Applying Dow Theory to the global economy. Per se, when the Transports tank, the DJIA will follow. The BDI has been a regular posting topic here, for years. It's plunge since August, has been dramatic.
bloomberg.com 
And now, a collapse in shipping rates points to new pressures on already stressed European AWA large U.S. international banks. My wag? This time is not different. Weakness in the financials will AGAIN lead a major stock market decline most likely between March and June, if not sooner:
zerohedge.com
<Shipping Rates Go... Negative
Following the endless collapse in the Baltic Dry, it was only a matter of time before the shipping industry one-upped the Chairsatan, and was the first to introduce, dum dum dum, negative rates. That's right: you are now paidto hire a ship. Via Bloomberg:
- GLENCORE HIRES SHIP AT MINUS $2,000 A DAY, GMI SAYS
- GMI TO CONTRIBUTE $2,000 A DAY TO GLENCORE'S FUEL COSTS
- GLOBAL MARITIME'S U.K. MD STEVE RODLEY CONFIRMS DEAL BY PHONE
Why is this happening? Perhaps because ships have to be kept seaworthy and in motion or else they become scrappage in as little time as 3 months. Think sharks. Needless to say, this will play havoc with shipping company (and affiliated entities') liquidity, as the biggest default wave in the history of the industry is about to be unleashed and tens if not hundreds of billions of European secured loans are about to be "impaired."> |
