Ben Bernanke can bury his head in the sand and tell us that the recession is over all he wants. After all, that’s what he gets paid to do, and promoting the sort of propaganda which will mask what a miserable failure Obama’s economic policies have been and will continue to be is a lot of the reason why, despite how badly he’s helped to jack up the world economy, he was renominated to head the Fed. The MSM can run all the stories it wants about how a slight, statistical uptick in this, that, or the other economic indicator is really evidence for green shoots all over the place. Yet, reality has a way of reasserting itself, regardless of how badly the Left wants to believe that Obama has “saved” us from depression. And one way this is happening is with the ongoing saga of the ghost fleet of empty freighters idled off the coast of Singapore,
The tropical waters that lap the jungle shores of southern Malaysia could not be described as a paradisical shimmering turquoise. They are more of a dark, soupy green. They also carry a suspicious smell. Not that this is of any concern to the lone Indian face that has just peeped anxiously down at me from the rusting deck of a towering container ship; he is more disturbed by the fact that I may be a pirate, which, right now, on top of everything else, is the last thing he needs.
His appearance, in a peaked cap and uniform, seems rather odd; an officer without a crew. But there is something slightly odder about the vast distance between my jolly boat and his lofty position, which I can’t immediately put my finger on.
Then I have it – his 750ft-long merchant vessel is standing absurdly high in the water. The low waves don’t even bother the lowest mark on its Plimsoll line. It’s the same with all the ships parked here, and there are a lot of them. Close to 500. An armada of freighters with no cargo, no crew, and without a destination between them.
[snip]
Here, on a sleepy stretch of shoreline at the far end of Asia, is surely the biggest and most secretive gathering of ships in maritime history. Their numbers are equivalent to the entire British and American navies combined; their tonnage is far greater. Container ships, bulk carriers, oil tankers – all should be steaming fully laden between China, Britain, Europe and the US, stocking camera shops, PC Worlds and Argos depots ahead of the retail pandemonium of 2009. But their water has been stolen.
They are a powerful and tangible representation of the hurricanes that have been wrought by the global economic crisis; an iron curtain drawn along the coastline of the southern edge of Malaysia’s rural Johor state, 50 miles east of Singapore harbour.
[snip]
The Aframax-class oil tanker is the camel of the world’s high seas. By definition, it is smaller than 132,000 tons deadweight and with a breadth above 106ft. It is used in the basins of the Black Sea, the North Sea, the Caribbean Sea, the China Sea and the Mediterranean – or anywhere where non-OPEC exporting countries have harbours and canals too small to accommodate very large crude carriers (VLCC) or ultra-large crude carriers (ULCCs). The term is based on the Average Freight Rate Assessment (AFRA) tanker rate system and is an industry standard.
A couple of years ago these ships would be steaming back and forth. Now 12 per cent are doing nothing.
You may wish to know this because, if ever you had an irrational desire to charter one, now would be the time. This time last year, an Aframax tanker capable of carrying 80,000 tons of cargo would cost £31,000 a day ($50,000). Now it is about £3,400 ($5,500).
This, folks, means bad, bad news for the global economy. It means things aren’t getting better. When ships have nothing to carry, it’s because the stuff they’d carry isn’t being made. Simple as that. For the past year and a half, an increasing share of the world’s merchant fleets have been idled down, and as the article notes, you can barely give away space on one of these ships.
What’s worse is we have an economically illiterate Administration in Washington that is cynically trying to manipulate the economy in the short term to get the President’s poll numbers back up, but which is doing so much long-term damage that it will put true recovery off for years. Example: the “Cash for Clunkers” program. CfC did help to bring about a slight uptick in some economic indicators, since it artificially induced demand for automobiles, which had a trickle down effect and resulted in some slight increases in overall manufacturing output through subsidiary industries for last month. But consider this question – now that the government has front-loaded several months’ worth of demand into a single month, what do you think is going to happen in the months to come? The answer – no demand for automobiles, dealers going out of business, and more layoffs of workers from idle factories. And so on. The decision-making coming out of the Obama administration is atrocious.
The problem is that if the President of the nation which still has the single largest economy on the planet starts messing our economy up even worse (which he seems to be doing – stimulus has totally failed, his policies accelerated the rise in unemployment even beyond his own worst-case scenario, etc.), this will rock everybody else’s boat, which in turn comes back to rock ours even worse. Which means higher unemployment, more idle factories, more people going broke, more people defaulting on their mortgages, fewer people buying manufactured goods – rinse, lather, repeat. And we haven’t even gotten to the coming ARM adjustment mess which is going to explode in our faces beginning in early 2010, and which some economists predict will make the housing bubble burst look like a soap bubble popping. Nor have we really begun to see the effects of the commercial real estate bubble burst – though there’s rumblings that it may be beginning as well.
What it all means is that the ghost fleet will be getting bigger and bigger and bigger.
