Another ominous sign comes to light as world shipping starts to grind to a halt.




The above graph illustrates the price that importers and exporters will pay for shipping. There's no need to be a Financial Analyst to see that that graph has just shot down drastically.
The situation now is that for those shipping companies that can actually get letters of credit are now slowing down their ships to reduce fuel consumption, slashing crew numbers and leaving some of their tonnage in dock with the lights out.
The problem with letters of credit, which are needed before a vessel leaves harbour, is that demands between banks are being denied as banks are not trusting each other. The Libor rate and the interbank lending figures are just another reinforcement of this catastrophic process.
What we are witnessing is the logical consequence of reduced demand, reduced consumer spending and increased unemployment. The Main St problems that seem to constantly elude the Financial sector's prognosticators. The shipping industry themselves are talking about the inevitable upturn. What upturn ? To increase shipping volume and increase the freight costs to a profitable level we need to have..

1. Increased Consumer Demand
2. Increased Employment
3. A functioning global banking system

Remember the basics and you can always have a clearer picture.
This is a quote from an industry spokesman.

"I also think such situations [as the BDI decline] will take at least a couple of months to reverse to normal. The disruptions will continue before trade finance and cargo flows get back to normal levels," Khalid Hashim, managing director of SET-listed Precious Shipping Plc (PSL)

A couple of months ? So we should be just about OK just in time for the New Year. it will be so great watching  the Presidential inauguration on my brand new giant plasma screen TV in my $500,000 house, before I go out to my high paying Manufacturing job that Mr Bush kindly brought back from Asia and gave back to me. So what's the assumption here ? That what has taken years of slow motion wholesale economic destruction will be magically turned around in 2 months. The US will have restored it's industrial might, people currently unemployed will have jobs and those eating out of dumpsters and living in the new "Tent Cities" will have got their houses back.

Golly, it just comforts me so much that we have such veritable Captains of Industry steering this half sunken Titanic.


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