> The rates for both trade lanes are hovering around 2019 levels, but fuel and labor expenses are higher now than before the pandemic.
Hard to really feel like this is a crisis, since all of the reporting is how there was a brief, glorious period (for the companies) of 10x prices, and the crisis is that the period is ended.
Definitely feels like there should be a "law of headlines" coined to effect of - something must always either be surging catastrophically or plummeting disatrously.
The truth is, journalism has cratered. However, most are not ready to accept the truth, since they still believe the media are an essential part of democracy.
"When you’re young, you look at television and think, There’s a conspiracy. The networks have conspired to dumb us down. But when you get a little older, you realize that’s not true. The networks are in business to give people exactly what they want. That’s a far more depressing thought. Conspiracy is optimistic! You can shoot the bastards! We can have a revolution! But the networks are really in business to give people what they want. It’s the truth."
It's not that journalism has cratered, it only reached a level of what people are willing to consume.
Vice News used to be great and essentially apolitical. They went to interesting, dangerous places and reported what they saw by showing you what they saw. Their viewership grew rapidly.
Fast-forward. All new Vice productions are deeply and uniformly opinionated. Comparatively few people care to watch. Relative to their previous work, this later work received no significant attention and generated no revenue.
There is political groupthink in reporting ruinous to the bottom line.
> Vice News used to be great and essentially apolitical.
One of the founders founded the proud boys.
>They went to interesting, dangerous places and reported what they saw by showing you what they saw.
They were rich nepo kids going into places and doing a ton of poverty porn. Seeing the inside of a favela on the eyes of a brooklyn kids whose dad makes pharma patents was edgy in 2000s but boy does it not hold up.
> All new Vice productions are deeply and uniformly opinionated.
Same as ever, nepo babies think they know everything. If you go back you see plenty of it in their early stuff too. You were just younger and noticed it less.
> this later work received no significant attention and generated no revenue.
By 2012 they had already completely sold out when they sold the mag to i-D and still where making massive numbers.
They are being sold now for 225 million despite their bankruptcy.
> There is political groupthink in reporting ruinous to the bottom line.
Fox News is the most overt political entertainment network in the planet and also the most profitable. Seems like your theory is entirely at odds with reality and your rose tinted glasses of gonzo Vice is mostly ignoring the actual content of the magazine.
That's ad hominem, not a counter argument about Vice's content.
> They were rich nepo kids going into places and doing a ton of poverty porn. Seeing the inside of a favela on the eyes of a brooklyn kids whose dad makes pharma patents was edgy in 2000s but boy does it not hold up.
Yes, so? This description is good journalism. You're just trying to come up with derogatory terms to describe it, while there's nothing wrong with any of that.
Pointing out overt political activism by the founders is pretty important context when discussing the "apolitical" nature of their ventures.
> Yes, so?
Edgy != good. The journalistic value of interviewing a "cartel" member with 0 verifcation, sources or journalistic codes is not good journalism. It is just titilating porn for middle class people. The person being interviewed might just be a kid with a mask, an airsoft gun talking about how much heroin he sells and how many people he tortures.
Or worse, they might actually be in a cartel and try to impress the kid with the camera and shoot someone to shock them. (Something close to this happened while they filmed cartel members doing coke at a bar in mexico). Absolutely no journalism happened that night.
> while there's nothing wrong with any of that.
Shitting all over the word journalism, ignoring lessons learned by countless of better, braver, more talented men and women and going for shock over reality is all pretty good reasons.
I only used buzzwords because I think the naivete of rich kids pretending to be journalists being exploited for profit by a company founded by a wannabe neonazi is too obvious to have to spell out.
Yes, interviewing a faceless "cartel" member with zero verification would be poor journalism, which isn't the same as bringing a camera into XYZ location and recording/describing the conditions, which classifies as journalism in the same way that war journalists who go into warzones and describe situations are journalists.
I think ironically enough your personal feelings regarding the founders of Vice are coloring your perspective on their earlier work which meets the textbook definition of journalism.
It's not ad hominem in the context of discussing bias to point out that a person who founded one biased organization also founded a political advocacy group (aka another by-definion biased organaization), it is describing a pattern.
Robert Kennedy Jr is a crazy anti-vax nutjob, therefore, all of his work on environmentalism is invalid and the entire cause of environmentalism is suspect. Is that how this works?
1. Saying a person founded a group is not an attack, insulting them is.
2. The relationship between a vaccine stance and an environmental stance is weak, if existent at all. The relationship of a political advocacy group and a media outlet is pretty strong - that is "i have something to say and the tools to say it loudly and widely" is a common pattern among those with the means (religions, wealthy folks, political fringe groups, etc). It's not ad-hominem to say "this new MLM Bernie Madoff is promoting is very similar to the ponzi scheme he was previously convicted of" either.
3. It's not ad-hominem to declare that a persons actions are consistent with their stated goals - it's not an attack, nor is it an attempt at discrediting (or supporting) their position. It is ad-hominem to say "unrelated opinions about vaccines discredit this environmental opinion".
That is not what ad hominem means. Responding to the claim that Vice used to be unbiased by pointing out the cofounder of Vice also happened to found an extremist right wing organization—some might call it a terrorist organization—is perfectly fair game.
The Proud Boys started as a joke by a former Punk Singer. Punks ideology was based on anti-racist and anti-sexist beliefs, They didn't realize that there was a real audience for their satire and the group was Co-opted by actual racists.
A similar thing happened to the Tea Party which was anti-1%'res which is now controlled by their corporate donors. It's new name is the House Freedom Caucus and they want to default on US debt.
I used to watch Vice News Tonight religiously and (at the time, at least) the quality on journalism was miles above CNN, Fox News, etc.
The main thing I remember about it (which may still be true today) is it was the only daily TV source of relatively unbiased reporting that includes world issues and isn't 100% focused on reporting within the USA.
No, thats just wrong. "What I say is always relevant to you, no matter what you do" seems to be a new game in society, but that doesn't make it any more true. If I don't talk about politics, then my position is "I am totally unable to change anything, so I keep my mouth shut and save the energy for something positive."
This reminds me of people so religious that they cannot eat a hamburger without somehow referring to the Bible. It's not that everything cannot be political or religious. It's that some people insist that it be so.
I can say that Biden isn't up to the job, and that Trump is a wanna-be dictator who should not be given a second chance at pulling it off. That's apolitical, in that I'm not shilling for either side, but I'm sure not fine with the way things are now. I'm just also not fine with the other side's proposed solution.
Commenting on good or bad aspects of politicians is literally as far from being apolitical as can be, regardless of if you feel you're being neutral between different parties.
All right, how about if I say that society is messed up in some real ways (including politically), and the solution is not going to come from politics, because the problem fundamentally is not a political one?
That's not a political statement (unless you have a very expansive definition of "political"[1]), but it's still not "I am fine with the way things are now".
[1] And if literally everything is political... then nothing is.
Maybe superficially (as the market molds tastes as much as it caters to them), but there's a third option between conspiracy and a bad market, and it comes straight out of Chomsky's "Manufacturing Consent"[0]. According to Chomsky, there are five filters "that determine what information and ideas tend to be conveyed through mass media and how they are presented":
1. "the ownership of the media";
2. "advertising as the primary source of the income of media companies";
3. "the sources of the information and opinions that are propagated by mass media, which are primarily government officials, business interests, and the experts who are approved of and often funded by government and business";
4. "the negative feedback that mass media companies get when their content conflicts with these common interests";
5. fear, i.e., "mass media have an interest in selecting and conveying information, and in molding what counts as a respectable range of opinion, in a manner that is conducive to generating fear and hostility toward anyone who would challenge the shared basic ideological presuppositions of the overall government-corporate-media complex".
In other words, the media is a propaganda machine that reflects and reinforces the narrative of the regime. It involves no conspiracy, only dependence and coincidence of interest. As Chomsky would say, the media is to democracy what the police baton is to more overtly aggressive regimes.
You might look into a completely a-political media outlets, like Discovery Channel on TV, or Tom's Hardware on the net. Is it a complete and utter crap compared to what it was 10-20 years ago? Absolutely. Was there any "government-corporate-media complex" involved in running them to the ground? Absolutely not. It's just that the "aliens at Nazis' service"/"best LED mice for gaming" — respectively — somehow generate more revenue (in TV/Google Ads sales) than the content these outlets ran in the past.
> It's not that journalism has cratered, it only reached a level of what people are willing to consume.
I've seen this in writing from journalists and writers, and feel like this is too easy of an out. It's as if readers were in a vacuum and journalism didn't affect them in any way shape or form. I don't buy that the press and media had no hand in creating the current public's lowered expectations.
So perhaps it's what people are willing to consume now, but it's after decades and decades of market shaping and journalistic exposure. We can't just ignore that.
When journalism decided to make a deal with the Devil, and ads became the main source of revenue, it was inevitable for writing to shift towards maximizing clicks. The dopamine pulses of this style cannot be ignored and so to compete all news eventually reached equilibrium in this same vein.
Willing to consume? That sounds like it is the consumers fault that the population is not getting acceptable trustworthy news, because they are not willing to consume it on some level. Very strange business model.
Personally i am not willing to consume anything that is even remotely forced upon to me. I will not watch the news when companies think i should watch it. I will watch it whenever and however i want.
I will not be forced into some weird guilt trip that news companies cannot publish acceptable trustworthy news because of my lack of interest and spending on it.
But hey, if for another big part of the population that business model works, good for them. I don't care.
there is no fault; there is no guilt trip. There is no "cannot publish acceptable trustworthy etc.". These are observations and a proposed explanation that the causes described are resulting in the observed phenomena. You are not an island, or else the rest of society is your sea. You may be uninterested in your milieu, but your milieu is in[terested in] you.
It's an interesting point but one that is flaw as the market isn't open.
The problem is reverse, we thought they were giving the network what it wanted but it's clear now it's a narrative to push a world view that may or may not reflect reality.
There doesn't need to be a conspiracy when so much of the media is consolidated that the people on top can simply make decisions that affect all of them, or just give all of them the same script:
In a capitalistic economy, journalism is expensive and has to be paid for by one or two of the following:
1. Appealing to vast audiences and then selling them to someone else for a very low price per view or a subscription. (Populist)
2. Appealing to a small group that contributes handsomely to your cause. (Funded Propaganda/Self Funded)
Even publicly funded media has to do something along those lines and appeal to the people who fund their organization. When consuming journalism, you always have to look at who is paying for that journalism. That will determine what they DO NOT report on. This is why it's so important to view information from competing organizations.
Ahh, the good old "it is only for your good" argument. I don't buy it. There wouldn't be any unhappy media consumers if that statement were universally true. Everytime I read something which has been badly researched or which is blatantly trying to manipulate me and I feel like this is bad journalism, is the media givng me what I want right now? Nope.
The average person is to dumb to deserve quality reporting is another way to put what you just said. Even if that might be true, it doesn't change anything about my perception of modern journalism.
I dont remember claiming there is any sort of conspiracy. All I am saying is that you can't expect people to pay for low quality output. The other side seems to pretend that in capitalism, the consumer is supposed to pay to improve the product quality. I seriously doublt it works that way. What do media companies expect, a sort of loan from consumers for future quality articles?
Lamenting the unwillingness to pay for trash is a hopeless cause. The cat bites its own tale. Most news outlets I know have deteriorated so much in quality that I would never even think about paying for any of that propaganda. Give me a good, balanced, non-pliticized and honest news site, and I might consider supporting them.
You don’t actually want that or you’d be paying for it already. The problem is that most news doesn’t affect you and the majority that does only affects you in that it excites, scares or entertains you.
It wasn’t that news got bad or people got more evil, it’s that the value of information cratered and now it’s not even expensive enough to come with editors.
Is it possible we know each other from StackOverflow perhaps? Because I remember a bunch of people on there who think it is productive to start a posting with "You don’t actually want that".
> The problem is that most news doesn’t affect you.
There is plenty of news that affect me, it just happens to (mostly) not be covered in the news. And when it is it is often propaganda rather than even remotely unbiased reporting.
I truly love ground news, but it constantly forgets where you are in the feed when you open an item so you'll be reading down fifty items or so and open one then go back to the list and have to start scrolling from the top again. It really, really wears on you. I wish they would finally fix it. Despite that major annoyance (it really makes me wonder whether they even dogfood), the Blindspot is so interesting I still power through.
The Economist has pretty broad world news coverage. You probably won't do better than that. (US outlets are much more US--and to some degree Europe--centric. The US used to have decent weekly news magazines but they basically don't exist any longer and, in any case, were fairly US-centric.
The problem with these is that the taxpayers did not decide on this cashflow. The government did. And that is why you perceive news as propaganda, because these newsoutlets very well know that they are being payed by the government, and therefore they have to preport what the current government wants to see reported. Its a bit like with ads: The customer is not the consumer, the consumer is the product. The government pays taxpayer money to be able to influence public opinion.
That's still the need to make money. It's just that they're making it from the government, and therefore have to publish what their real customer wants.
Its even worse. In my country, the government has given a lot of money to media companies, right around covid. That magically made them all comply and report the same government propaganda. However, even non-conspiracy-theory-people have realized what is going on here. After the fact, I believe no sane person would want to give them money, because, you know "the state is already paying em, why should I?"
Here the government gives the media companies money all year every year. And its not even the government's money (from taxes) but my money that I am forced to pay for a contract that I never agreed to or want and can't opt out of.
> If you're a tax payer the government's money is your money, no?
Indirectly, yes but the details are very different.
With taxes the government decides on how much tax you pay for various things and then the money goes into the general budget from which the government again allocates funds for various things. Allocating more money towards overpaid entertainment personalities and greedy sports organizations in this model would mean less money the government has to pay for other things so you'd hope they would put some thought in what expenditures are really needed. The budget is also periodically re-evaluated. Taxes are also generally either based on something you choose to do or based on income, meaning they are means tested and usually increase progressively in order to put less of a burden on those that already have less. Taxes are also collected by government institutions which means whatever organizatons are involved in providing the services the taxes pay for won't need to know my banking details or place of residence.
The TV fees are very different. Here the legacy media companies get a flat sum from everyone (with some exceptions) without consideration for either what burden this places on the individual payer or what funds are really needed to provide the respective services. Politicians only ever have to think about the amount when the companies involved ask for bigger handouts. Instead of considering of these legacy media companies are still needed with the internet and available, or if we need the current excess (with a separate TV station per state plus two for the country overall), these media companies and the politicans that enable them have decided that making their services available online means that everyone is a potential user and must pay. Unlike taxes these fees are not collected by the finace ministry but by a separate organization representing the media companies which automatically receives the place of residence for everyone registered in Germany.
I laugh (read: cry) everytime I hear a wannabe "journalist" lament the "threats to Democracy", not realizing - or at least not acknowledging - that they and their ilk have been leading that effort, shamelessly, for years.
If there's any group that knows first hand about what "the threat to Democracy" looks like, it's contemporary "journalism".
We stopped paying first. As we got more comfortable over the past few decades, we wanted the news to do our bidding and confirm our prejudices. Because you can't please everyone, they failed, and so we stopped paying. Now all we get is corporate PR and AI-generated clickbait like this. It's a pay-to-play world.
Not to put pre-1990s journalism on some sort of a pedestal but people basically stopped paying first because their only free option previously was the evening news.
The thing is that news has an utilitarian function : we should be able to debate what is going in the world around us. What’s going on in the world is another word for news.
I agree that news/journalism should be accessible to everyone.
But piracy of paywalled content just provides a relief valve for whatever demand there is for accessibility, and keeps the 'news' a property of parties like Rupert Murdoch (in the case of WSJ).
Most are not ready to accept it because - ironically - the media pumps the ether with a narrative that what they are doing is journalism, has value, etc. I have a friend who went to school for journalism and (I swear) doesn't understand the difference between news and op-ed.
Few are willing to admit they've been duped so they double down on embracing the con. It's a vicious cycle.
Are you taking issue with the facts reported in this article, or just taking a generalized swipe at outlets you don't like, and lumping it all under 'journalism'?
Without the reporters at the WSJ, your doctors could be making decisions on your care on the basis of Theranos blood tests.
>they still believe the media are an essential part of democracy.
It is, but maybe not in its traditional forms. Further, social media was supposed to be part of the solution but apart from a few shining examples has instead become about selling us crap, spying on us, and holding our attention away from the problems of the world. This all isn't to say that media in some other form or rebirth of these old forms isn't still the answer to information sharing and reengaging civic dialog.
Fake journalism during COVID-19 killed so much trust in democracy that it seem to be an anti-thesis to what you just said. Bad journalism apparently can kill democracy as well.
And that’s an inclusive “or”, mind you-- I remember an Al-Jazeera news story that opened with the line “Some say the new measures go too far… but do the new measures go far enough?”
It's annoying because the "Critics charge X but supporters say Y" is an easy template for lazy journalism, and you invariably end up just re-typing the press releases of two competing advocacy organizations.
If the Association of Umbrella Manufacturers says it's raining outside and the Organization of Sunscreen Bottlers says it's sunny, the reporter needs to open the window and look rather than just forwarding those statements; I can read them myself if I want to.
Exactly my grip with CNN and others news channel trying the 'middle ground' like BBC. I'd rather watch media with declared bias like Fox News than CNN/BBC where the bias is only visible in subject choices and editors/presentators are afraid to get wet. Upside : that's allow for a quick U-turn.
By the way, I know an independent journalist: the version you get on TV is often the editor's cut. Sometimes journalists are only reporters, but more often than not there is censorship (or self-censorship for non independent journalists) in the editor's room. That's why report from the same journalist can be used by 'liberal news' and ' conservative news' (not idea if that happens in the US, but in my country it does.)
Honestly, you'll be better served with local newspapers. Or independent local news.
The law of headlines should also mention that they mention events in the future: “Today, we expect the president to meet with xyz and announce what they will do with abc”, building up the thrill, rather than reporting when it’s done and the announcement is made.
Journalists talking about the future. That’s not journalism.
Yes, it is. Being aware of how the immediate future is shaped by already made decisions helps to inform people who wouldn’t otherwise know what’s pending. The contrary journalistic standard would be, well, the first chapter of Hitchhikers Guide to the Galaxy.
It’s a journalism of building up expectations and hyping up the dopamine, ie it’s barely marketing. Journalism is about reporting information. Information about future events is not information.
Of course it is. I would be furious if my local news stopped informing me that the highway will be closed for maintenance on Saturday, elections are being held on Tuesday, public schools have the day off on Thursday and the local university will be playing a championship game on Sunday.
How is no one talking about the sanctions war? Either here or in the article. Part of the sanctions war has made it extremely hard for insurers to know whether or not they are violating sanctions by insuring vessels. Navigating the current legal landscape is a nightmare for shipping companies, which leads a lot of companies to not not accept cargo if they can't be certain about the legal situation.
Im not sure I follow… rates are the same as 4 years ago but operating costs are significantly higher. That seems genuinely difficult - if their rates dont keep up with inflation then its not a sustainable trend.
What were their rates 5, 6, and 7 years ago? what was their inflation adjust costs and profits over a decade? Did they just pluck out one year of data and say "that's what the profits we want to be making" if that year was a particularly prosperous year.
"fuel and labor expenses are higher now than before the pandemic.
“Spot rates are at a level that in the long run are not sustainable, with costs up by 25% to 30% since 2019"
We all speak English here and read the same article right? Shipping fees are back to prepandemic levels but operating costs are much higher.
Why doesn't that count as a crisis or as something worth reporting?
I wonder if the same folks asking for taxing away those profits are now saying these companies should be subsidized now that they’re losing money. (Kind of doubt it…)
If international trade declines, this could indeed tip the scales and give labor a stronger bargaining position across the globe. Less trade might mean fewer cheap imports and potentially more jobs for local industries. This shift could lead workers to demand higher wages and better working conditions, knowing that the globopatricians can't easily jump ship to cheaper labor markets.
The crisis is that their costs are now much higher but the going rate is the same so they’re now losing money.
A glut nearly always follows a shortage. Virtually every single time. So there is no contradiction at all in noting there was a severe shortage before but now there’s a glut.
I can’t wait for all the retailers who jacked their prices and advertised that it was directly due to shipping by rates to also now similarly advertise a massive drop in prices …
I agree here, some of these headlines are based upon the outlier effect of economic whiplash stemming from the pandemic -- hard to have economic models keep up. Now companies are returning to pre-pandemic activity, and apparently, it's a catastrophe... We should try postulating what was economically forecast prior to the pandemic boom-bust-whiplash.
That’s a pretty manipulative graph. Show the pre pandemic spot rates! From the article “ Box-ship operators were among the biggest pandemic winners. Orders for imported goods began to climb in 2020 …” so why doesn’t it show 2020 then?
Still, carriers are feeling the price drops for sure. But it is way less dramatic then it was during 2008 onwards. Those rates back then were close to unsustainable for carriers. They nice for the shippers so, but the days of up to two weeks without container retention fees are gone for good.
Looking at the exact same source as the WSJ graphic used, you can see it was quite cherrypicked: https://fbx.freightos.com/
From that source, the average rate in May 2019 was about $1350, and according to the most recent datapoint, it's currently at about $1450. In 2019 dollars (using CPI), that's about $1220.
Seems like it is down 10%, but that's not nearly as dramatic as the WSJ graph would make it appear.
Yes, seems the rates are exactly back to the same level they had been comfortably been sitting at for years before the pandemic: https://fbx.freightos.com/
Not saying that the article's framing is correct, but being at the 30y average does sound like a bad situation for shipping companies - they must have had some rising costs.
The medium is the message. If you were reading the print version, it likely wouldn't have an editorialized headline. Those are often changed in the 24 hours after publication. But ink is forever.
The shock of the onset and "anti"-shock of the fizzling of the pandemic must be the most dramatic economic experiment for some time.
Its like throwing a stone in a stagnant pond and watching the waves go up and down.
Except the economic fluid is far more complex, full of lags and hysteresis. E.g. shipping rates have gone down but not the costs (indicated as fuel and labor). Why not?
Nobody wants to leave a crisis go to waste (i.e. groups of people will try to maximize and make their monetary gains permanent) but there are restoring forces towards the underlying equilibrium supply and demand balances.
> Except the economic fluid is far more complex, full of lags and hysteresis. E.g. shipping rates have gone down but not the costs (indicated as fuel and labor). Why not?
It's much weirder. Economics is even fuller of anti-lags, ie clever economic actors are constantly planning for the future and anticipating. Eg if the Fed announces today, that they are going to run the printing presses red-hot next year, you'd already see inflation starting now.
That anticipation is why stock prices started to recover when we were still in the very middle of the pandemic. Contrary to popular opinion, investors are rather long sighted and forward looking. (They just don't always believe managers when they say 'trust me bro, our long term plan might lose money now, but it's totally gonna pay off anytime soon'; and that's why they demand regular quarterly profits from run-of-the-mill management, but let Bezos run Amazon for decades without anything in the way of dividends.)
> Contrary to popular opinion, investors are rather long sighted and forward looking
Contrary to popular opinion investors are a very inhomogeneous crowd: From real economy investors, like the shipping company that tries to anticipate long-term global economic supply and demand patterns and orders massively expensive ships that will only be delivered years down the line, to bloomberg types or crypto speculators or HFT algos, that basically just look at financial timeseries going up or down, detached from any economic, environmental or social reality.
To abuse the liquid analogy just bit more, the fluid is composed of all sorts of molecules. Heavy ones with lots of inertia but also lots of small scale noise. As things are, the incoherent noise sometimes turns coherent (hypes, manias and other delusions) and then the tail wags the dog (to finally switch metaphor :-)
I'm sure some are profiting handsomely, but as a whole the last 3 years has made business in general look pretty incompetent. They all seemed to zig when they should have zagged and vice versa. It makes you think the professionals are not all they're cracked up to be.
I know the pandemic was new and disorienting, but do these people have no contrarian instincts at all? They just look at what everyone else is doing and do that, lest they stand out and be singled out? If you're in a leadership position and you play the "everyone thought X so you can understand why I did too" card you should be fired.
Yes, the demand shocks of the pandemic restriction and easing of restrictions, combined with the bullwhip effect (https://en.wikipedia.org/wiki/Bullwhip_effect) have created a very interesting case study in industrial dynamics
Interest on excess reserves explains much of that change.
In the olden days of 2007, banks would only hold as many reserves at the Fed as they legally needed. They would instead invest any extra (or make their deposits less attractive, so that they have fewer excess reserves).
In 2008 the Fed started paying interest on reserves above the legally minimum (so called excess reserves).
Excess reserves parked at the Fed don't contribute to the economy, but are still counted in the Fed balance sheet.
You can see on https://fred.stlouisfed.org/graph/?g=15mr6 how the level of reserves at the Fed shot from about 0.050 trillion USD in 2007 to about 3 trillion USD today.
Refers to excess liquidity (which may have played a role in inflation but may also have saved the day from the deepest depression)
The anti-liquidists (also gold bugs or digital gold bugs) never came to terms with the fact that the human economy - like the human body - is mostly made out of water.
There is a goldilocks hydration level but its not a simple thing to identify as there are countless other complex things going on.
Some people reflexively blame everything bad that happens in the economy on the Fed's QE, usually because they're outraged by it though they have no reasoned justification for feeling that way.
It's like a conspiracy theory, except the "conspiracy" part is actually true (the Fed was exactly trying to create inflation), but the consequences are fanciful and legion.
It's a combination of the federal reserve both having bought lots of assets and also made a lot of money on the assets it's holding. It's a bit weird. The federal reserve made money on the assets it held in the 2008 crisis. (Buy low, sell high!)
You can say that borrowing from the markets is riskless for the Fed, because it can always pay back with the printing press.
But lending to the markets is still risky: because market participants don't have a printing press to help fall back on.
(In this case, the Fed often also bought some assets and later sold them; that's financially equivalent enough to lending that it doesn't make a difference here.
Especially if the assets you are buying and selling are bonds.)
There is probably some remote connection at the mathematical level but it is fair to say that the amount of "learning" happening in the economy is nowhere close to the amount of brain cells available.
Most of them will be fine, but probably a couple will consolidate or collapse. They'll start to delay or cancel new ships because who knows how long this will last, and we'll probably end up in an other crisis eventually if they all cut back too much.
> Putting the fifth-largest ocean carrier’s earnings into context, [their profit for the first three quarters of 2021 exceeded] its return from the whole of the past five years.
With all due respect, that appears to be cherry-picking. Why focus on the 5th largest company exclusively? Did the top 4 not have huge profit growth and fit comfortably into your narrative?
There's also the accounting profits that may occur due to something other than simple operations, for example, if the company bought long-term fuel futures, they may have been taking an accounting loss every quarter until oil prices blew up, and now that same contract, a result of financial engineering, delivers massive profit all at once.
Seems the gains were short-lived, according to the linked report ("shipping profiteers", yea no narrative there), the market caps from the report (sourced April 1, 2022) vs today, from the same web site. Just 13 months later, most down by about 50%:
It was the first article I found that specifically referred to profit numbers during peak pandemic. The shipping industry being quite fungible, there was really no need to continue digging given the point I was refuting.
If you were interested in the answer to your question about the top 4 companies and my “narrative”. You could have quite easily found that information yourself.
Every day the container ship is sitting outside port waiting to offload is a day it is not shipping goods, and I'm guessing a large container ship is a fairly expensive asset with a limited lifespan.
Cry me a river. CMA-CGM has made 40 billion € of profit in the past three years. I suppose Maersk and other large shipping companies are on the same boat (uh uh).
> CMA-CGM has made 40 billion € of profit in the past three years.
And it seems like they didn't do the responsible thing and set it aside in a rainy-day fund, but instead they and their competitors went on a shopping spree.
Honestly, the way things have went in the past, I'd say a maximum of three years before the first one whines and calls for government subsidies.
What'd they purchase? It's arguably better for some of that money to continue circulating in the economy vs being parked in investments and savings that essentially create money out of nothing, accruing interest or profiting from speculation. Of course it does make sense to do that with a portion, perhaps, but I wouldn't say "all". And I do share your disdain with government bailouts.
Shipping companies were giving 8-10 month salary bonuses last year because of the price boom they were enjoying. The supply and demand disruptions created a unique situation for them and now I think price are going back to normal.
Their plan to curtail inflation has always been demand destruction. Which means callous layoffs, unemployment, and misery for the workforce. We are just now seeing the effects, so expect it to get worse from here. We are a few more earnings misses, fumble of the debt ceiling, and another bank collapse away from a depression.
> callous layoffs, unemployment, and misery for the workforce
US unemployment is hovering around 50 years lows. Probably better to look at the actual stats rather than listen to the constant doom-peddling that comes from the media.
Yeah, when we see headlines about the big tech layoffs it's important to look at just how insane the hiring has been over the last few years. They monopolized much of the talent the last few years.
Is there a stat that tracks time to new job after a layoff? I'm betting most of those people found new positions very quickly.
US labor force participation rate is also at historic lows. A low unemployment rate only considers the active labor force. There aren't as many people working as a fraction of population as you think. Doom peddling and stats can line up.
You're seeing demographics at work, rather than the upthread theory of "demand destruction."
If you look specifically at the prime-age labor force participation rate (25-54 years, https://fred.stlouisfed.org/graph/?g=15nxN), the current figures match pre-pandemic highs, which in turn match the 2004-7 level (pre-financial crisis).
> US labor force participation rate is also at historic lows.
No, its not. It was at a local (but not historic) low during the deepest part of the pandemic recession, and has been recovering rapidly since, looking set to soon reach prepandemic levels and continue the upward trend that was general course since the post-2000 decline bottomed out in 2016.
> US labor force participation rate is also at historic lows.
Looking at the graph you linked it seems this historic low is the new baseline as it has not changed significantly since 2010 aside from a temporary dip in 2020 (gee, I can't imagine why that happened).
>> Their plan to curtail inflation has always been demand destruction
Callous or otherwise, demand was outstripping supply during the pandemic years. Supply could only increase if actual value could be exchanged to pay for it, but we were in a situation where not enough new value was created, and our currency inflated at the same time a lot of people demanded what was in limited supply. E.g., regardless how many inflationary dollars you were willing to pay for it, you still couldn't get a PS5. The supply has still not increased, because dollars are worth less (because everyone has more of them). So cutting demand by making dollars more expensive is the only rational decision. Anything else would be chasing a dragon down an inflationary spiral.
Tl;dr, not everyone can own the newest thing, (because there are fewer of those things than the dollars in circulation) and in order to make the value of dollars reflect that, you kind of have to chop down the demand side by making dollars more valuable / harder to obtain.
The opposite approach is exemplified by the well-meaning but catastrophic attempts over and over in countries like Argentina and Venezuela to fix prices on the supply side to enforce artificial value on an already inflated currency. It's a fool's errand.
When people say their dollars are worth less, the most obvious way to rectify that is to get other people to stop bidding prices up on shit they don't need which they're putting on credit. The only way to do that without further restricting supply is to make credit more expensive.
Guessing a huge part of the reason is that Western firms are pulling out of China bigly. Chinese manufacturing and exports are an underreported crisis, both down apparently in the double digits.
The supply chain internally there has fallen victim to their government’s response of Covid. And, the fact the labor can be at parity with Mexico in many cases now. I’ve been doubling down on Mexico manufacturing to avoid most of the delays.
Excellent question to which there is no easy answer.
There is no site available that can give a price for which you are sufficiently sure you are getting competitive rate for which the shipment will be actually performed in the time needed. None.
Closest you can get is inquire via some of the ocean carriers, 4PL sites, but you have to do this carrier by carrier and yet often you don't get comprehensive number.
Pricing in this industry is extremely opaque, indices quoted here are for the most part rough estimations, representing someone's hopes and dreams.
There's a YC startup, "Flexport", which was supposed to disrupt that. Their pitch: "Flexport is the end-to-end platform for global trade. Book, track and deliver freight shipments from factory floor to customer door." But if you go to their site, you don't see a price list. You get "Hi there ! Click here for a quote or to chat with sales."
Same as other freight forwarders.
Everyone in an public or private position of influence over the economy should be barred from running more than a 7-11 after the covid fiasco.
Anyone claiming there isn’t any evidence the production of necessities is a zero sum game from the perspective of the average person is a deluded fool.
Inflation deflates the public to stabilize and grow buying power of imaginary asset owners. It’s a viral game of make up a reason why a minority are free of real work keeping them breathing.
That would only be true if the solution was a debottlenecking of transportation points such as port loading/unloading. If the equilibrium solution was "volumes stagnated but people got priced out of goods because shipping was too expensive", then not so much.
The demand for shipping containers is driven by demand for goods which is driven by consumption which is declining because people do not have the money for imported goods. Many people are struggling just to make rent and put food on the table. Buying things imported from abroad is on the back burner. The spending power of the consumer, or lack, is why demand is down and supply up.
You seriously want to toss out travel spending as an indicator of how well things are going for the general population? Travel is a luxury, and rich people are not hurting yet. The people at the bottom of the economy ,your average walmart and target shopper, is who is hurting. Also, raw dollars is not a good metric for how much stuff is being bought. Sales in dollars can be way up, but the amount or quantity of goods can be flat or down when those goods are being purchased with a rapidly debased currency.
There are always struggling segments of the population, but travel is less of a luxury than it has ever been. I talk to and have gotten to know the people who work at the local stores I frequent, and I've been surprised by the number of them who want to talk about their recent travel.
>> goods are being purchased with a rapidly debased currency
cheaper goods re-base the currency. Cheaper goods is deflationary. There is no such situation where raw dollars buy more today and are worth less than they were yesterday; that would be an oxymoron. Of course dollars aren't a great metric for wealth, because they float around like any other fiat currency. But if your Big Mac Index buys you an extra Big Mac, whether because supply increased or demand decreased or shipping just got 90% cheaper, that's the opposite of inflation.
> goods are being purchased with a rapidly debased currency.
so you can check if the increase is caused by debasement by looking at the inflation; if the increase in sales dollars is higher than inflation, it means that the debasement isn't an explanation of the increase in sales figures.
It isn't very efficienct honestly. It is better to produce a lot of the little components ship those and then complete assembly at the destination. One it ensures jobs, two is prevents cargo from getting stuck in places.
Source production is not only more energy efficient but also a great way to increase profits in certain territories. Also it will balance much of the economy internationally.
