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“Worse than 2008”: World’s Largest Container Carrier on the Slowdown in Global Trade

February 12, 2016

“Worse than 2008”: World’s Largest Container Carrier on the Slowdown in Global Trade

“Massive Deterioration,” the CEO called the phenomenon.

“Bellwether for global trade,” that’s how the Financial Times described Maersk Lines, the world’s largest container shipping company. It’s owned by Danish conglomerate AP Møller-Maersk, which also owns, among other divisions, Maersk Oil. The conglomerate reported fourth quarter earnings today. And they were a doozie.

Maersk B shares plunged over 9% to 7,395 Danish kroner, before bouncing off and closing at 7,875, down 3.6% for the day and down a breath-taking 52% from their peak on March 30 last year.

Global economic slowdown — or worse? That’s the question. This is what CEO Nils Andersen told the Financial Times in an interview after the earnings release:

“It is worse than in 2008. The oil price is as low as its lowest point in 2008-09 and has stayed there for a long time and doesn’t look like going up soon. Freight rates are lower. The external conditions are much worse, but we are better prepared.”

“Better prepared,” that is, than the Group had been in 2008.

He called global trade conditions “abnormal.” Containerized imports to Europe, Brazil, Russia, and West Africa all fell – in Europe and Brazil due to various economic reasons; in oil exporters Russia and West Africa due to the collapse in the price of oil.

The earnings report reflected it: in terms of seaborne container freight, the year had started out with some room for optimism and hopes for growth, but in the second half, and particularly in the fourth quarter, those hopes got hammered by an increasingly gloomy reality.

“Massive deterioration,” Andersen called this phenomenon in the interview.

“Acceptable full-year result in challenging times,” is what the Group called the phenomenon in its earnings report.

…click on the above link to read the rest of the article…

 

Here Come the Money Helicopters!

October 3, 2015

Here Come the Money Helicopters!

$10 Trillion Goes to Money Heaven

We interrupt our series on what to do if you have no money to bring you an update on those who are losing it. (You can catch up on Parts I and II of that series here and here.)

What was the best place for your money so far in 2015? Cash! Compared to cash, almost everything is down. We are headed for the worst quarter for stocks since 2011, says the lead story in today’s Financial Times.

Global stock markets have lost $10 trillion of their value over the last three months. What? Where did all that paper wealth go? The old-timers say it went to “money heaven.”

 

money heavenOne fine morning in money heaven….will it ever rain down again? Of course, no money has actually disappeared. Only make-believe values have.  Image credit: Salvatore Vuono

We’re not so sure. But we stop. We stare. We look at it as we would at a corpse. What happened to its life force? Where did it go? Why is it no longer there? We have no answer. But looking at a stock market sell-off is like standing over an open coffin: We are in awe at the power of the gods to take as well as to give.

They ask no one’s permission. They follow their own playbook (which they never reveal to mortals). And they are as much a law unto themselves as the NSA. But what’s $10 trillion that never actually existed anyway? Easy come, easy go, right?

Well… yes… and no. It’s usually a pleasure to welcome a baby, but a funeral can be painful. And every one of those dollars – now headed for heaven or hell – will be missed by someone.

 

…click on the above link to read the rest of the article…

Europe’s Rising Fear of Upheaval in Spain

September 3, 2015

Europe’s Rising Fear of Upheaval in Spain

After just over three and a half years of “radical” market reforms Spain is now a lean, fit economic machine – according to the Financial Times.

Despite a few minor blemishes, such as a 22% official unemployment rate and 50% youth unemployment, the Spanish Premier Mariano Rajoy’s economic record is not only laudable, it’s one that the governments of other crisis-hit economies should follow:

The Rajoy government’s courageous economic reforms, helped by ECB action, have allowed Spain to defy the once widespread prediction that it would remain Europe’s economic laggard. Its turnaround is a lesson — and not just for Greece — that remaining in the Eurozone does not condemn a nation to economic failure.

The FT is not alone in this assessment. At yesterday’s joint press conference with Rajoy at the German chancellery, Angela Merkel said that even Germany, Europe’s industrial powerhouse and financial sugar daddy, had a thing or two to learn from the example set by Spain. Unsurprisingly, Merkel failed to go into any detail, but she did give Rajoy a ringing endorsement:

Spain’s path is moving forward, upward and many people will take that into account come election time.

Politics as Usual

As is the case with just about everything connected to Europe’s slowly unraveling economy, Merkel’s intervention, like the FT’s, was wholly politically motivated – something Merkel as good as acknowledged when she stated that Germany has a keen interest in ensuring that Spain’s “economic progress” continues.

Given that recent opinion polls suggest that no single party will gain sufficient votes in December’s elections to govern Spain single-handedly, as Rajoy’s People’s Party has done with ruthless efficiency for the last three and a half years, the German chancellor could end up being disappointed.

…click on the above link to read the rest of the article…

 

The Financial Times Calls for Ending Cash, Calls it a “Barbarous Relic”

August 28, 2015

The Financial Times Calls for Ending Cash, Calls it a “Barbarous Relic”

Screen Shot 2015-08-27 at 3.01.39 PM

Earlier this week, as the financial world was mesmerized by a min-stock market crash, the Financial Times published a dastardly little piece of fascist propaganda.

There is no more egregious anti-liberty economic policy imaginable than banning cash. I covered this earlier in the year in the post, Martin Armstrong Reports on a Secret Meeting in London to Ban Cash. Here’s an excerpt:

At this point, anyone paying even the slightest bit of attention to the central planning economic totalitarians running the fraudulent global financial system is aware of the blatant push in the media to acclimate the masses to accepting a “cashless society.”

In the mind of an economic tyrant, banning cash represents the holy grail. Forcing the plebs onto a system of digital fiat currency transactions offers total control via a seamless tracking of all transactions in the economy, and the ability to block payments if an uppity citizen dares get out of line.

While we’ve all seen the idiotic arguments for banning cash, i.e., it will allow central planners to more efficiently centrally plan economies into the ground, Martin Armstrong is reporting on a secret meeting in London with the aim of getting rid of any economic privacy that remains by ending cash.

Three months later,  the Financial Times publishes an article titled, The Case for Retiring Another “Barbarous Relic.”  When you start to see increased propaganda about banning cash, you know the status quo is very scared and things are getting very serious. You’ve been warned.

From the FT:

The fact that people treat cash as the go-to safe asset when banks are teetering is heavy with historical irony. Paper money was once the symbol of monetary irresponsibility. But even as individuals have taken recent crises as reasons to stock up on banknotes, authorities would do well to consider the arguments for phasing out their use as another “barbarous relic”, the moniker Keynes gave to gold. 

…click on the above link to read the rest of the article…

 

Greenspan Imagines Better, Alternate Universe in Which Greenspan Was Not Fed Chair

August 19, 2015

Greenspan Imagines Better, Alternate Universe in Which Greenspan Was Not Fed Chair

Alan Greenspan, the policy failure whose tenure at the Federal Reserve helped create the conditions for the largest financial crisis in nearly a century, was inexplicably given a major newspaper platform on Monday to opine about regulation, which he ideologically abhors.

So it came as a surprise to read the second paragraph of his Financial Timesop-ed, wishfully describing an alternative history of 2008, if only there had been robust regulation.

“What the 2008 crisis exposed was a fragile underpinning of a highly leveraged financial system,” Greenspan writes. “Had bank capital been adequate and fraud statutes been more vigorously enforced, the crisis would very likely have been a financial episode of only passing consequence.”

Greenspan must have temporarily forgotten that he had the power to accomplish both of these priorities as Fed chair.

Before the Consumer Financial Protection Bureau, the Fed had primary responsibility over consumer protection, including rule-writing, supervision, and prohibition of unfair and deceptive practices. They even were charged with resolving consumer complaints.

Greenspan famously did none of this during the inflating of the housing bubble from 2002 to 2006, instead extolling the virtues of adjustable-rate loans andmortgage securitization, even as fellow Fed governors and the FBI publicly warned about looming fraud. The responsibility for vigorously enforcing fraud statutes, then, fell to Greenspan, and he ignored it.

Greenspan also laments that Wall Street firms carried too much debt before the crisis, and not enough capital. More capital – in the form of stock or cash reserves – would have made sure banks, rather than taxpayers, covered their own losses. But Greenspan could have enacted this at the time, being the head of the most powerful financial regulatory agency from 1987 to 2006.

 

…click on the above link to read the rest of the article…

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