Floating Debts

Those in attendance at a recent material handling conference heard an industry official say that although troubled water might lurk ahead in 2009, all signs are pointing to a turnaround in the next 18 months. The industry forecasts indicate “a decline of new orders in 2009 in the 18% to 20% range, recovering late in 2010,” the speaker stated, and he said that he based his projections on “rate of change” and “compared them to leading indexes”.

It appears as though the speaker didn’t consult very many “leading indexes”. That decline in new orders he mentioned has adversely affected the entire supply chain, and just yesterday The Korea Herald carried this special report about the near collapse of South Korea’s shipbuilding industry:
• “South Korean shipyards are asking state-run lenders to increase loans and extend financing for orders as a deeper-than-expected economic slump dries up their cash holdings, industry sources said Wednesday. According to the sources,” the report continued, “ the shipbuilding industry called for the Korea Development Bank and the Export-Import Bank of Korea to increase their financing for shipbuilding orders and extend loans for their operations. The moves came as shipyards in South Korea, the world’s largest shipbuilding nation, suffered a sharp drop in shipbuilding orders.”

And speaking of shipyards, here’s the latest from Greece:
• “ThyssenKrupp AG is putting the Skaramangas Shipyards up for sale on April 1, after its decision on Thursday in Essen, Germany, to make cutbacks of half a billion euros per year due to the economic crisis. The news had not taken the Greek government by surprise, according to sources, as for about a year now there have been serious problems with the shipyards that have pointed to the need of a rescue plan, not just for Skaramangas but for the entire industry in Greece.

Reuters reported a warning from U.N. Secretary-General Ban Ki-moon on Friday that the global economic crisis could lead to a political crisis and social unrest, and called on the world’s leading economies to act.
• “I am concerned that if we do not properly address this issue swiftly, this may develop rather alarmingly into political instability, into a political crisis,” the U.N. chief told diplomats in Moscow. “If life goes much like this and harder … social unrest will surely increase,” he said. “That is why in London I will speak forcefully for action to prevent the potential catastrophe in human development.”

Well, here in the U.S. we’re doing our bit though, aren’t we? Aren’t we promoting bailouts and economic stimulus plans? Well, yes – but that’s not the way to do it, according to the president of the European Union. U.S. plans to spend its way out of recession is “a way to hell”, he said bluntly. The U.S. “did not take the right path,” is the way he put it. And yet, we’re hearing that “all signs point to a turnaround in the next 18 months”, right?

[What signs? Like giving $ 250 apiece to some 50 million old-timers? Sure, that oughtta do it.]