This is not helping to give October a better name

The war stories are coming faster than they can be recorded for retelling to the grandkids when they ask, "Poppa Guambat, what was it like in the Greatish Depression?"

Here's three, randomly chosen from many, showing up today.

Simon Constable writes a Dow Jones NEWSWIRES column about as how the shipping companies are sinking below their gunwales.

While the Dow Jones Industrial Average pulled back around 20% since mid August, the shippers are all down between 50% and 70%. The shipping companies make their money hauling bulk freight such as iron ore, coal and grains across the ocean.

The dramatic selloff for the group came as a shock even to the experts. Many shipping analysts were eagerly anticipating a rapid bump in maritime freight hauling activity following the end of the Beijing Olympic Games in late August. Instead of picking up, the shippers saw business deteriorate at breakneck speed. The Baltic Dry Index, which tracks the cost to move bulk freight across the ocean, collapsed from around 7,190 the third week in August to 1,976 recently - an eye-popping 73% decline.

"It looks like the financial crisis in the U.S. and Europe is having spillover effects in emerging markets," says Min Ye, a steel stock analyst at Morningstar in Chicago. "Asian economies are export-led and also global trade was at historically high levels."

when the western demand for Asian exports fell back, industrial output in China also took a dive. As a result, demand for steel slackened and with it use of iron ore, key input in the manufacture of steel.

Despite the recent slowdown, analysts in general believe in the secular China growth story. Cantor's Boyden says at current prices the stocks represent a "phenomenal buying opportunity," adding, "Right now I think they have been ridiculously oversold."

In a related item, FT Alphaville reported that the metals miners were suffering a meltdown of similar proportions in London, which does not bode well for the Australian market tomorrow.

The London mining disaster

Ostensibly caused by a cautious statement from Rio Tinto earlier, Wednesday saw a full blown crash in resources stocks. China, the Rio chief executive said, was reining in demand. No mention of the super-cycle there.

They provided a picture worth another bunch of words:


Guambat is reminded of the chart he put up in Frightful Friday's post, showing, in Australian market terms, a bit of a proxy for the dot.commodity boom/bust, from the 2003 low to the 2007 high, retracing back down to the 61.8 Fibonacci level.

And then there's the banker story du jour. Jeffrey Hodgson wrote for Reuters about how the structure of the private banking fee models was buckling by the weight of over-structured engineering of their products.

The stunning plunge of financial markets has prompted wealthy clients to sell equity holdings and shun higher-fee products for the comfort and safety of cash, private bankers and industry experts told the Reuters Wealth Management Summit this week.

"If you look at private bank asset-under-management growth, a lot of it was fuelled by the sale of structured products. You cannot go to a situation like now, where tructured products is a dirty word, and not have private banking affected."

Assets held by the world's richest people rose by 9.4 percent to $40.7 trillion in 2007, according to the Merrill Lynch and Capgemini Annual World Wealth Report released in June. But trillions in wealth has been wiped out globally since the credit crisis began over a year ago, and it's not clear when the carnage will end.

Analysts note that a disproportionate amount of their private banking fee income is generated from riskier asset classes like equities. Structured products, which often use complicated financial instruments such as derivatives, are seen as particularly big fee generators for the banks.

"The values you can generate on cash management is clearly not as high as on some alternative investments. These are 30 to 40 basis points. So, gross margin is clearly going down," said Sebastian Dovey, managing partner at wealth management
consultancy Scorpio Partnership.

"The industry needs to get used to lower return on assets in 2009. Clients will go for lower-yielding products," said Boris Collardi, Chief Operating Officer at Bank Julius Baer. "All of us will have to look again at the cost side to adapt to the current market situation," Collardi added.

Yet many of the private bankers told the summit they still planned to expand in the coming years, particularly in emerging markets like Asia where higher growth rates than in the West are still generating new millionaires.