Home Markets The Markets, Dry and Wet are down and out; Geopolitics a total recall…

The Markets, Dry and Wet are down and out; Geopolitics a total recall…

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John Faraclas

John Faraclas

For a second running week all the Market indices are in red and the forthcoming Geopolitical changes will definitely change International Trade and conversely Shipping; John Faraclas’ daily and weekly recap:

The BDI (Baltic Dry Index) lost another 13 points since yesterday and now stands at 827 points, nearly 100 points lower – to be precise 98 points since last Friday’s 925 points.

The Capers, the most volatile of all sizes saw its BCI  2014 lose 48 points since yesterday – now reading 1,239 points, which is also 371 points down from last week’s 1,610!!!!! (yes exclamation marks).

The Panamaxes remained more or less in the same levels; on a daily basis the BPI lost five points since yesterday –  now reading 968 points. On a weekly basis the losses …were “contained” in just two points from the 970 recorded last Friday.

The Supras’ BSI was down four points at 692 and 18 since last week’s 710 points.

The Handies more or less on the same numerical losses; the BHSI lost five points since yesterday, now standing at 419 points and on a weekly basis it was down 22 points – from 441 points…

So all dry indices on a high and …dry market modus… Caution is the least word to use…

The Wets too have gone under both on a daily and weekly basis. The last published BDTI (Dirties) and BCTI (Cleans) stood at 965 –  that’s minus 12 and 615 – that’s minus six points respectively. Since last week though the Dirties lost 37 points and dropped below the 1,000 point threshold (1,002), and the Cleans just managed to remain more or less the same, lost just one point – from 616 points.

There is already a Damocles Sword hanging above everybody’s head these days, particularly to analysts and finance providers; in our humble view all stakeholders are in disarray, save the very very few.

The WTI remained more or less in the same levels – last week it ended at US$ 53,24; now as these lines are written it stands at US$ 53,20. Will shall see on Monday the 30th the final closing, but we are concerned, as in our view, anything above the US$ 50,00 will cause irreversible social problems; remember this.-

Containerships continue to be a delicate investment and if trade wars erupt, then come and see me on the pier…

LNG’s and LPG’s will struggle.

The market obviously is what we have long expected to be and we reiterate our view that this is the best ever buyers’ market to acquire tonnage, particularly newbuildings. It is time to punish the arrogant trio – the brokers, the yards and the bad banks who allowed an unprecedented newbuilding boom with prices beyond any substance. We have mentioned these thoughts long before and we are showing zero tolerance! When we attend the various forums over the last 17 years – talking about this millennium, we always stood as the heretics in order to try and minimised the losses and avoid the situ which has been developed. No mercy for the banks that fall apart, no mercy to all involved in this newbuilding scam and two trillion-dollars have been lost ( I am sure if you do the entire  addition, you will verify our point and findings). Trillions from the middle man in the street who thought how good would be to own shares on ships – listed or not-listed… The stock markets couldn’t even recover a penny and you can see the returns… There was collateral damage too in many economies… Peoples, human greediness in other words and very bad risk assessment brought this market to these despicable levels.  Anyway, let’s be optimistic with respect to the fact that the seaborne trade is the only way and hope to change the world to the better. A bit of regulatory control could this time do the trick before we move to national companies, if we don’t curb our pathos for fast money – you dead well know what I mean.

The Geopolitical front with the MIGRANTS, BREXIT in full swing – particularly with the successful transatlantic trip of Mrs. May and other issues dominate the big change following last Friday’s rise in power of Donald Trump as the superpower’s 45th president!

The MIGRANTS continue to be the number one issue; Mexico is in tatters on the issue as the American president spells it out with the Wall, a very special wall and 20 centum tax from imported Mexican products in the USA to contribute in building this Wall between the two countries… Turkey might pursue yet another of its blackmail tactics given a three-fold issue Turkey is facing; the outcome of Greece’s Supreme Court on the fate of eight military men who flew a copter to Greece to avoid despicable justice punishment following last summer’s Coup …attempt there, and might ignite Turkish appetite and send more MIGRANTS to Greece’s Eastern Aegean Islands and then on to Europe. The three million of MIGRANTS there (awaiting in Turkey’s Anatolian Coast) might be also sent all over Europe in retaliation. Its financial problems as well as those in the Eastern Territories, with the Kurds and others might become messy for all the region… CAUTION and restrain before something else comes through and it will be difficult to stop… As we said numerous times, Turkey is a country to watch in all fronts, inclusive of its financial cracks appearing, slowly but steadily… President Trump has many reasons to care of what one has to do with MIGRANTS and rightly so! Let’s hope he can manage to stop this despicable issue spread not only in his country but all over Planet Ocean bringing in other problems for the societies and mainly on the social cohesion issue!

The Syrian and Iraqi saga with the ISIS presence there  and its backers still at large, needs to come to an end and let’s hope president Trump will sooner or later moves straight in and finishes them off before they inflict more mess in the region; enough! Obviously there still too much at stake in the region given the involvement of Russia, Turkey and others; … “vested interests” you see… What will  be the final Kurds reaction if they don’t have a full status state there… The international public’s wish to end the conflict there as well as other unfinished business before we see a major conflagration in the Middle East and beyond which will put the Suez Canal in danger… It won’t be the first time though!

Turkey must also respect international law and avoid pestering its neighbours, particularly Greece, a NATO ally and a European Union State member given Turkey’s aspiration in becoming a member of the EU, although personally I can’t see how this can happen…

Moreover the violations of both naval ships and war planes continue everyday in Greece’s Aegean and it wouldn’t surprise me if the shit hits the fan… Enough!

On the long standing Cyprus issue Turkey presents the problem and its solution, not as an ally to Greece in NATO, but as an enemy; this is what it surfaces all these 43 years. Sooner or later Turkish backers will abandon Turkey, not only on the Cyprus issue but almost in all unsettled issues were Turkey is involved. Time runs against Erdogan…

Greece next door continues to be also in a mess; internally as well as externally. The internal front is far worse than one can imagine and elections will make things worse. We reiterate the view of Greece’s need of an ARISTOS team to run the country for ten years and then after all is fine and Greece is saved, elections under a new electoral system can take place; a British electoral system will work wonders for Greece. Externally, Greece is being squized by Germany and its despicable practices. Time to say good bye to all these and a dignified GREXIT to become a catalyst…

BREXIT as mentioned at the beginning of this geopolitical daily/weekly report, becomes the most precious and looks like successful thing to happen for the United Kingdom… The current visit to the USA and meeting president Donald Trump as the first foreign leader to do this, puts Mrs. May at the forefront winning his backing on the BREXIT by strengthening this very special and may I add precious relationship, enhancing also their commitment for NATO!

Russian president Vladimir Putin is no doubt closely watching these developments and given his issue with the sanctions, let’s see how he reacts to all these mutual benefit happening from both sides of the Atlantic; equally Frau Merkel can feel the Earth moving.

In the Far East too, except Japan, everybody is concerned on what president Trump and Mrs. May, the USA and the UK can do on a global scale…

China, facing also financial meltdown – we shall see this after the New Chinese New Year (The Rooster) celebrations and if I may foresee, at the end of this year what its reaction will be given to the American protectionism from the one hand, but also the Chinese desperation to forge their special relationship with Theresa May’s Britain..

Africa, South/Latin America  and India are closely watching all these developments and also their attention is if the European Union and the Euro survive… The Mighty Continent is in tatters…

Australia has a totally different agenda and other interests mostly vested with the UK and the USA!

Have a nice weekend and be on guard for every eventuality!

P.S.: there will be continuous updates


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