Home » Agatha Christie would have loved it! What’s next for the Shipping Industry?

Agatha Christie would have loved it! What’s next for the Shipping Industry?

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Agatha Christie1  would have loved it! What’s next for the Shipping Industry?2

By John Faraclas

As time goes by, the crisis of the world economy, better said the world economic war… is underway and not only does it  loom in the background, as some pragmatists like to imagine, but it is developing into an all-out conflict threatening the freedom of the private enterprise and its very existence – for which the Cold War was fought, remember, needless to say our lives and well being. The architects of this economic war have once again failed to foil the unpredictability of the public discontent which will erupt like a geo-based Yellowstone! What has happened to “western values, ” eh? Add piracy and terrorism and see what’s on the menu… and what will happen particularly as the Arab “Spring” fiasco3  is still on…, I mean unfinished and unsettled! There are other on-going geopolitical “activities”…mind the gap…!

John N. Faraclas

John N. Faraclas

For a start, the USA will increase its pressure on Europe to all intents and purposes as well as creating the necessary conditions with appropriate scenarios in the Far East, holding on to South America and Africa – for the time being, and will increase its dominance, not just stabilise it as some strategists believe. With two island nations, one in the Atlantic – Great Britain, and one in the Far East ‑ Japan  the US has a grip on two continents – I am sure you all know geography and understand geopolitics, so unfold your  charts and see what I mean! Both archipelagos act as shields in the respective areas enforcing Pax Americana to all intents and purposes, repeat to all intents and purposes; and why not! Two major continents, two major power blocks and one can see here manipulation at its best. As I have said, no matter what others say and write, I support  the view and have declared it in writing and live on SBC TV that: “… for the next 50 to 100 years – at least, the USA will continue to govern the world…” Remember, the US should have helped Europe, its top priority, having conducted two world wars and after the destruction there to rebuild Europe; it is not an appropriate behaviour to support China against the interests of Europe and have armies of unemployed people all over Europe as a result of low cost manufacturing taking place in China…

You might wonder why the above title? Well, it coincides with the 13 years’ highest FTSE 100 last Monday 21 May: at 6, 775.63, the best since September 2000 and punters were eager to see the all time high 6, 930 of Dec 1999 break. Agatha Christie’s book “Thirteen for Luck” as well as her wit match this event and the plot of the world’s current situation – suspense at its best! Many think that the bulls return, but… hold your breath.  At the other end the Baltic Dry Index (BDI) was struggling not to drop below the 800 points… So what’s up?

The world’s economic oxymoron issues and shipping

Both the Dow Jones and the Nikkei lately do well, around the 15, 000 points being the name of the game. Obamanomics and Abenomics, or whatever else you call it, do please hold your breath. Abe’s nationalism is known, the multi-stressed issue of the Exclusive Economic Zone (EEZ)  and dominance in the area will bring surprises. China, Indonesia, Japan, the Korean peninsula, Russian Far East, the Philippines, and Vietnam will be soon the focal point in the Far East. China does whatever likes – the first ever free trade deal with Switzerland – investments in Europe, particularly  in the UK, Greece and to a lesser extent other countries. Now analyse the true economic status of the countries mentioned and you will see that under the surface of all these achievements we read in the daily press, there is a bubble to burst!

The world economy shifts to a national/state economic entity, from the previous Reagan/Thatcher model of privatisation in globalisation.  Bailouts are not a new thing; don’t forget that at the end of the 70’s under Chancellor Dennis Healey the UK received a bailout o £2.3 billion and in return had to accept supervision and instruction from the IMF! Remember Johannes Witteveen…? It was a traumatic, not to say humiliating experience for a major advanced, proud and super power nation, a winner of the Second World War4  to lose control… You dead well know what happened in the eighties, the nineties and the naughties….  Today the IMF, assisted by the European Union’s presidium (Germany) is imposing its terms basically dictating same to the new Governor of the Bank of England… I guess all viewers will find out, so you can wake up, what else the IMF requires for the UK to do. But it’s going on everywhere and the ridiculed political outburst of the “powerful” ones to single out Greece, Cyprus – what behaviour, Spain, Portugal, Ireland, Italy et al, will become a boomerang.

The big bubble, the country with the greatest exposure, is Germany; add that basically Germany is bailing out countries not for the benefit of those countries benefit, but only for the sake of Germany!  The Euro was introduced for Germany to survive and rule by proxy … The French Socialists are trying desperately to hold on to power with François Hollande destroying the tax havens and the entire Anglo-Saxon world which introduced it follows suit…. Shame, shame, shame. France was saved by the Euro as its volatile and weak French franc was an anathema to the French economy, not to mention its overseas territories’ protective cost…deja vue? French actors take Russian citizenship; oh la la! Dobra! Reasons for Putin to be content… Putin runs the energy game too…

The entire political elite, the political hooligans as I have branded them, “brothers-in-arms” with the business hooligans, they also want the abolition of the tax havens which their forefathers introduced, and served their purpose,   as the bankers, who first established themselves there – I can write ten dozen books about all the ‘reputable’ banks avoiding tax based on their presence in tax havens, now hating the individual powerful depositor entrepreneur, say in our case, the shipowner with millions in his/her bank account– some hold billion of dollars and not asking for finance, but  self-financed from their savings. I guess the fiasco of high level prices in the shipbuilding industry was the preamble to wrecking the traditional shipowners, creating a point of no return, even to the extent of creating colossal losses within banks, as the short lived good “technically created” freight market collapsed in 2008 – an issue I had foreseen and documented would occur to the detriment of all.  I do employ irony here to its fullest extent! The listed companies too might get in the eye of the cyclone… Tornadoes happen in business too…

Coming to a closer look at the situation, let’s see what must be done and how the situation stands today which affects the entire shipping industry:

Europe will collapse unless we create as soon as possible a federal situation akin to the US.- (full stop and period). The rest, excuse my French, is pure bullshit – to use the famous American cliché… It can happen overnight. This is a must as Europe has by ownership, by flag, you name it, the largest and most powerful shipping fleet, the best fleet in the world!

Those of us already have the contingency plans, remember this. But in this Federal European Environment we want here and now to name and shame all those who created this inhumane environment we are now suffering, with youth unemployment around 30% – that and more is the true figure!

We want to see the culprits mentioned above return the money they embezzled, particularly down in Greece, and return all the money back to the pensioners, as well as reimburse them for all and any wrong doing that has reduced their pensions. This is a crime, and so long as it is not rectified, those who are imposing these inhumane austerity measures are at best, in reality, pure white-collar criminals. Cyprus too must have a say, despite being a small nation; it was good to have Cyprus in Europe, but not to destroy the Cypriots out of jealousy with respect to their attracting depositors; come on… Why in the first place “you” (“you” know who you are) didn’t declare what was going on? Why did you let the Greek politicians borrow money for the needs of the Greek state knowing that the largest part was supporting voting clientism  and or was siphoned away… You knew this all along…But your own political offspring where involved in these money- lending deals, threatening the existence of Greece and other nations in the same category…

The rest of the European south, Portugal and Spain, not to mention Italy, is bankrupt too; we all know this, everybody knows – listen to Leonard Cohen’s song: “Everybody Knows” (we have already hinted at this parallel… listen to this unique song)…

Did I hear you say the Euro? Well then if you want to have the Euro, re-price the Euro per the proportional parameters of every state’s economy representing the buying power as it derives from the workers’ wages and overall wealth, projectability and capability as well as assets of each member state. A well-priced Euro will lead to a true and pragmatic convergence of Europe as in the USA; any doubts?

Support the European shipbuilding industry and let for example the Greeks5  build ships in Greece – do not impose unacceptable issues, you dead well know what I mean.

Create a fair environment avoiding the overcapacity syndrome so that it may never surface again.! Just check the freight rates, the ship prices, the length of time of the euphoria from 1990 to 2013 and you will observe the biggest scam in modern business economic history! The shipping scam!

Make sure we don’t see incidents like the recent assassination in Woolwich of the British soldier Drummer Lee Rigby, or the attack on French private first class Cedric Cordier; or what has been taking place for the last six nights in Stockholm; they can trigger both a backlash and an unimaginable situation that not even in your wildest dreams …err not even Agatha Christie ever thought to put on paper…

Now, just to mention a few of the latest panic sayings about the economy and shipping in the hope of receiving your argumentative comments:

First, it is good to see that even the Economist over the last five years more and more gets involved with the shipping industry and I suggest you study one of their latest pieces: “The humble hero: Containers have been more important for globalisation than freer trade” (on page 74 of the May 18th – 24th 2013 issue).

Earlier his month at Lloyd’s List, Bertram Rickmers, of Rickmers Holdings, suggested “that shipping can return to sky high rates”; oh well, which shipping: liners, tramp, private, state, public. I wonder…

Will there be an exodus from the Greek flag… that’s the big question…. (this has to do with tax issues). All calculations in theory are fine, but, I repeat, one should be very careful. At the end of the day, in the true sense, the Greek state never respected the shipowners nor the seafarers! All regimes were interested only in election support from both sides… and how to pocket money…

There is an all-out war between Europe and Asia,   and I guess Soren Skou is absolutely right!

Very difficult days for ship finance, as those funds and methods available distort the true shipping industry enterpreneurship! Scandinavian banks are better placed to ride shipping crisis than their German counterparts; that’s a very strong and alarming statement!

Foretelling the future for world trade and conversely for the shipping industry is a very dangerous business as those who dare put forward such forecasts are censored; in any event, no-one is a prophet! Equally, the rating agencies and organisations should be very careful in their assessments. Let us be on guard over the insider dealers and let us support whistleblowers!

Be brave to see what will happen in the Arctic, the Antarctic, over shale gas, over American oil. Watch out for the eruption in Europe when the Euro will drive all mad. In shipping for example, who wants the Euro? No-one trusted this currency, in the sense as if it were a trusted currency and that all freight rates, at least from Europe were going to be in Euro…

Panama expects to meet its deadline and have the enhanced Panama Canal in working order by next year; at the same time one can see the Turks damaging the environment with the opening of the Kanal Istanbul – what a palaver…

Argentina is still in a mess, Brazil might become a superpower too, subject to discipline that becomes the cliché word there… Shale oil and gas is another distortion of mineral resources…  India is still trying to express itself but things are still sour.

Sanctioned Iran and torn apart Syria will create further destabilisation  in an already volatile area. The North Africa – Middle East areas and deep in the Iraq – Afghan zone, with too many epicentres, the geopolitical social and religious earthquake will not have a counterpart to match it…Soon you will notice its effects…

Given the above, can the P and I Clubs and the War Risk Insurers sustain the coming situation?

All other matters are already addressed in previous articles and reports by the writer and his views remain in force…

Finally, today, at Liverpool Cathedral a service has been held to honour those killed in The Battle of the Atlantic.It was part of a weekend of events commemorating the longest continuous military campaign in World War II. The merchant navy and its men paid the heaviest price. My father too was there when his vessel was torpedoed, but he survived. I have reason to speak up! I have reason to defend our shipping and seafaring western values!  I have reason to object to the cutting of the pension that my ailing mother and many elderly Greek seafarers of all ranks themselves and their wives suffer.


1 For her book “Thirteen for luck”.

2 Please see all our previous reporting on this site on geopolitical and shipping issues.

3 After 35-40 years of accepting these regimes, what really triggered their fall, emanating from the west? Equally, those who argue/objected to  the Iraq war, claim that one operation like the one to get rid of Osama Bin Laden, could have taken place to finish off Saddam Hussein and Colonel Muammar Gaddafi. Any objections? We should mention this argument as over one million people have lost their lives and millions more suffer in Iraq, Libya and in other places. Is that fair treatment?

4 One cannot accept the losers of the Second World War having the upper hand!

5 Who is prohibiting Greeks building even 5% of their newbuildings in their country’s shipyards? Greece is mentioned more than any other country because it holds the top place in the world shipping league.

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