As global stock markets "correct" -meaning drop- fresh commentary is emerging that participants in actual physical trade are not as optimistic as the formula-driven forecasters such as the ECRI. The L A Times has an article today worth reading, titled Shipping industry is in deep water, and here are some of the relevant parts:
"There has never been a decline like this before. We have never seen numbers like these," said Neil Dekker, editor of the Drewry report. "The container industry is looking at a $20-billion black hole of losses. We can expect a lot of casualties." . . .
The continuing global recession has run so deep that it has caused Moody's Investors Service to downgrade its outlook to negative overall for the 53 U.S. ports whose credit ratings it tracks. . .
The continued slump has dashed the hopes of many in the industry, who had come to believe that the recession had bottomed out and that a recovery was beginning.
"At this moment we can't see anything particularly positive around the corner," Dekker said. "We don't want to be overly negative. That is just the reality."
This continues the theme that Econblog Review has been propounding, which is that while traditional measures of economic recovery are positive, the downturn is so severe that as Dr. Roubini has been predicting for some time, it is very possible that a technical recovery will occur soon without enough vigor to feel like an expansion.
Debt is strangling the U. S. and much of the global economy. The Merchants of Debt have not lost their primacy, and until they do, many financial and economic risks remain to the downside.
EBR feels like a broken record but continues to emphasize that preservation of capital should be of paramount importance to most investors, with income secondary and trading profits tertiary.
Gold continues to act like an important safe haven but is not cheap.
Copyright (C) Long Lake LLC 2009