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The stock market experienced it's worst week of 2006, what do you suppose Monday will bring when investors armed with this news return to Wall Street ?

GLOBAL CAPITAL: Shipping Industry Sees Signs of Slowing
By Ronald D. White, Times Staff Writer, June 10, 2006
Importers are benefiting from lower freight rates as trade growth cools down and capacity increases. [snip]

You may soon end up down right desperate for money given this report regarding the slowdown in global shipping. Note the `happy' spin. This article speculates it's not the sharp drop in demand but a `sudden' over abundance of container ships driving this drop in shipping rates...

"If their ships are full and their business expands, they want to raise the rates," Woo said. "I think the ships are not completely full, and the competition to fill them is fierce."[snip]

Woo's rate cut -- repeated in ports around the globe -- signals choppy waters for the shipping business. The industry had enjoyed five years of rising freight rates. Now, the world's largest shipping line is warning of lower earnings, and maritime experts say economic head winds could bring even more of a cool-down.

"The deluge hasn't hit yet, but we will see more and more vacant space on these ships," said Mark Page, director of research for Drewry Shipping Consultants of London.

Deluge? What deluge...what do container ships with vacant space on board tell us about the state of the economy? Is this `happy news' about lower shipping cost or a dire warning of things to come?

By some measurements, the blistering growth has already begun to lag.

In both 2003 and 2004, dubbed "the super cycle" by Drewry, worldwide trade grew by 14%. The growth rate slowed to 11.5% in 2005 and is expected to drop to less than 10% in 2006 and about 9% in 2007, Page said.

Piers Global Intelligence Solutions, a private data service that tracks imports and exports based on shipping documents, has predicted U.S. import growth of 9% this year and 7% in 2007 and U.S. export growth of 10% in 2006 and 9% in 2007.[snip]

So it isn't all good news. It seems both imports and exports are expected to `taper' off.

"Consumers will have less spendable income," said Guy Fox, a Yorba Linda shipping consultant. "They might take the SUV on a family vacation, but they won't buy the new high-definition television. People will put up with what they have, and that will have a domino effect on the whole economy."[snip]

Ah! The old `domino effect', (which is exactly the danger our economy faces.)  Retail is the second largest segment of our current economy. If retailers start folding up (closing unprofitable stores due to a lack of sales volume) the term `economic desert' will take on a whole new meaning.

Why is shipping volume dropping off?

Another factor that could slow shipping growth is that many U.S. and European manufacturers have already moved their manufacturing overseas, bringing a moderating in new outsourcing, said Page of Drewry Shipping Consultants.

Note the `qualifiers' in the above paragraph.  Factor that could my backside! This article continues to point to an `over capacity' in the container shipping industry as the primary reason for this sudden downturn in shipping revenue.

This factor in itself begs another subtle question. Is this the end result of there being nowhere left to invest? Trillions of dollars in capital market capacity with no place to go.

What do you invest in when 90 percent of the world's customer base is so cash strapped that they can barely afford essentials? Until there is something truly `new' under the sun there will be no way to `expand' the economy...and capitalism that fails to expand crushes society under it's insatiable appetite for interest on debt.

Desperation is a terrible thing, a factor that has driven military reenlistment to record levels during an extremely unpopular war. Will desperation push people into this?

Cash for kidneys
Legalizing incentives could encourage transplant donations, says a healthy donor.
By Virginia Postrel, VIRGINIA POSTREL is a contributing editor to the Atlantic and the author of "The Future and Its Enemies" and "The Substance of Style." Web site: www.dynamist.com.
June 10, 2006

WHEN Kaiser Permanente forced kidney patients to transfer from the UC Davis and UC San Francisco transplant centers to its own fledgling program, it shortened their lives -- and created a scandal.

But the Kaiser story represents much more than a single health maintenance organization's bad decisions. It reveals a fundamentally broken transplant system, a system that spends its time coping with an ever-growing, life-threatening organ shortage rather than finding ways to reduce or end it.

More than 66,000 Americans are languishing on the national waiting list for kidneys -- 10 times the number of kidneys transplanted from deceased donors each year. And the list keeps growing, with a queue of more than 100,000 expected by 2010.

Kidney patients literally live or die by where they are on the waiting list. While getting progressively sicker, they must spend several hours at least three times a week hooked up to a dialysis machine, the kidney-disease equivalent of an iron lung (it prolongs your life but imposes a physically debilitating prison sentence).

Increasing the supply of deceased donors, while desirable, is difficult -- organ donors have to die healthy and in exactly the right circumstances. But even if every eligible cadaver were harvested, it wouldn't fill the gap. We need more kidney donors, lots more. And they need to be alive.

Need some quick bucks? Here's the answer...and you'll be doing a good deed while you're at it!

Then there is the other side of this rock, the offer of quick cash for healthy organs...for those who can afford to pay.

If you can't afford to buy what you need this proposal doesn't help you one wit.

Ironically the author of this piece states that she donated a kidney (gratis) to a friend in need...which makes this piece that much more troubling.

Have we really sunk so far that we won't help one another without a financial incentive?

That said, I think it's prudent to mention that there has long been a thriving black market for healthy organs, an unsavory situation such a proposal would feed.

Creating a cash market for healthy organs acts as a disincentive to those inclined to donate them for free. Why give away a `commodity' worth a ton of money to people who desperately need what you have to offer?

The author of this piece `laments' that even discussing this `sensible' option is taboo...for very good reason as it serves to `commodify' human life...how safe would you feel walking down the street knowing you're worth more in body parts than your car is?

If this is where `everything has a price' capitalism is leading our society I say it's time we sweep it all away. I'm not raising children to become some one else's spare parts depot.

Thanks for letting me inside your head,

Gegner

Originally posted to Gegner on Sat Jun 10, 2006 at 01:28 PM PDT.

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Comment Preferences

  •  Tip Jar (8+ / 0-)

    for those so inclined...I know I'm Mr. Excuse Shirt but my daughter is at her first Brownie sleepover and my wife doesn't want me online in case we need to 'rescue' her...I'm be back later on.

    Parties divide, movements unite.

    by Gegner on Sat Jun 10, 2006 at 01:23:21 PM PDT

  •  This could be the basis of a national... (2+ / 0-)
    Recommended by:
    Gegner, bigchin

    ..universal health care system.. All of our boies become "stores of wealth" much like our homes are on the real estate market.  

    There would be incentives to stay as healthy as possible in order to protect your investment, and premiums for those with the most desirable genetic profiles.

    This is either a perfectly logical extension of our current worship of the market, or proof that making "what the market will  bear" the be-all, end-all of all questions of societal value absurd and moot.

    "Reality has a well-known liberal bias" -Stephen Colbert (-6.38/ -4.21)

    by wonkydonkey on Sat Jun 10, 2006 at 01:46:24 PM PDT

  •  correct me if I am wrong (0+ / 0-)

    but isn't it illegal to sell organs ? Also isn't there also a blackmarket that trades in them ? Of I may have watched too many Law and Order programs, but most of the third world would rush to sell organs just to feed thier family making their lives cheaper in the long and ours.

    -8.63 -7.28 He was carrying a skateboard on his back, a red rose in his fist, and the war.

    by OneCrankyDom on Sat Jun 10, 2006 at 01:54:24 PM PDT

    •  In the third world they sell their entire person. (1+ / 0-)
      Recommended by:
      Gegner

      "...history is a tragedy not a melodrama" - I.F. Stone

      by bigchin on Sat Jun 10, 2006 at 02:07:49 PM PDT

      [ Parent ]

    •  You are correct sir. (0+ / 0-)

      It is currently against the law to sell your 'spare' organs although this can be skirted by 'donating' them in exchange for a deposit into a numbered account somewhere.

      Imagine the legal nightmares involved in permitting this sort of extremely risky behavior.

      It wouldn't take long for the courts to be overwhelmed with malpractice and wrongful death suits as the shifty people providing these services find it more profitable to have you die on the table, harvest all of your organs and pay your estate for the one organ you 'agreed' to have removed.

      Suppose they don't kill you. What can you do if they take both of your kidneys?

      Take 'em to court? What if they take a kidney, a lung and an eye? You're out like a light. You won't know anything until you wake up and by then 'your' organs are already on their way to the recipient.

      Lastly, junkies may no longer be saisfied taking just your stereo and big screen tv if they know they'll make a much bigger score by waiting for you to come home...

      Parties divide, movements unite.

      by Gegner on Sat Jun 10, 2006 at 08:38:26 PM PDT

      [ Parent ]

  •  Fine diary, Gegner. Doesn't W. Buffet (2+ / 0-)
    Recommended by:
    3card, Gegner

    use "shipping" and all it implies as a leading economic indicator?   I think I heard him comment on it once.  I may be wrong.

    The point about nowhere to invest is especially poignant.  For the investor class, investing in people is, of course, not investing at all but an expense... so forget about social welfare... indeed, as you point out, the people's debt will be where capital will find its next profit:

    "capitalism that fails to expand crushes society under it's insatiable appetite for interest on debt."

    When capitalism fails (again) it will be afforded a bailout (again) and it will be paid for by the middle and working classes.  

    I remember the S&L crisis...  now let's just look at who got rich off of that little transfer of wealth rip-off.  Hmmmm...

    "...history is a tragedy not a melodrama" - I.F. Stone

    by bigchin on Sat Jun 10, 2006 at 02:06:47 PM PDT

    •  yes, he does (3+ / 0-)
      Recommended by:
      3card, Gegner, bigchin

      it is a rough but relatively stable indicator.

    •  I'm uncertain this is possible (1+ / 0-)
      Recommended by:
      bigchin

      as a bailout would flood the economy with even more money that is backed by nothing...a sure recipe to turn our current tepid stagflation into a raging inferno.

      More money chasing fewer goods at a time when we can't sustain imports will lead to the lower classes being rapidly priced out of the market.

      Helicopter Ben make think flooding the economy with cash will save us from a depression but the engines of commerce can raise prices faster than he can print money.

      If commerce were to double our salary while raising prices only fifty percent, you'd be making double but paying fifty percent more for commodities you can't do without (assuming housing remains fixed)...would still result in a net loss.

      Parties divide, movements unite.

      by Gegner on Sat Jun 10, 2006 at 08:23:17 PM PDT

      [ Parent ]

  •  re. Shipping (2+ / 0-)
    Recommended by:
    Halcyon, Gegner
    A captain I sailed with a few years ago (on ocean tugs) was a retired pilot from the Panama Canal Co., and told me he could generally tell when economic slowdowns were comming by watching whether the majority of ships were less than fully loaded.

    Seems as good an indicator as any, and probably better than most.

    Not surprisingly a lot of investors and Wall Street folks keep a pretty close eye on shipping stats, but you don't have to be an insider to keep an eye on shipping anymore.  There are lots of live webcams at ports and waterways all over the world these days, including the Miliflores Locks.  

    An index of several of these can be found on this site.

    If you scroll down a little on this excellent site you can also find lots of links to hilarious pics and stories of transportation 'mishaps' from around the world.  It's sort of like the Darwin Awards of the transportation industry.

    Who says lawyers don't have a sense of humor?

    A personal speculation:  I don't think the shock of rapidly rising fuel costs is fully realized yet in it's effect on the US economy in particuar.  It is a major factor affecting shipping costs and also drives down demand for consumer goods.  Not a pretty prospect, short to medium term, in an economy so dependent on consumer spending.

    Photobucket - Video and Image Hosting

    This was taken in Dec. on a canal transit.  This and most of the other container ships I saw then were pretty well loaded.

    FWIW.
     

    "Good idea Chuck, but Syrup won't stop 'em." Firesign Theater, Everything You Know is Wrong.

    by 3card on Sat Jun 10, 2006 at 03:20:02 PM PDT

    •  I agree with your assessment (1+ / 0-)
      Recommended by:
      3card

      and believe the slow down in shipping is indicative of the dual action/impact of rising energy costs.

      The increase in the cost of doing business along with the increased costs to workers to live and keep reporting to work on their own dime could easily reach the breaking point very quickly.

      With less disposable income, orders for non-necessities are falling. Humans need very little to stay alive...which points to the foolishness of creating an economy based on unsustainable consumption.

      Since 70% of our current economy is based on consumer spending the drop in disposable income forecasts serious economic trouble ahead.

      Parties divide, movements unite.

      by Gegner on Sat Jun 10, 2006 at 08:08:19 PM PDT

      [ Parent ]

  •  But better for the environment? (0+ / 0-)
    Is there no up-side?
    •  Perhaps in the long haul (0+ / 0-)

      but the short term effects of economic collapse promise to be environmentally devastating as human 'locusts' will burn, eat or bust whatever is in their path.

      If the supply lines break down people will make due with whatever's on hand until either service is restored...or no longer necessary.

      Parties divide, movements unite.

      by Gegner on Sat Jun 10, 2006 at 07:57:54 PM PDT

      [ Parent ]

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