Here’s some fluff some dreamy-eyed UK-based maritime consultants came up with yesterday.
“Owners gloomy but ‘may have touched bottom’”, is the way the fantasizing began.
“Friday, 03 April 2009 – Overall confidence levels in the shipping industry have declined by more than 20% over the past twelve months. But, according to the latest Shipping Confidence Survey produced by major UK-based international shipping accountant and consultant Moore Stephens, some owners think things could start to improve …
“Despite the drop in confidence levels, a number of respondents felt that things were likely to improve over the coming twelve months and beyond. Comments ranged from, ‘As owners we have already touched the bottom, and I don’t believe we can go any lower’, to ‘We are quite confident that there will continue to be good business opportunities in the months ahead, and perhaps this is a good time to enter the market from the point of view of investment.’
“Other comments included, ‘In twelve months’ time, the market will have factored in most of the bad news and market confidence will start to return, led by the US, Europe and Asia’, and ‘Shipping will start an upward trend in the third quarter’.
We’re being polite when we say they’re “dreamy-eyed”. Either they’re deliberately ignoring what’s being revealed by the world’s leading newspapers and journals, or they’re trying to con the gullible among us. And that shouldn’t be too difficult, considering how many of us fall into that category.
Moore Stephens dropped the ball though. Here are some factual reports they should have noted and brought to the attention of their clients:
• From the Journal of Commerce on April 2, 2009 – “West Coast Containers Plunge — Volume at five major ports tumbles 35 percent in February. Container volumes at West Coast ports took an especially troubling dive in February and every major gateway felt the pain.”
• From Lloyd’s List on Friday 3 April 2009 – “Worst is yet to come for box lines, warns Hamburg Sud — Hamburg Sud president Ottmar Gast has warned the container industry to prepare for much worse to come as it struggles to get to grips with what he dubbed an ‘unprecedented’ crisis.”
• From Lloyd’s List on Friday 3 April 2009 – “Idle boxship tonnage set to soar — Unemployed containership tonnage is poised to soar in the coming months as lines return surplus chartered vessels to their owners. Industry experts predict that the current amount of idle capacity could soon be dwarfed by a new wave of ships that operators will offhire this year as they continue to downsize their fleets.”
Closer to home, The Washington Post published less than “dreamy-eyed” figures on April 4, 2009:
• “Unemployment Hits 8.5 percent, Blunting Hopes That a Turnaround Is at Hand” — “The U.S. job market declined sharply last month, dulling hopes that the economy could be on the brink of a turnaround and signaling that American workers are still in the thick of a severe recession … The economy shed 663,000 jobs in March, bringing to 5.1 million the number of jobs lost since the start of a recession that, next month, will rank as the longest downturn since World War II … A broad measure of joblessness, which includes people working part time but who would prefer full-time work and people who want work but have given up looking, has hit a record 15.6 percent.”
The AP brought us more discouraging words on Sunday April 5th.
• “WASHINGTON – In the coming weeks and months, hundreds of thousands of jobless Americans will exhaust their unemployment benefits, just when it’s never been harder to find a job. Congress extended unemployment aid twice last year, allowing people to draw a total of up to 59 weeks of benefits. Now as the recession drags on, a rolling wave of people who were laid off early last year will lose them … ‘It’s going to be a monstrous problem,’ said an economist at the Urban Institute.”
But wait. Aren’t the leaders at the G-20 Summit addressing this joblessness issue? Didn’t their seven point communique address this worldwide crisis? Here’s the summary provided by the AP:
• More regulation: All ‘systemically important’ financial institutions, instruments, and markets must be regulated, including hedge funds – opaque investment vehicles favored by institutional investors and the very rich.
• Executive pay: Endorses new principles on pay and compensation to avoid pay schemes that encourage excessive risk taking and reward failure.
• Tax havens: Non-cooperative offshore tax havens will be named and shamed, and could face sanctions if they do not agree to accepted international rules. Governments have laid out huge sums and face larger deficits, and are in no mood to see tax revenue slipping away.
• Rating agencies: These companies, much criticized for giving high ratings to securities that turned out to be risky, should face an international code of good practice to eliminate conflicts of interest. Critics say security issuers pay for the rating and that this constitutes a conflict.
• Bank reserves: Banks should build up more capital in good times to buffer against downturns, but only after recovery occurs. Many banks have needed new capital during the crisis.
• IMF: Another $ 1 trillion for the world economy through the International Monetary Fund, which loans to governments in financial trouble, and other institutions.
• Trade: Rejection of trade-blocking measures to protect individual countries’ economies, plus another $ 250 billion in financing to help trade flow.
[Do you see anything in there about job-creation or containerships? Maybe this “communique”is the reason for that riot that took place yesterday at the bridge connecting France and Germany.]