Tuesday, April 17, 2012
Monday, April 16, 2012
Summer of Economic, Social and Political Discontent brewing across the world
Blogman's Notes:
According to excellent researcher and Financial Analyst Graham Summers of Phoenix Capital Research, we are 6-8 weeks away from another Financial Crisis that will make 2008 look the post-war Boom. It is coming, the only question is how soon.
_____________________________________________________________From: Phoenix Capital Research
April 16, 2012 By
Sunday, April 15, 2012
Earthquake activity intensifying across the planet - is the earth cracking up?
Luke 21:11 And great earthquakes shall be in divers places, and famines, and pestilences; and fearful sights and great signs shall there be from heaven.
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From BeforeIt'sNews.com
A leading geologist from Romania says something is seriously wrong. I can't disagree with the guy, have you seen the weather lately? By latey I mean the last year and a half. We live in interesting times, and thats not a good thing, its a chinese curse.
-Mort
A leading earthquake scientist has warned that the planet could be cracking up after a series of massive quakes in just 48 hours.
Expert Gheorghe Marmureanu - from Romania's National Institute of Earth Physics - says 39 quakes had hit the globe within two days.
The series started with two massive quakes in Indonesia measuring 8.6 and 8.2 on the Richter scale rapidly followed by three more only slightly smaller in Mexico within hours.
"There is no doubt that something is seriously wrong. There have been too many strong earthquakes," said Marmureanu.
He added: "The quakes are a surprise that cannot be easily explained by current scientific knowledge. With the Indonesian quake for example, statistically, there should be one big earthquake in this part of Asia every 500 years. However, since 2004, there were already three quakes with a magnitude of over 8, which is not normal.
Expert Gheorghe Marmureanu - from Romania's National Institute of Earth Physics - says 39 quakes had hit the globe within two days.
The series started with two massive quakes in Indonesia measuring 8.6 and 8.2 on the Richter scale rapidly followed by three more only slightly smaller in Mexico within hours.
"There is no doubt that something is seriously wrong. There have been too many strong earthquakes," said Marmureanu.
He added: "The quakes are a surprise that cannot be easily explained by current scientific knowledge. With the Indonesian quake for example, statistically, there should be one big earthquake in this part of Asia every 500 years. However, since 2004, there were already three quakes with a magnitude of over 8, which is not normal.
India - Pakistan war brewing over water rights?
Blogman's Notes:
The most valuable resource on the Earth is water and wars have been fought over water throughout history. History may soon repeat itself with Pakistan getting increasingly frustrated over what it perceives to be a threat to its very existence - Water! Most of the rivers that bring fresh water to Pakistan flow through India and Pakistan is accusing India of excessive Dam building activities that will cut off or greatly reduce its supply of fresh water. Wars are fought over reasons far more frivolous than a serious matter like the supply of a nation's water. The tragedy is that both these nations are nuclear powers and even a minor skirmish is always in danger of becoming a mushroom cloud!
____________________________________________________________The most valuable resource on the Earth is water and wars have been fought over water throughout history. History may soon repeat itself with Pakistan getting increasingly frustrated over what it perceives to be a threat to its very existence - Water! Most of the rivers that bring fresh water to Pakistan flow through India and Pakistan is accusing India of excessive Dam building activities that will cut off or greatly reduce its supply of fresh water. Wars are fought over reasons far more frivolous than a serious matter like the supply of a nation's water. The tragedy is that both these nations are nuclear powers and even a minor skirmish is always in danger of becoming a mushroom cloud!
From ZeroHedge.com
Submitted by John C.K. Daly of OilPrice.com
A peaceful and stable Pakistan is integral to western efforts to pacify Afghanistan, but Islamabad’s obsessions with its giant eastern neighbor may render such issues moot.
Since partition in 1947, Pakistan and India have fought four armed conflicts, in 1947, 1965, 1971 (which led to the establishment of Bangladesh, formerly East Pakistan) and the 1999 Kargil clash.
With the exception of the 1971 conflict, which involved rising tensions in East Pakistan, the others have all involved issues arising from control of Kashmir.
But now a rising new element of discord threatens to precipitate a new armed clash between southern Asia’s two nuclear powers – water.
Lahore’s “The Nation’ newspaper on Sunday published an editorial entitled, “War with India inevitable: Nizami,” the newspaper’s Editor-in-Chief and Nazaria-i-Pakistan Trust Chairman, Majid Nizami, asked his fellow citizens to prepare for a war with India over water issues. Nizami told those attending the “Pakistan-India relations; Our rulers- new wishes” session at Aiwan-e-Karkunan Tehrik-e-Pakistan, which he chaired, “Indian hostilities and conspiracies against the country will never end until she is taught a lesson.”
While The Nation is a conservative daily, part of the Nawa-i-Waqt publishing group, with a circulation of roughly 20,000, it has a website, and what’s more, close ties to Pakistan’s highest military circles, so Nizami’s comments should hardly be rejected out of hand.
Furthermore, Niazmi’s audience included some high ranking Pakistani officials, including Nazaria-i-Pakistan Vice Chairman Dr Rafique Ahmed; Pakistan Movement Workers-Trust Chairman, retired Colonel Jamshed Ahmed Tareen; former Foreign Secretary Shamshad Ahmed Khan; Jamiat Ulema-e-Pakistan Secretary General Qari Zawar Bahadur; retired Air Marshall Khurished Anwar Mirza; retired Brigadier Hamid Saeed Akhtar and Jamaat-e-Islami Lahore Chief Ameer-ul-Azeem, among others.
At issue are Pakistan’s concerns over India’s ongoing construction of two hydroelectric dams on the upper reaches of the Indus River. Islamabad is concerned that the 45 megawatt, 190-foot tall Nimoo-Bazgo concrete dam 44 megawatt Chutak hydroelectric power project will reduce the Indus River’s flow towards Pakistan, as they are capable of storing up to 4.23 billion cubic feet of water, violating the terms of the bilateral 1960 Indus Water Treaty. The Indus, which begins in Indian-controlled Kashmir, is crucial to both India and Pakistan, but is currently experiencing water flows down 30 percent from its normal levels. The Indus is Pakistan's primary freshwater source, on which 90 percent of its agriculture depends. According to a number of Pakistani agriculture and water experts, the nation is heading towards a massive water shortage in the next couple of years due to insufficient water management practices and storage capacity, which will be exacerbated by the twin Indian hydroelectric projects, as they will further diminish the Indus’ flow.
With the exception of the 1971 conflict, which involved rising tensions in East Pakistan, the others have all involved issues arising from control of Kashmir.
But now a rising new element of discord threatens to precipitate a new armed clash between southern Asia’s two nuclear powers – water.
Lahore’s “The Nation’ newspaper on Sunday published an editorial entitled, “War with India inevitable: Nizami,” the newspaper’s Editor-in-Chief and Nazaria-i-Pakistan Trust Chairman, Majid Nizami, asked his fellow citizens to prepare for a war with India over water issues. Nizami told those attending the “Pakistan-India relations; Our rulers- new wishes” session at Aiwan-e-Karkunan Tehrik-e-Pakistan, which he chaired, “Indian hostilities and conspiracies against the country will never end until she is taught a lesson.”
While The Nation is a conservative daily, part of the Nawa-i-Waqt publishing group, with a circulation of roughly 20,000, it has a website, and what’s more, close ties to Pakistan’s highest military circles, so Nizami’s comments should hardly be rejected out of hand.
Furthermore, Niazmi’s audience included some high ranking Pakistani officials, including Nazaria-i-Pakistan Vice Chairman Dr Rafique Ahmed; Pakistan Movement Workers-Trust Chairman, retired Colonel Jamshed Ahmed Tareen; former Foreign Secretary Shamshad Ahmed Khan; Jamiat Ulema-e-Pakistan Secretary General Qari Zawar Bahadur; retired Air Marshall Khurished Anwar Mirza; retired Brigadier Hamid Saeed Akhtar and Jamaat-e-Islami Lahore Chief Ameer-ul-Azeem, among others.
At issue are Pakistan’s concerns over India’s ongoing construction of two hydroelectric dams on the upper reaches of the Indus River. Islamabad is concerned that the 45 megawatt, 190-foot tall Nimoo-Bazgo concrete dam 44 megawatt Chutak hydroelectric power project will reduce the Indus River’s flow towards Pakistan, as they are capable of storing up to 4.23 billion cubic feet of water, violating the terms of the bilateral 1960 Indus Water Treaty. The Indus, which begins in Indian-controlled Kashmir, is crucial to both India and Pakistan, but is currently experiencing water flows down 30 percent from its normal levels. The Indus is Pakistan's primary freshwater source, on which 90 percent of its agriculture depends. According to a number of Pakistani agriculture and water experts, the nation is heading towards a massive water shortage in the next couple of years due to insufficient water management practices and storage capacity, which will be exacerbated by the twin Indian hydroelectric projects, as they will further diminish the Indus’ flow.
One Debt Enslaved Generation not enough - UK seeks to enslave generations!
It boggles the mind but the cost of war in monetary terms is borne by the public over generations. The cost of the First World War that ended in 1918 is still being paid today by guess who? Joe Public who else!
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From Russia Today:
Britain's got big bills to pay, but is looking to a century-old solution when times were even tougher. Never-ending loans to cover the cost of the First World War are still being repaid today, but the Treasury Chief is planning more. And that means a financial headache for tomorrow's children, as Ivor Bennett reports.
RT on Twitter: http://twitter.com/RT_com
RT on Facebook: http://www.facebook.com/RTnews
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From Russia Today:
Britain's got big bills to pay, but is looking to a century-old solution when times were even tougher. Never-ending loans to cover the cost of the First World War are still being repaid today, but the Treasury Chief is planning more. And that means a financial headache for tomorrow's children, as Ivor Bennett reports.
RT on Facebook: http://www.facebook.com/RTnews
Saturday, April 14, 2012
QE (Quantitative Easing) to Infinity and Beyond
Blogman's Notes:
The Federal Reserve of the United States and The European Central Bank plus the Central banks of Japan, and the G-7 are all in a quandary. The only method available to them to delay (not prevent) the inevitable Global Economic Collapse is to print, print, and print some till worldwide high inflation and possible hyperinflation in many regions will end their madness. Madmen run the world, that is the lesson of history, and since for the very first time since the days of Nimrod over 4000 years ago has there arisen the possibility of forming a true Global government, the madness of the megalomaniacs that are running the world today is truly on a scale greater than that of the Caesars of Rome. While the slumbering masses may believe there is a wonderful Economic Recovery in progress, the truth is the exact opposite. What is coming is a collapse that will make the fall of Rome look like a day at Disneyland. One day without warning the very same dollars and euros and yens that the bankers keep printing like it was Monopoly money will prove to be exactly that, Monopoly money; worth a lot less than what it is today or even completely worthless.
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On the heels of the Fed members commenting publicly, legendary trader and investor, Jim Sinclair, told King World News that even though we have already seen $17 trillion of money printing, we should expect another $17 trillion going forward. KWN also asked Sinclair how he knew, from the beginning, that there would be ‘QE to infinity,’ before anyone else. But first, here is what Sinclair had to say about the action in gold: “$1,650 is a comfortable number (for central planners). Haven’t you seen the tremendous jawboning and market intervention to hold gold in that range at $1,650? $1,764 and they lose control. That begins the move which is exponential.”
Jim Sinclair continues:“It’s a formidable challenge (keeping gold below $1,800). The true range of gold is $1,700 to $2,111, but these guys are going to try to fight it like nobody’s business. Do you think for a moment they are not listening to you and I speaking right now? Forget it, Eric, we are the morning ‘Squawk Box’ tomorrow.Now comes the payback. The hope and desire that things would improve is ignorant because of the fact that the trillions which have come in have been to save the financial organizations, not Main Street....
Friday, April 13, 2012
Groundhog Day Economy - Déjà vu all over again!
Blogman's Notes:
The following comments are from William C. Dudley, President of the New York Federal Reserve Bank; one of the most powerful bankers in the world. Perhaps Mr. Dudley should consider that what the Fed and other Central banks are engaged in is Counterfeiting which can ultimately only destroy the Economy not lead to a robust Recovery!
The following comments are from William C. Dudley, President of the New York Federal Reserve Bank; one of the most powerful bankers in the world. Perhaps Mr. Dudley should consider that what the Fed and other Central banks are engaged in is Counterfeiting which can ultimately only destroy the Economy not lead to a robust Recovery!
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From ZeroHedge.com
From the first day of 2012 we predicted, and have done so until we were blue in the face, that 2012 would be a carbon copy of 2011... and thus 2010. Unfortunately when setting the screenplay, the central planners of the world really don't have that much imagination and recycling scripts is the best they can do. And while this forecast will not be glaringly obvious until the debt ceiling fiasco is repeated at almost the same time in 2012 as it was in 2011, we are happy that more and more people are starting to, as quite often happens, see things our way. We present David Rosenberg who summarizes why 2012 is Déjà vu 2011 all over again.From Gluskin Sheff
DEJA VU
It is incredible how things are playing out so similarly to this time last year. We closed the books on 2010 at 1,257 on the S&P 500, then hit an interim high of 1,343 on February 18th of 2011 and then corrected to 1,256 on March 16th. We later had a nice bounce off that low to 1,363 on April 29th (a higher high). Who knew then that by October 3rd, the index would roll all the way back to 1,099 and was in dire need yet again for more central bank intervention?
This time around, the S&P 500 kicked off the year at 1,257 to hit an interim high of 1,374 on March 1st. We then corrected down to 1,343 as of March 6th and then rallied our way back to 1,419 on April 2nd (again, a higher high). Only time will tell if the 1,419 close on April 2nd proves to be the peak for the year as the 1,363 high as back on April 29th of last year.
In fact, the exact same pattern occurred in 2010. Out of the gates, the S&P 500 shot up from 1,115 to a brief peak of 1,150 by January 19th. After a brief correction (as we had in early March of this year) to 1,056 by February 8th, the market soared to 1,217 by April 23rd — literally, a straight line up —just as we saw happening two weeks ago. Again, who knew then that we would be at 1,047 by August 26th? Once again, it took aggressive action by the Fed to revive the bull. This is an incredible seasonal pattern. It works for bonds too. Has anyone recognized how the yield on the 10-year T-note surged in the winter-spring of 2008, 2009, 2010 and 2011? In each of the past three years, 4% was either pierced, tested or approached. These were the peaks of the year each time. This time, the seasonal high was 2.4%. Are you kidding me? Our pal Gary Shilling may well be onto something when he says the ultimate low may be somewhere close to 1.5%.
To some extent, the bounce we are seeing reflects how deeply oversold the market was with the Dow losing 550 points over a five-day span. The AAII sentiment poll showed the bull camp shrinking 10 points in the past week to 28.1% and the bear share expanding 13.8 points to 41.6% so quite the shift here. It does not take much at all in these nerve-racking times to get investors to switch their views on a dime. So much of the move has been technical. Sentiment perhaps in some cases washed out — very quickly. It is still too early in the earnings reporting season to make a call here on the fundamentals — Alcoa is not the canary in the coalmine for the overall economy. And the economic data are still broadly mixed. Much of this rally actually is based on quite a bit of fluff like renewed expectations that the Fed is actually going to embark on more stimulus after all, following comments yesterday from two senior Fed officials:
Based on such analysis, I consider a highly accommodative policy stance to be appropriate in present circumstances. But considerable uncertainty surrounds the outlook, and I remain prepared to adjust my policy views in response to incoming information. In particular, further easing actions could be warranted if the recovery proceeds at a slower-than-expected pace, while a significant acceleration in the pace of recovery could call for an earlier beginning to the process of policy firming than the FOMC currently anticipates.
Vice Chair Janet L. Yellen, The Economic Outlook and Monetary Policy / Remarks at the Money Marketeers of New York University
Also, we cannot lose sight of the fact that the economy still faces significant headwinds and that there are some meaningful downside risks. In the headwinds department, I would include the run-up in gasoline prices mentioned earlier because that will sap purchasing power, the continued Impediments to a strong recovery from ongoing weakness in the housing sector, and fiscal drag at the federal and state and local levels. In terms of downside risks, these include the risk that growth abroad disappoints and the risk of further disruptions to the supply of oil and higher oil prices.
On the inflation front, the overall rate of increase of consumer prices, as measured by the 12-month change of the price index for personal consumption expenditures slowed to 2.3 percent in February from a recent peak of 2.9 percent last September. Even though the recent rise of gasoline prices mentioned above could interrupt this pattern, we expect this moderation of overall inflation to resume later this year.
William C. Dudley, President of the New York Federal Reserve Bank / Remarks at the Center for Economic Development, Syracuse, New York
Beyond a brief jolt to investor risk appetite, it is debatable as to what these rounds of Fed balance sheet expansion really accomplished in terms of helping the economy out. Three years of near-0% policy rates and a tripling in the size of the Fed's balance sheet hasn't changed the fact that this goes down as the weakest recovery ever — we've never gone this long without seeing a quarter of 4% GDP growth or better — or that the economy remains extremely fragile.
One thing seems sure. If the stock market were truly telling us anything meaningful about the economic outlook, then we wouldn't be having the yield on the 10-year T-note at 2.05% and barely budging as the S&P 500 nudged even higher to close at the highs of the session in yesterday's impressive positive price action.
Thursday, April 12, 2012
Another Oil Spill in the Gulf of Mexico? Oceans being murdered by design?
Blogman's Notes:
If the number of marine life washing ashore dead all over the world is any evidence then it is apparent that the seas and oceans of our world are being contaminated by something (or someone) and that marine life in it is dying as a result. We could say that marine life is being murdered; is it all accidental or is it being done by design? In either case the Bible warns of days when all of the waters on the Earth, salt and fresh, will one day be contaminated. Are these things such as the radiation contamination from Fukushima and from hundreds of Nuclear power plants worldwide, and from widespread use of DU (depleted uranium) weapons in Iraq and elsewhere, and from hundreds, if not thousands of Atomic bomb tests worldwide plus hundreds of Oil Spills from Alaska to New Zealand, from the Gulf of Mexico to the South China Sea not contaminating our waters and killing all life in them? Are we that foolish to think that the same fate does not await us and our children?
Revelation 16:3 And the second angel poured out his vial upon the sea; and it became as the blood of a dead man: and every living soul died in the sea.
Revelation 16:4 And the third angel poured out his vial upon the rivers and fountains of waters; and they became blood.
Revelation 16:5 And I heard the angel of the waters say, Thou art righteous, O Lord, which art, and wast, and shalt be, because thou hast judged thus.
Revelation 16:6 For they have shed the blood of saints and prophets, and thou hast given them blood to drink; for they are worthy.
You may believe in the Bible or not but I sure do and what I see happening all around me are things that were prophesied to happen a long time ago. Is this the End of the world? Not yet but it sure is coming!
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Fears of new Gulf of Mexico oil spill sends Shell & BP shares falling
Surprise Surprise - The Rich get richer, the 99% get Austerity
Blogman's Notes:
From ZeroHedge.com
The Federal Reserve and other central banks may have increased income inequality with policies that boosted prices of stocks and other assets without having a commensurate effect on the economy, said Mohamed El-Erian, chief executive officer of Pacific Investment Management Co.
In the following report from Bloomberg, Mohamed El-Erian, CEO of Pacific Investment Management Co. states the obvious that the policies of the most powerful institutions in the world, The Federal Reserve and the ECB (European Central Bank) along with just about every other Central Bank have served only to make the rich richer while impoverishing the 99% on whose behalf they are supposedly working. Is this all accidental or is there a diabolical plan to eliminate the Middle Class, leaving only a Ruling Elite and a Serf class? Whether one believes in conspiracies or not, actions speak louder than words, and the results of the actions of the Central Banks that run Monetary policy for the whole world have brought greater riches to the already rich and the bottom 99% are being subjected to Austerity, very brutal Austerity in some cases as in Greece. This trend has greatly accelerated as a result of a perfectly planned and executed Economic Crisis that has grown bigger and bigger since 2007. Five years into the crisis and all the actions of the Fed / ECB have only resulted in hastening the demise of the Middle Class and further impoverishing the already impoverished. Einstein defined insanity as doing the same thing over and over and expecting different results each time. So if the results of the actions taken by the 'Authorities' have widened the wealth gap between the rich and the poor, it would be logical to conclude that this gap will continue to widen, expecting any other result would be insane!
_________________________________________________________From ZeroHedge.com
The Federal Reserve and other central banks may have increased income inequality with policies that boosted prices of stocks and other assets without having a commensurate effect on the economy, said Mohamed El-Erian, chief executive officer of Pacific Investment Management Co.
In a lecture prepared for delivery at the Fed Bank of St. Louis today, El-Erian said central banks may be nearing the limits of their ability to spur growth and suggested that the “collateral damage” their policies are having on the economy and financial markets may soon outweigh the benefits.
Mohamed El-Erian, chief executive officer and co-chief investment officer of Pacific Investment Management Co. (PIMCO). Photographer: T.J. Kirkpatrick/Bloomberg
“The unusual activism of central banks may, at the margin, have worsened further wealth distribution,” said El-Erian, whose company is manager of the world’s largest bond fund. “To the extent that such policy activism succeeds in bolstering asset values, but not the real economy, the rich benefit disproportionately.”
President Barack Obama highlighted income inequality this week as he campaigned for higher taxes on top U.S. earners and criticized Republicans for opposing them. Tax fairness will be a central theme in the president’s re-election bid, Obama campaign manager Jim Messina told reporters on April 9.
While the Fed and other major central banks did forestall a global depression, they have had less success in promoting a full-fledged recovery, El-Erian said.
Leadership struggle in China has ramifications for the world - Economically and Militarily
Blogman's Notes:
Who will lead China over the next 10 years as it enters a turbulent period of Economic slowdown and massive social unrest due to income disparity. As in the rest of the world, the rich in China keep getting richer but the rest scrape for crumbs. With the threat of very high inflation always around the corner in China, it is only a matter of time before this tinderbox explodes in another revolution. The new leadership of China is in for a rough ride, that much is certain!
____________________________________________________________(Reuters) - A rising star is ejected from China's Politburo and faces trial for violations of Communist Party discipline. His wife is in custody, suspected of murdering a British national.
So much for an orderly transition of power.
Just weeks ago, the pending retirement of Chinese president and Communist Party Chief Hu Jintao to the younger generation headed by anointed leader to be Xi Jinping had appeared headed for a quiet repeat of 2002.
That year, Hu took the reins from Jiang Zemin in what was hailed as the first peaceful transition of power in the Chinese Communist Party's history. The party itself believed it had finally come up with a model for orderly and structured leadership handovers.
No longer. The 2002 transition increasingly looks to be the exception.
Wednesday, April 11, 2012
Massive 8.7 earthquake with major aftershocks in Indonesia and SE Asia
From ZeroHedge.com
Below are some of the videos that have been released so far:
Reuters has a summary of the events so far:
An 8.7 magnitude earthquake struck off Indonesia on Wednesday, sending residents around the region scurrying from buildings and raising fears of a huge tsunami as in 2004, but authorities said there were no reports suggesting a major threat.
Tuesday, April 10, 2012
Rebels in Syria refuse to lay down arms - International players do not want peace!
Blogman's Notes:
How can the internationals, namely NATO / US want peace when they keep arming the rebels in Syria (as they did in Libya) and sabotage any real efforts at achieving peace? The NATO / US War Machine wants war in the Mideast, a very big one by the sounds of it, and by golly, they'll have their war!
____________________________________________________________ More signs of Global Economic Recovery - Cargo ships being sold for scrap
Blogman's Notes:
In a followup to my weekend report on the ongoing Economic Collapse, yesterday I added a report of Sony axing 10,000 + employees.Today this report from the UK Telegraph reveals loud and clear that the Global Shipping Industry is in terrible trouble; it is not experiencing a boom as many speculated it would at the beginning of this Century. The Shipping Industry more than any other enterprise in indicative of the health of the Global Economy. When ships sit idle, factories sit idle; when factories sit idle, workers sit idle, which is what was reported yesterday. Why else would Sony be laying off 10,000 employees if it is selling so many PlayStations and TVs? We have been following the story of the Baltic Dry Index since 2009, this is an index that keeps track of the health of the Shipping Industry; the higher the index the better the health of this industry that tells us how many goods are being shipped worldwide. After hitting an unprecedented low in 2009, the index recovered somewhat in 2010 and 2011. But guess what? The index is once again trending downwards in a big way, so where is the Recovery? Never before in history has a Recovery been so short-lived unless there was no Recovery at all but just smoke 'n' mirrors set up by political leaders and the lying mainstream media. Sadly, the majority of people will only wake up when they can no longer afford to buy their non-fat, no-foam lattes at Starbucks or buy their $150 NFL Idol worshiping jerseys. But let no one ever claim that they were not warned!
----------------------------------------------------------------------------------------------The downturn in shipping is hitting the industry so hard that some of the world's biggest vessels are now worth little more than their scrap value, new figures show.
Shipyards have been turning out new vessels at a pace designed to service global demand that has simply failed to materialise, meaning the industry is now sinking under massive overcapacity.
As owners have seen the rates charged to carry freight plunge, demand for their ships has collapsed to the point that selling them for scrap makes financial sense much earlier in a vessel's life.
In the worst hit sectors, the fall in the ships's value and the rise in the price of steel – driven by rapacious demand from China as it builds itself anew – means that the difference between the prices fetched if vessels are sold on to keep sailing and those if they are broken up for scrap is now minimal.
Cargo ships as a general rule are built to sail for 25 years, yet in the volatile VLCC or "very-large crude carrier" sector, which comprises the world's biggest oil tankers, scrap and resale prices reached parity in recent months for the average 15-year-old ship, according to prices tracked by industry information provider VesselsValue.com.
A typical 15-year-old VLCC achieved an average resale price of about $78m (£49m) at the peak of the market in July 2008, its research shows. That figure has since plunged to $23m.
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