Tuesday, September 15, 2009

Santa's sleigh sighted off Singapore

And it's sitting empty.

Revealed: The ghost fleet of the recession
Here, on a sleepy stretch of shoreline at the far end of Asia, is surely the biggest and most secretive gathering of ships in maritime history. Their numbers are equivalent to the entire British and American navies combined; their tonnage is far greater. Container ships, bulk carriers, oil tankers - all should be steaming fully laden between China, Britain, Europe and the US, stocking camera shops, PC Worlds and Argos depots ahead of the retail pandemonium of 2009. But their water has been stolen.

They are a powerful and tangible representation of the hurricanes that have been wrought by the global economic crisis; an iron curtain drawn along the coastline of the southern edge of Malaysia's rural Johor state, 50 miles east of Singapore harbour.

It is so far off the beaten track that nobody ever really comes close, which is why these ships are here. The world's ship owners and government economists would prefer you not to see this symbol of the depths of the plague still crippling the world's economies.

Read more: http://www.dailymail.co.uk/home/moslive/article-1212013/Revealed-The-ghost-fleet-recession.html#ixzz0R6lQ5iPd
That article is full of pictures and other information indicating the equity market rebound is simply financial stocks returning to "normalcy" and bounding over the open main street.

Back in the real world, Banks Face $90B Ship Write-Downs:
The write-downs would be a delayed response to a crash in ship values of more than 50%, which has fatally undermined loan cover.

This fall, measured by the Baltic Dry Index, suggests heavily geared shipowners are under particular pressure. The fall in the index is seen as a leading indicator, which suggests the prospects for equities are also set to worsen following a recent rally.

Banks are using small print in their contracts to escape from funding commitments, leaving shipyards and those who commissioned ship construction to fight it out. Coffin said the scrapping of ships and construction projects should stabilise the situation, once the next period of write-downs was under way, but he said short-term prospects were poor.
And what will that do for world demand for steel and all the other industrial metals?

There is a fascinating collage of correlating charts involving the Baltic Dry Index at Investmenttools.com, comparing the Baltic Dry index and various other indexes and commodities, as well as technical analysis of the index itself, including this rather pregnant one:

PS: Further reading:
Other relevant charts and data re falling US retail sales


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