818/US-credit-shrinks-at-Great-Depression-rate-prompting-fears-of-double-dip-recession.html
P-E has been "on the money" throughout all this present "malaise".
Art
I work in logistics here stateside. As early as late last year, around the beginning of the 4th quarter, the shiplines -- Maersk was one of 'em -- were bidding containers from the Pacific Rim for bunker. For those of you not in the business, that means "fuel cost only".
A 40-foot container shipping from, say, Korea to Long Beach would typically cost the client somewhere around $4,700 to deliver. Bunker on that container would at the time have been somewhere in the area of $700. An importer's Paradise. Problem was, the lines couldn't find any takers.
That was my "uh-oh" moment.
'Berg
wv: miessi -- word only used in word verification algorithms. And Scrabble®.
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