These people are insane

I’ve done a few pieces over at Forbes about shipping prices, Baltic Dry and so on. Zero Hedge is saying that world trade has stopped. I say that trade volume is slightly up, shipping supply is largely up, prices of shipping thus fall.

And I have people quoting things like this at me:

Maersk owns the world’s largest container shipping company and is seen as a bellwether for global trade, which it estimated grew just 0-1 per cent last year against double-digit growth before the financial crisis. It forecast an increase of 1-3 per cent this year, still below its post-crisis estimate of 4-5 per cent growth.

From the FT to prove that I am wrong and ZH and the catastrophists are right.

These people are insane, right?

33 thoughts on “These people are insane”

  1. I have a Russian friend on Facebook who was always posting ZH articles on how Russia was outmaneuvering the USA in some way or another, including how stipulating that the Chinese gas deal (which never got signed) was to be denominated in roubles and not dollars and this meant US hegemony was at an end. Funnily enough, I don’t see so many of these posts nowadays. And naturally, this Russian lived in Australia.

  2. So Much For Subtlety

    Tim Newman – “And naturally, this Russian lived in Australia.”

    She wouldn’t be of East Asian extraction by any chance?

    In other not-so-insane news, go out and google the comments of the Lufthansa chief Carsten Spohr about a Brexit. Someone has just reported that the context may have involved refreshments.

  3. She wouldn’t be of East Asian extraction by any chance?

    Nope. But certainly proved the rule, as if any further proof were necessary, that the most patriotic citizens of shitholes (such as Nigeria and Russia) are those who left years ago and have no intention of going back.

  4. While ZH is an alarmist lets not be rushing to start the “Happy Days are Here Again” chorus.

    The West consists of bankrupt states who are printing and bullshiting to keep going the millions who depend on handouts, The Japanese are into negative interest rates–stock markets have thrived cos stocks are a repository where people hope to keep the value of their wealth ahead of inflation etc. And so on –longer than I am willing to spend typing at any rate.

    The fact that shipping isn’t quite as bad as ZH says is a flimsy indicator. That shipping rates are down suggests over-capacity. And over-capacity suggests shippers had a much rosier view of their future trade volume than has transpired. Short of a zombie apocalypse it is unlikely that seaborne trade will ever stop entirely.

    But it is dubious to point to better than expected figures in one area and claim we thus aren’t in deep economic shit.

  5. Mr. Ecks

    Shippers always have a rosier view – they ordered too many ships pre 2006 and now are paying for it. Just as they did when they ordered too many ships in the 1970s. And it takes a long time for that excess to disappear.

  6. So let me get this straight. Despite the dramatic drop in oil prices leading to everyone in the industry curtailing capital investment Maersk is expecting a 1-3% increase in global trade this year. ZH is using this less than expect growth to claim global trade has stopped.

    This makes absolutely no sense to me. Trade is still up despite a major hit to the energy sector. I would actually argue that this is a good sign. The lower energy prices will lead to an increase in the average consumer’s discretionary funds. Once the lower fuel price is fully included in food future prices we will also see a dramatic drop in food prices leading to more available cash for discretionary funds. While some of these funds will be used to reduce debt a good portion will go to buying more tat.

    Why isn’t this news a sign that we should expect a large economic expansion in the next few years, as long as oil doesn’t suddenly sky rocket passed $60/barrel?

  7. Despite the dramatic drop in oil prices leading to everyone in the industry curtailing capital investment Maersk is expecting a 1-3% increase in global trade this year.

    Yes: price of oil goes down, costs of consumption go down, consumption goes up. Maersk are more in the cargo ship game than oil tanker game AFAIK.

  8. Most of the doom mongers are quite sane. They make their living by doom mongering.

    Just like your bestest friend, Ricardo Morphy. There is always a market for pessimism.

    I have been reading “Tyler Durden” and his apocalyptic outcries for years and “he” has been so consistently wrong that I sometimes consider carefully whether to do the opposite of what “he” raves about.

    As I write this the zerohedge site is down. perhaps the CIA, or the neoliberals or the stonecutters finally got all of the Durdens.

  9. It’s just one of the things that leads to a boom and bust cycle. People expect 100 of demand to come along in 5 years’ time, so 10 suppliers each decide they can get 20% of that market growth and build their capacity to match. So capacity goes up by 200, 100 of which sits around unused, and suppliers decide that maybe they should cut back on expanding their capacity for a while – leading to expectations of 100 of unsatisfied demand in 5 years’ time… 🙂

    What we need to fix this problem is a rigorously controlled global economy, where people know exactly what demand will be and can match supply to it precisely, with no timing or other errors… oh, wait

  10. Well far be it from me, but that quote wouldn’t be saying that global trade has “stopped”, merely that it has not grown significantly. Or far less than usual.

    I am highly suspicious of macro statistics that seem to show growth, because growth in the end is consumer goods and services, and there are these days loads of ways to create a growth in GDP stats without more goods and services being delivered to consumers, GDP being such a shitty massaged statistic and all that.

    I think in a realistic street level sense, we’re still in a recession, which is why people are still mooching around Aldi trying to pretend their shit is as good as what they used to buy before 2008. When you consider that the GDP figure contains government spunking away of money, and b2b services like banking, fuck knows what the real state of things is.

    But my Poundshop Index suggests we’re still in the crappy-doo.

  11. Ian B,

    Does your Poundshop index measure the number of shops on the high street that sell goods for less than Amazon’s minimum price to qualify for free delivery?

  12. Not really. I copied Murphy’s technique of just believing what I feel in my heart, and the result is I seem to be always right. So long as I’m not confronted with facts and stuff.

  13. “which is why people are still mooching around Aldi trying to pretend their shit is as good as what they used to buy before 2008”

    I shop in Aldi out of choice for the quality of the items I buy there, not price. The low price is a fortuitous bonus. Maybe I only buy items that are good at Aldi, and other stuff I don’t eat is rubbish, but I can’t fault the quality.

    Put it this way, a friend of mine owns her own restaurant and she shops at Lidl, or Waitrose or M&S for herself. She doesn’t buy shit. If its good enough for her palate its good enough for 99% of people.

  14. I don’t buy a lot at Aldi but what I do buy is good.

    Orange juice–not from concentrate–99p. Not bad at all.

  15. Since the stock-markets are taking a nose-dive , this means all those fabled ” rational economic men” in finance are, in fact, “insane” by TW’s logic.

  16. Like I said, we’ve become a nation of people persuading ourselves that the stuff we can afford is as good as the stuff we used to be able to afford. This is not indicative of an improving economy.

  17. Rational? I think you can make a reasonable argument that the “animal spirits” is the one thing Keynes got right.

  18. Bloke in North Dorset

    Its not just that there’s a load of new ships providing extra capacity its also that these ships are very very big. Around 400m long and 50m wide and capable of doing 22kt. They scare the bejeezus out of me when encounter them on a channel crossing.

    Re Aldi, all their shops are different. Dorchester has some great product lines that we can’t get in Weymouth, and the bread is excellent. Wife reckons she’s lopped 30% of our shopping bill and the produce is just as good if not better than Tesco. It doesn’t seem to last as long but as she cooks from scratch that’s not a problem.

  19. Anyone who is not shopping at Aldi, if they can, is a fool. Limited range, but high quality and very competitive prices.

  20. “Like I said, we’ve become a nation of people persuading ourselves that the stuff we can afford is as good as the stuff we used to be able to afford. This is not indicative of an improving economy.”

    Nonsense. Yet you churn out this shite. Surely proggie puritanism is to blame for the economy not producing the quality and quantity of the goods you desire…No?

  21. Ian B,

    Fifteen years ago I paid around £1500 for a desktop computer. Pretty good for the time: from memory (it’s fuzzy because I’d been upgrading and updating fairly frequently before that) a gigabyte of hard disk space, a Pentium processor running at 233 million operations a second, four megabytes of RAM, and a CRT monitor with a 1280 x 1024 resolution. It hooked up to the Interwebs on a dialup modem that could shuffle 56Kb of data a second on a good day.

    I’m typing this on a laptop that cost me about the same but has four thousand times the processing power, memory and hard disk space, twice the display resolution, and does Interwebbing at several hundred times the speed.

    In the background the TV is a 55-inch 4K resolution that costs less than I paid in 2008 for a 42″ HD flatscreen, that in turn was the same price as a 32″ “wide, flat” CRT monster in 2000 (still awesome watching “The Matrix” on it on DVD at the time, though), that cost only a little more than the 25″ ‘flatter, squarer tube’ set we bought in 1996ish.

    As far as cars go, as a student I kept a Haynes manual, a toolkit and a box of spares in the boot because I expected and got a minor breakdown every few months, I’ve changed a clutch slave cylinders in a car park so I could get home, I was used to a small commuter car getting thirty-odd MPG as normal: now, my ten-year-old sports car is considered a thirsty beast for getting twenty-eight or so (my wife’s car does over sixty MPG) and neither have broken down ever.

    There’s a lot of hidden quality that gets overloooked…

  22. @Ian B
    I was thinking of mentioning Keynes’ “animal spirits”.Saying that the people who direct the economy, apparently by guesswork, have the intelligence of animals is not reassuring either.

  23. PS
    Come to think of it ,they call themselves Bulls and Bears don’t they? And there is a fairly well known test of investment advice which measures the experts against” chimps with dart boards.”

  24. A decade or so ago only Gangster Rappers could afford 50 inch televisions – they cost about £20k. Now my granny has one. My granny has £20k of 2004 value for about £450 in 2016 – yet according to the miserabilists she’s poorer than she’s ever been. Because some other rich guy is currently paying 20k for something that will be available for 450 quid to the masses in about a decade – which is incredibly unfair.

  25. Reed: The very problem is that there are loads of cunts who think they are smart enough to “direct” the economy. Usually in the direction of socialist bullshit.

    Which is why we are in trouble.

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