In Article 28 we noted economist Ben Hackett’s concern that Europe’s “economic downturn will cause the eurozone to follow the U.K., Spain, Portugal and others into recession.” Mr. Hackett didn’t pussyfoot around the issue. He’s making it quite obvious that the sky is falling in Europe, with no relief in sight – and he didn’t even mention Greece, the eurozone’s basket case.
So where is this “recovery” the media keeps talking about? If not in Europe, in Asia, maybe? Not really. Just last week Bloomberg published a story with this headline:
“China Cosco, CSCL Tumble After Wider First-Half Losses”
“China Cosco Holdings Co. and China Shipping Container Lines Co., the nation’s two largest listed ship operators by sales, fell in Hong Kong trading after reporting wider first-half losses.
“China Cosco reported its loss had widened to $ 767 million. CSCL’s Hong Kong listing plunged 11 percent after its first-half loss widened.
“The two companies both said overcapacity in container shipping was likely to continue after a glut of vessels sapped rates in the first half. China Cosco also forecast continued ‘excessive’ supply in the commodities shipping sector.” –
“Overcapacity” and “a glut of vessels” are terms used by those shipping geniuses who refuse to come right out and admit that they failed to recognize that rapidly developing unemployment would greatly diminish the demand for goods, and ultimately leave them holding the bag.
Too many of those geniuses remain in denial. Back in May, they were being warned by a Chinese shipping official that the country’s shipping industry would face a difficult situation within the year as a result of slumping demand.
“It would be more difficult in the second half than in the first,” Chang Dechuan, the Qingdao Group chairman said. “Port and shipping enterprises need to be well prepared as the global economic downturn would mire the import and export in the next two to three years, and the situation is compounded by uncertainties in the domestic economy,” he said.
The chairman was right, and by citing the “uncertainties in the domestic economy” he was saying that there’s no relief in sight in Asia, either.
Here in the U.S., our leaders have their heads in the sand … and elsewhere. Europe’s leaders are wringing their hands and insisting that the little people buy into “austerity” programs – as though fasting and going without shoes will turn things around in the collapsing eurozone.
No. Only shipbuilding ever turned things around. It’s in your history book. Look it up.