Home ShipmanagementAccountancy The World, Europe and Greece – a political, economic comment from a shipping perspective – part 1.

The World, Europe and Greece – a political, economic comment from a shipping perspective – part 1.

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The World, Europe and Greece – a political, economic comment from a shipping perspective  – part 1. By John Faraclas

All our previous analysis and views on the Shipping Markets and the world at large as same are in this site* as well as in live interviews of the writer, remain unchanged!

On the 19th of October it was 25 years after Black Monday and …coincided with the City’s flat Friday… as the market was just one point up in contrast with the 23 centum fall back in 1987 – lucky City boys… At the same time the Baltic Dry Index (BDI) was at 1, 010 point (Tin Tin would have a laugh…) following …the “desperate” call of the 17th  of October when it hit the famous 999 points, demanding a breakthrough through the psychological barrier of 1, 000 points. Personally I don’t believe in psycholocigal barriers; I believe in realities, and the first reality is that the market is well below the norm, being the 3, 000 points of the BDI. The second reality is that we are in recession no matter what the media and the analysts things off – otherwise how does one explain the world’s declining markets, unemployment etc etc…? I don’t discuss the wets – that’s even more dirty politics.

That’s why, for example ( I believe in an actual example situ) Greece should untap its oil, gas and other resources and export them at half of the current or better say prevailing “market” prices. Why the word market is in “ ”, well you know how and why these prices are fixed… Greece holds one of the world’s biggest oils and gas resources, not just to pay-off its “debts” but to better the life of its citizens! Again, why I have the word debts in “ ”, its simply because there is no real debt the Greek people owe around and in particular to other Europeans and their banks. I bet you that one day when this scandal is over and the Greek public is free and their money returned, that the BCCI scandal nearly 22 years ago (shutdown 5th of July 1991) and other scandals and frauds blessed by the international establishment and their cronies, puppets et al,  will look like a kindergarten case when the world finds out who the real hooligans are. Mind me, in my view the real BCCI scandal started with the refusal of the New York Regulators to allow any attempt of BCCI to buy a New York Bank in 1976 (yet another year of the Dragon like the current one, as in the year of Dragon many things have happened marking the world’s history – just check this coincidence). Did I hear you say Banksters? Did I hear you say politicians, err crook politicians in all fronts and states of Europe, particularly in Germany who knowingly allowed this unprecedented “lending” to Greece’s dynasts, despots or whatever you fancy calling them these “Socialists” of Pasok and Centre-Conservative New Democracy morons…?

The BDI 1 Jan to 19 Oct. 2012 – source: the Baltic Exhange

The biggest fraud in history is the manipulation not of Greece, but of its people. Now I bet you don’t know – otherwise you shouldn’t have harmed the Greeks in this way, but when the Greeks had enough in bad times, they conquered the world to all intents and purposes! It is the greek masters of the seven seas who conquered the shipping world and become the world’s shipping superpower despite all the unethical means used in and outside Greece against Greek Shipping. Simultaneously they become the envy of their competitors!

Now the World is on turmoil, Europe in tatters and Greece a prospective scapegoat in the way portrayed by the worldwide media. The role of the media, not only with respect the Greek saga, but other matters too, should be curbed as, I have the intuition that, some other forces will come up soon and smash them all together. The scandals and cover ups of the otherwise reputable media are above any proportion.

With the shift of the business in the East ever since the 1972 Nixon’s Ping-Pong diplomacy, the real Western World is suffering out of Dr. Henry Kissinger’s’ engineered visit, following two trips the previous year – remember…?. Using one of Mao’s own quotations during the feast at the Great Hall of the People, Nixon said it was time to seize the day and seize the hour “for our two peoples to rise to the heights of greatness which can build a new and better world”. Now what better world this diplomacy has built, I won’t say: it remains to be seen; I am categorically right and tell you: you can see it as the slump in the world economy and shipping since 2008 is more than evident. For forty years since this historic visit instead of having a better world and a better quality of life to all intents and purposes, we are having the worst ever situ; any objection?  I am wondering what will happened in the aftermath of this presidential election in the US on Tuesday the 6th of November, in exactly nine day from now. I don’t believe that either party has an agenda to save the world, given the up to now debates and the “establishment’s” preferences as well as views for a better world in a real new world order.

The figures in the indices means nothing if something unique happens and the Markets collapse. At 13, 000 plus on the DJIA and close to 6, 000 the FTSE and the Nikkei close to 9, 000 the economy looks fine; but wait and see…

America, as the US is better known, survives and thrives in my humble view to the detriment of Europe, its old metropolis, or better say the old metropolises given the special purposes immigration and reasons of the many different peoples of Europe who “fled” to the new world in the 16, 17, 18 and even 19th and 20th centuries and save themselves from the rulers or sovereigns or tyrants and or despots – you dead well know what I mean! They have created a new situation and slowly but steadily have punished their metropolises and their masters – they kept the “argument” alive! European Industry and Economy has collapsed, conversely unemployment in Europe has reach unprecedented levels despite the Marshall plan and all that jazz over the last 60 plus years go after the infamous Second World War. And what about Europe? The EEC the EU and all that? The famous Third World War, the economic war which is by far worse than those fought in the platoon during the first half of last century, sea and air, is now looming in the background. I fully endorse the American, the US policy as the Europeans still haven’t learned and live in hallucinations

Continuous …situs …err situations involve:

Taxation: Over the last ten years the taxation war has intensified, directed by the state and the establishments worldwide against its… “enemy”, the capitalists – industrialists, shipowners, masters and chief engineers, naval architects, to name but a few, giving food for thought weather these guys are Marxists or whatever else…. Some nine years ago I was studying one of informa’s International Tax reports under the title: “Dismantling obstacles to European Single market – the difficult area of taxation” and back in 2010 I was studying the Shipping Industry’s Almanac of 2010 compiled by Ernst & Young, both of which left me “wondering”: what’s up? Another interesting text is the one, the fourth paper part of series in Lloyd’s List back in Feb. 11, 1998, on legal risk management in the contexts of Admiralty jurisdiction by Dr. Aleka Mandaraka-Sheppard under title: “Examining concept of beneficial ownership under English Law”. Why I have chosen the latter? Well, I leave it to you to make the comment….  So to try and obtain the article; its worth it! Now this anathema of the state’s civil servants and that of the politicians to safe guard their jobs and pay, by taxing the public in the most unethical way, is what dismantles the society and free enterprise! Of course we need tax, but we must be more humane on the issue. Add the Unions “demands” coupled with unprecedented strikes and see where we go. I guess it won’t be long when we are going to see national fleets for example, like we see banks becoming state banks again after the failed privatisation and all that mess that some clever dicks instigated..… I bet we are! Capitalism needs a new form, a new face, and this is the result/message of this world crisis! But don’t spoil good capitalism!

Unsustainable banking or better say “Silly banking…”

The way banks treated loans of every kind, from personal loans (credit cards et al with trillions of debs…) to industrial ones, not to mention shipping loans , creates an unsustainable shipping environment. If you add the…

Shipbuilding “fiasco” and the environmental issues from 1995 today, then shipping will become totally unsustainable for the shipping investor.. Just wait to see. We now have CSR which is a good prospect after all but still needs to be refined in a way that serves its real purpose with undue increase of costs. Proper and traditional companies had always in force their own CSR!

Just recently we have “witnessed” that the Eurozone is in deep slump with plunging consumer confidence and if you add the investors confidence from within and elsewhere, then I am sure that, if you are a pragmatist, you have a better and true picture where the 700 millions of Europeans stand! Europe need investors of all kinds to be engaged in rebuilding peace, yes peace, otherwise a miserable bankrupt Europe will emerge… Europe needs here and now a Political union! Europe needs new politicians  to bring forward a true Democracy, a true industrial peace (shipbuilding and shipping included) as for the last 40 years, Europe and its media have created a wrong image, as they portrayed Europe being the force of progress, culture and free thinking. Look at Europe today trying to strangulate its own members for the benefit of whom? Take for example Greece and how they push Greeks (their cronies there) to decouple, default and devalue!

Mrs. Merkel’s recent visit in Greece should have brought a single message: write off and start fresh, otherwise, its true, nobody throws good money after bad! Haircut again: yes, just do it otherwise I bet you the world is going to be faced with a tenfold Greek problem!

And what about Spain, Italy, Ireland and other nations ready (if not already ready) to go under!

Did I hear you say security?

Security to all intents and purposes is a must, but not to the detriment of the investor and in particular the shipowner! Trading needs severe regulation and the Governments must provide this here and now, otherwise the scandals and fraud will conquer the world! The so called “Lists” in Greece and elsewhere should be thoroughly examined and those accountable have to pay the price as well as their backers!

How one can imagine the Greeks being safe if austerity and cuts rule the day? Same applies for Spain, Italy and Ireland. Cuts in the number of public servants worldwide, and particularly in Europe and Greece is a must but not cuts and tax which stop development and prosperity. The State sees cuts differently than the individual private entrepreneur. Where is the truth lies then? The important thing is people, not cash and we need to safeguard people and jobs in a pragmatic way, otherwise the people will have to pay the damage yet again. The way lately the tax issue hangs upon the Greeks and its masters of the seven seas is at best a set-up and extortion by the “business hooligans” and their political masters. And if there is a revolt to all intents and purposes from all Southern European countries?  Add a few in the Central and far west north Europe and you will see what I mean!

I am ending this first Crisis comment with a sort market prediction:

The Chartering markets will dive a bit – at best will remain buoyant with the BDI close to 1, 000 points and the wets steady as they stand; conversely the S and P markets will be affected. Scrapping will remain at the US$ 420-450 level per ton and the newbuilding industry will bring up the biggest surprise.

Look forward your comments!



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1 comment

Nicolas Eliopoulos October 30, 2012 - 8:54 AM

mr. Faraclas,
Truth spoken, too daring but totally true.


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