Friday, August 28, 2009

Tankers anyone?

China must be pushing the envelope if this email we received is true. They are building new factories, new office towers, in fact the government is threatening bankers with criminal prosecution if they do not loan money for projects. Keep in mind this means the creation of even more supply and manufacturing for a world that needs much much less - not more. But these jokers can't get through their heads that making a new factory no one needs is not a good use of capital.

But if things are so great over there...why are the oil tankers sitting full and loaded waiting for weeks in the harbor?

Been interesting seeing how the talking heads are beginning to discuss the Baltic Dry Index. I am a Captain at Delta, and fly to Asia as part of my normal schedules. We are not carrying any cargo too or from Asia, and our planes were always full of "belly freight" up until this last Spring/Fall. In fact it is so severe, Northwest (Delta) is pulling out of the market as a dedicated freight carrier. Something they have done since 1947, all due to the reduction in cargo from Asia to the U.S. We recently pulled out of Guanzhou (70% of the production in the surrounding area used to go to Walmart) due to the drop off in freight shipments. 
I should tell you about the ships sitting in harbors sometime. We see literally thousands sitting empty in ports or harbors everyday flying over Tokyo, Osaka, and Nagoya Japan and Shanghai, China. On the other hand we also see Hundreds of oil tankers sitting at anchor FULL, probably being used as storage. Appreciate your observations 
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