Canaries were carried into coal mines by miners for many years. Being far more susceptible to coal gas than humans, the birds would die quickly if the gas seeped into the workings, thereby alerting the miners to get out before they were overcome themselves. The expression “a canary in a coal mine” has come to mean something that indicates serious problems ahead.
Orders for industrial plant and machinery have long had that status as far as the general economy is concerned. Shipbuilding is a harbinger of the health of world trade. Ships wear out, and must be replaced; and, in times of economic growth, more ships are needed to expand the world’s merchant fleet, to carry more goods. Therefore, the latest news on shipping orders is not good.
Pre-COVID, the bull case for shipping rates was all about plunging newbuild orders. A drop in orders in 2019 pointed to rising freight rates in 2021, given the lag between contract signing and delivery.
Mid-COVID, the bull case for rates is even more about plunging newbuild orders than before. There will be a lot fewer vessels on the water in 2021, 2022 and beyond than previously thought.
New data provided to FreightWaves by U.K.-based VesselsValue confirms that 2020 is shaping up to be an exceptionally weak year for tanker, bulker and container-ship orders.
New data from Alphaliner shows that container-ship newbuild capacity is down to just 9.4% of capacity on the water. “For the first time in more than 20 years, the global newbuilding pipeline fell below the 10% threshold,” reported Alphaliner on Wednesday, calling it a “historic low.”
According to VesselsValue, the tanker orderbook has fallen to 9% of the operating fleet in terms of capacity (measured in deadweight tons or DWT) as of July. This is down sharply from a high of 23% in January 2016.
The dry bulk orderbook is only 7% of the on-the-water fleet. This is down from 24% in January 2015 and an even higher peak — 27% — in January 2010.
There’s more at the link.
Shipping is the backbone of trade around the world. About 90% of it is transported by sea. Therefore, if those carrying it are not replacing ships as often as they should, and are not expanding their fleets but rather contracting them by idling existing vessels, it’s a very serious warning sign that the world’s economy is still slowing down.
As for the US economy, John Wilder points out:
“Collapse” is a word that gets overused by the news media … In this case, however, the use of the term “collapse” is entirely appropriate when 32.9% of the economy disappears. And that dismal number is after an unprecedented borrowing and spending. The US had a GDP of about $20 trillion in 2018. This year, so far, there has been about $5 trillion in extra spending and balance sheet expansion.
So, $10 trillion in half a year, reduced by the 32.9% lowering in GDP takes us to $7 trillion or so. That’s how big they’re saying the economy is. That’s bad. But if you subtract out the $2 trillion in “stimulus” funds that takes you down to $5 trillion.
Borrow a million dollars, and the bank owns you. Borrow a billion dollars, and you own the bank. Borrow $26.6 trillion dollars? You are the United States.
Even if NONE of the Federal Reserve’s balance sheet where they sprinkled money into the stock market got added to the GDP figure, we’re talking a 50% reduction in the economy in real terms.
The economy isn’t an economy at this point – it’s a smoking crater. Well, it would be a smoking crater if there was enough money to pay for the smoke.
Again, more at the link.
This is going to translate to a direct impact on what we, as consumers, can expect to see on supermarket shelves. Many have already noted a smaller selection of goods, compared to what used to be in stock. I’m hearing that most Christmas shopping season orders, which should by now be in or near this country prior to distribution, have not yet showed up. That may be due to slowdowns in overseas manufacturing, or a shortage of ships to deliver them . . . but it could also be (and I think it is) due to stores in the USA not ordering as much as they usually do for the festive season, and slowing the pace of deliveries, to conserve their cash flow. Either way, it’s not healthy.
Friends, given the disruptions we expect (thanks to Antifa, BLM, and who knows what other extremist groups) as the November elections draw nearer, and given the warning signs (including rapidly rising food prices) that world trade and the US economy are not in a healthy state, we need to be on our guard. We spoke yesterday about the need to re-evaluate our emergency preparations. This news is yet another indicator of how important that’s becoming, for anyone who has eyes to see and ears to hear.
The warning signs are flashing orange. Don’t wait until they turn to red to prepare yourselves. We can’t necessarily stockpile enough to insulate ourselves completely from what’s coming; but we can buttress our foundations, to ensure that even in very hard times, we can at least survive, even if we don’t thrive.
- Pay off debt if at all possible, and build up what financial reserves you can in cash, even if they’re small.
- Stockpile at least 30 days of essential supplies; food, household consumables, etc. Longer would be better. It doesn’t have to be luxurious. Rice and beans may be boring, but you can live on them if you have to – and they’re still available, and cheap! Neither may be the case in future.
- Build up an emergency reserve of critical items such as essential medications. I’d say plan on at least 90 days’ supply. If necessary, ask your health care provider to give you an extra prescription for them, and pay cash for it if your insurance won’t cover it – that’s what I did.
- Have your vehicle(s) in good working order, with tires, belts, hoses, etc. in good condition. Put aside spares of essential parts, and of lubrication oil, transmission and brake fluids, etc. Try to store at least one tank of fuel per vehicle in approved containers, in case of shortages or other emergency (but don’t store it in your residence! Keep flammable stocks away from people, in a garden shed or something like that.)
- Have alternate means of cooking food, washing clothes, etc.
I’ve written about such things before. Follow that link and read the archived articles for yourself. If guns aren’t your thing, ignore those articles, and skip through to those dealing with general preparations.
I believe time is growing short. Let’s not waste what we have of it.
If you can have farm animals, get them. Chickens first. They don't need fancy feed. Investment in a small feed grinder and a couple of supersacks of barley and peas will go a long way to ensuring you have eggs and meat. I'd say start a garden to gain experience, but its too late for that. Plan for next year and get the equipment now.
While grocery shopping yesterday, I was musing over the idea that I bet the store chain is making better profits than usual.
BC (Before Covid) there wasn't a week we went there that things we regularly buy were "buy one, get one free" or buy two get two, things like that. If we needed it but it wasn't on sale, we'd wait a week or two and stock up when it was BOGO. Now, most of things we buy are full price, which is more expensive than BC and limited to two per customer per day.
TP has been back for a while, but the Lysol wipes for cleaning the stove haven't been seen since early March.
Some of that is being artificially suppressed by the Democrats to damage the president. Keeping children out of school keeps parents from working. Keeping business closed keeps people from working.
I do understand that you have some severe health concerns, BRM, but the nation needs to allow the able bodied to work and to get the economy moving. If they catch the Plague, they're functionally immune until it mutates, and it's a cold or the flu in severity. Those at risk need to take precautions to defend themselves – and they can decide whether or not a vaccine is for them.
The economy would come roaring back if the government would allow it.
The issue with China is something altogether different. A discussion for a different day.
30 days of food and 90 days of meds etc, is not at all sufficient. That wasn't enough for people to self isolate during the beerflu.
You should have at least 10 times that amount.
@Ned2: It's all very well to say that, but not all of us can afford such stockpiles, or have space to store them. If you can, good for you. Those of us who can't will have to do the best we can.
32.9% is an annualized change in the rate. It's not that the economy shrunk by 32.9%. The economy shrunk only by about 10%. 32.9% is what would happen by December if we had a 2nd lockdown twice as bad as the first, and then a 3rd lockdown three times as bad. https://www.nytimes.com/2020/07/29/business/economy/us-gdp-report.html
It's still bad, mind you, but nowhere near half of the economy.
"Survival overides programming."
After a while the people will stop heeding the screaming fauci's and go on about
living their lives. Once the fearful are acclimated to the chicken little rants
and seeing alternate information sources that clearly disprove the lies, their
game will be over.
Simply: Do what you can. I can't do it all (dagnabbit!) but I can pick up an extra bit of this or that on a shopping trip. I did pick up a camp stove and a few bottles of fuel for it. Will it be enough? Don't know. Will it beat nothing? HELL YEAH!
And take a look at "Intermittent Fasting" even if you do NOT need to drop weight. It's *BETTER* to _decide_ to eat *nothing* for a while than to eat not-enough for that same time. It sounds crazy, but isn't. There was a study (done in MN, during WWII) about such. Fed but undernourished was HELL. Simply 'Not Eating' is, perhaps surprisingly, *easier*. This is a case of Nothing being better than Almost. Of course, you can't do that forever.
Expat living in Hong Kong here.
We have not had a single day of badly polluted air for *months*. The Factory of the World sits just across the (rapidly becoming meaningless) border, so this is abnormal. Prevailing wind conditions this time of year help with the air quality situation, but even on still days when tropical depressions are in the offing, the air pollution has not risen noticeably.
The Chinese Economy is in a deep hole and no amount of official lying statistics will convince me otherwise. Some of that due to reduced export orders and much due to their own internal problems — massive capital misallocation, shonky credit system, and so on.
As for shipping, have been seeing more fully-stacked container ships going in and out of the Hong Kong Container Port area now than several months back, but certainly don’t get the feeling that the joint is jumping. Some of the shipping activity around here was probably because the criminally stupid Hong Kong Puppet Regime permitted Hong Kong to be used for shipping crew changes — not permitted in Singapore or in China Proper. This seems to have caused a second wave virus outbreak here (ships generally crewed by Bangladeshis, Filipinos — virus running rampant in Third World) so will be interesting to see if visible shipping volume declines again now.
Out here, my biggest worry is Pooh starting a shooting war over the South China Sea and/or Taiwan. Corona-chan has done wonders for anyone who enjoys outdoor exerciser in clean air.
Re Intermittent Fasting:
Bingo. The man has it right. Just about everyone would be doing themselves a big favor by getting into nutritional ketosis and doing some intermittent fasting from time to time.
It’s far easer to go without food when keto-adapted (takes several weeks) and you will have much better physical and mental energy in this state than if you are half-starved on a carbohydrate diet.
But it takes the full on approach to get it right. No vegetable seed oils, no artificial sweeteners, no carbs… want to be living on meat and animal fat. Some can handle full fat fermented dairy on this… others cannot. All other fake dairy must be avoided.
Additionally will require changing one’s thoughts about salt. Need lots of it once get off unhealthy modern diet.
Ketogenic diets are also so powerfully effective that it’s possible to inadvertently off yerself if blindly continue to take all one’s chronic effed up middle or old age medications… requires intelligent open-minded physician’s initial oversight + one has to be intelligent enough to do one’s own research and figure stuff out.
Does it work? Well how did the Mongols conquer the world on a diet of horse flesh, fermented mares’s milk, and horse blood?
Why the blood? Can’t live without salt on a proper diet (ask any lion).