Article - 51 Week 8 Container Prices Have Defied Gravity:

Article - 51 Week 8 

Container Prices Have Defied Gravity:

Strange as it sounds, post turbulence the container prices have scampered up north to a 20-year-high, while the freight prices kept tumbling and shaking all the way down to a 20-year-low. The low demand for freighting in container trades led to new buildings to disastrous ends and destroying the asset value of the old tonnage beyond any sense of dignity. Cold lay-ups led the way to the graveyards. Charter hires came to their historic lows and stayed there living on the oxygen of hope.  This is all well understood, in the backdrop of the great uncertainty in the world economy.  

However, what is not yet understood is the sky rocketing of the container prices to a 20 year high - both new and old. No one knows who ate up the boxes during the 2008 crash. Rumours floated that China's new stimulus package melted a whole lot of containers, creating a severe scarcity. They might as well had melted some old tonnages to buck up the shipping market ! Slow steaming, and cut in production could be the main drivers for the rise in price of containers to such inexplicable highs.

Shipping is a curious business of steel. It's all about the price of steel in ships and price of steel in containers, paramount to the costs of doing business. At this point of time, the price of the steel in ships is abysmally low, while the price of steel in containers in phenomenally high. The resulting freight is derived from the combination of these two components. However, since the freight elements are never separated it is hard to say what contributes to the current freight levels of today - ships or containers! If I want to be a container owner today, I would get much less return on my investment, while under the constant threat that the high prices could tumble any day like a pack of cards. If I choose to become a vessel owner today, I'll get just about sustainable levels of freight now with the current price of acquisition and an undying hope of vessel prices shooting up to historic highs in a 2 to 5 years horizon.

For more & unedited versions, please visit & leave your opinions on, http://ourships.blogspot.com/

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Brgds

Capt Rath

Econship Marine

704:5:6 Maithili's Signets 7th Floor,
Sector 30A  Vashi Navi Mumbai 400 703.

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Tel : +91 22 6457 2316 Fax: 27814294

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Article - 50 Week 7 On Government & Business:

Article - 50 Week 7

On Government & Business:

If governments are like bandits, no matter how they got into the role or how long they can continue, their principal objective would be to maximize returns for themselves. Even sugar coated coinages like "by the people … for the people ...to the people"  of democracy are in real life of a different hue - the people means the people in power  not the common people. They may tend to do good things for the common people to please, appease, hoodwink, confuse, or fool them into voting them to back power next time around. Or they can do good things for the people, if that indirectly amounts to more returns for themselves. For example, by going the populist way they can earn large share of votes and by stimulating the economy to grow through liberalization, they can fatten their returns. Therefore, we see in India now, a combination of both ways by the people in power. Coincidentally and luckily, that is good for the common people and for the people in power this phenomenon has become the unstoppable Frankenstein's creature.

How the government seizes power over the people, has a big influence on how it performs for its subjects. Dictatorship is one of the most prevalent forms of government in the world. When people  in power, refuse to leave they become dictators. In order to seal any chance of any competition to challenge them, they resort to blunt any pocket of resistance. Blunting resistance becomes an obsession even when the wealth they could amass starts to tumble. However, that does not imply that they do not hanker for the money and want just to be in power. After all, any one who has power and no money in ones pocket is a deadwood, eventually to get burnt with little fuss. And that in fact what happens to most dictators, as we saw in Tunisia or Egypt. However, there are smart dictators too, like in China. Unlike Mao, who wanted to perpetuate his power while money was being being drained into Taiwan, the later leaders realized that power alone without money is just like a lame toy. Xiao Ping's cat, whether black or white, had to catch the mouse. And it has caught the fat mouse. With the money in his pocket, the dictator in China has created jobs for the millions who had time and reason to grumble or resist. This master stroke has kept the Communist Party firmly in power while possessing trillions of dollars and unthinkable amount of assets. So dictatorships could go both ways - either complete depravation & degeneration of its populace or the rare opposite of this. 

To Continue….

For more & unedited versions, please visit & leave your opinions on, http://ourships.blogspot.com/

Brgds

Capt Rath

Econship Marine

704:5:6 Maithili's Signets 7th Floor,
Sector 30A  Vashi Navi Mumbai 400 703.

Dir No : 6457 2316

Tel : +91 22 6457 2316 Fax: 27814294

Sales : 645723  18 to 19 Trade : 645723 29 to 31

Acc Adm Hr : 645723  20 to 23 IT : 6457 2324 

Export & Customer Service : 645723 25 to 27

www.econshipping.com + www.econarmy.blogspot.com

MSN : psrath@hotmail.com Skype : psrath

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Article - 50 Week 7 On Government & Business:

Article - 50 Week 7

On Government & Business:

On many counts, humans tend to get led in groups or bands. They would follow a lead, rather than think and act independently with perfect rationality. There are thriving industries like fashion garments, and rock music etc, who exploit this collective human dumbness -  if we would like to call that. However, the extreme exploitation of this weakness has given rise to the best of all industries : Government!  Humans can not live without being led. The silver lining is that there are a few among these humans, who think differently and would rather lead than be led. Such people make governments. Governments are of many types like democracy, autocracy, hereditary, military, and so on. They lead and extort a hefty price. That's where the reason for governance gets lost in search of maximizing extortion. Most of the time they would extort the maximum possible amounts from the people they lead and gloss over the long term effects. 

Some are short sighted and some are visionaries. Generally, where the longevity of continuance is of ephemeral nature, they invariably resort to short term outlook and extort mindlessly and cruelly the maximum they can from the people they lead. For example, our elected governments know that they would last surely for five years and uncertain about the next election. So they engage themselves in 5 year-extortion-cycles. That's comparatively benign in comparison with cases where the government is in the fear of losing its power any time or have the apprehension of being toppled, like in Pakistan or Afghanistan. They simply plunder. And in cases where the government is secure to the thinking that they would stay no matter what, as in the case of U.A.E, Singapore, China or Brunei, their attitude takes a phenomenally different trajectory.  They invariably think of building roads, rails and spreading education to all to produce more wealth, so that they can extort (tax and high resource revenues) more and more, rather than mindless plundering that would diminish wealth and therefore the size of their booty. However, some like Fidel Castro would like not to topple the apple cart in the fear of breeding competition in the process, with Uncle Sam watching every move.

In other words, governments are very similar to bandits in their behaviors, no matter how they take the reins of power. When the a group of bandits loots a locality where they would not return, they would plunder every thing and may set the place on fire and kill the victims to prevent backlashes. However, when they have to do repeat acts, they would rather behave like Robin-hood to keep the people producing wealth in a continuous manner and periodically plunder only from the accumulators. By distributing some of the loot to the poor workers, they maintain their support base and perpetuate the extortion with considerable ease, stability and lesser blood. MNREGA is just one example in India and in Singapore the government tops up the Bank accounts directly from the budget surpluses.

To Continue….

For more & unedited versions, please visit & leave your opinions on, http://ourships.blogspot.com/

Use http://econarmy.blogspot.com for info sharing

Brgds

Capt Rath

Econship Marine

704:5:6 Maithili's Signets 7th Floor,
Sector 30A  Vashi Navi Mumbai 400 703.

Dir No : 6457 2316

Tel : +91 22 6457 2316 Fax: 27814294

Sales : 645723  18 to 19 Trade : 645723 29 to 31

Acc Adm Hr : 645723  20 to 23 IT : 6457 2324 

Export & Customer Service : 645723 25 to 27

www.econshipping.com + www.econarmy.blogspot.com

MSN : psrath@hotmail.com Skype : psrath

Article - 49 Week 5 Are we not all Popats?

Article - 49 Week 5

Are we not all Popats?

 

Going by the "Sonawane" & "Popat" episode, Popat represents a case of both of being a victim and a perpetrator of corruption. Like the last straw that broke the donkey's back, an exorbitant extortion of Rs 2,00000/ by the government official drove him to douse him with petrol and set on fire. Looking at this from Popat's perspective, he had no recourse to seek mediation or justice, since he himself was part of the murk for his living. He stole oil from tankers. The degree to which Popat  was on the wrong side of the law, does affect his helplessness or moral standing. And therefore, the doors of common justice seem shut on him.

 

If we keep the degree of deviation as a variant in the hands of the state through policies , laws or otherwise, can we  not create many mutations of the Popat? Popat is guilty from any angle you interpret the law and Sonawane isn't. The later was doing his duty and to prove that he was jumping the red line by asking bribe is too uphill a task. We all know that and experience it in every day lives. When the customs official, service tax officials, the municipality babus, the income tax officials, the charity commissioner, and even the port officials demand bribes beyond what we feel is bearable for our livelihoods, do we not wish that we could do a Popat-like act? In a situation, where the state takes away all the opportunities for the people and compels them to jump the red line of law to make a living, the subject becomes a topic of intense debate for its justification or condemnation. In any case, since justice too is vended by the state, the interpretation shall be in favor of the state's employee and against the subject.

 

Thinking from Sonawane's predicament, he certainly did not deserve this sort of end. What he was doing was wrong, if the bribery case can be proved right. Then, in that case the entire bureaucratic machinery is guilty of that. He was just in the wrong place in the wrong time and dealing with the wrong man with the wrong quantum of booty to take away. But you can never know the wrong man from the right, especially when all victims react similar to a cat-act when cornered. And you can never be sure about the quantum. It is always better to err on the higher side and then if you err too much it could be disastrous like Sonawane's fate!

 

For more & unedited versions, please visit & leave your opinions on, http://ourships.blogspot.com/

 

Brgds

Capt Rath

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