Maybe some would call this a sign of a bottom. But for those who believe the bond market isn't a bubble, we say may the force be with you.
One sign the global economy isn't what the cheerleaders want it to be is plain, old vanilla shipping. A recent WSJ article had this to say: Until a year ago, the shipping industry was ordering ships in droves. This year, orders of new vessels have fallen to a record low and companies can't get rid of ships fast enough.
About 1,000 that have the combined capacity to haul 52 million tons of metric cargo--about the weight of 142 Empire State buildings--will be dragged onto beaches, cut into pieces and sold for scrap metal this year. That is second only to the record amount of capacity of 61 million so-called dead weight tons that were scrapped and real cycled in 2012.
The global economic slowdown is putting shipping through its most bruising period since the 2008 financial crisis....As the companies, mostly based in Europe and Asia, fight for bigger shares of the global market, freight rates have dropped so low they barely cover fuel costs.
Much like the energy industry this is capacity going offline. The average for recycling ships is 30 years, the Journal notes. But in 2016 it's been cut to 15 years, a move, as noted, to cut excess capacity. But cutting over capacity doesn't solve the problem. There is something out their called China, not to mention the almost non-existent signs of any growth in Europe.
China's been a big importer of commodities, just ask those exporting commodity nations that are feeling China's slowdown. Or take a look at this. zerohedge.com/news/2016-08-17/japanese-imports-exports-crash-worst-rate-2009
For the 19th month in a row, Japanese Imports plunged - dropping 24.7% YoY (worse than expected), the biggest drop since Oct 2009. Exports were just as dismal, also missing expectations, plunging 14.1% YoY - worst since Oct 2009. The biggest driver of the collapse of Japanese trade was a 44% crash in the Chinese trade balance.
One sign the global economy isn't what the cheerleaders want it to be is plain, old vanilla shipping. A recent WSJ article had this to say: Until a year ago, the shipping industry was ordering ships in droves. This year, orders of new vessels have fallen to a record low and companies can't get rid of ships fast enough.
About 1,000 that have the combined capacity to haul 52 million tons of metric cargo--about the weight of 142 Empire State buildings--will be dragged onto beaches, cut into pieces and sold for scrap metal this year. That is second only to the record amount of capacity of 61 million so-called dead weight tons that were scrapped and real cycled in 2012.
The global economic slowdown is putting shipping through its most bruising period since the 2008 financial crisis....As the companies, mostly based in Europe and Asia, fight for bigger shares of the global market, freight rates have dropped so low they barely cover fuel costs.
Much like the energy industry this is capacity going offline. The average for recycling ships is 30 years, the Journal notes. But in 2016 it's been cut to 15 years, a move, as noted, to cut excess capacity. But cutting over capacity doesn't solve the problem. There is something out their called China, not to mention the almost non-existent signs of any growth in Europe.
China's been a big importer of commodities, just ask those exporting commodity nations that are feeling China's slowdown. Or take a look at this. zerohedge.com/news/2016-08-17/japanese-imports-exports-crash-worst-rate-2009
For the 19th month in a row, Japanese Imports plunged - dropping 24.7% YoY (worse than expected), the biggest drop since Oct 2009. Exports were just as dismal, also missing expectations, plunging 14.1% YoY - worst since Oct 2009. The biggest driver of the collapse of Japanese trade was a 44% crash in the Chinese trade balance.
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