Global trade is shrinking, fast

[RedEarth]

By bsetser

It is hard to put lipstick on a pig.

China’s November trade data (a 2.2% year over year fall in exports; a 17.9% year over year fall in imports — see Andrew Batson of the Wall Street Journal) suggests that global trade is contracting quite rapidly. And since trade accounts for a rising share of global activity, it suggests that the global economy has stalled — and perhaps is contracting.

The fall in China’s exports suggests global demand is falling. And the fall in China’s imports on first blush seems larger than can be explained just by the fall in demand for imported components for China’s exports and sliding commodity prices: it suggests that Chinese domestic demand is quite weak …

http://blogs.cfr.org/setser/2008/12/10/global-trade-is-shrinking-fast/

[leveymg]

1. That means the US combined trade deficit is that much bigger.

Since we're China's biggest trading partner, this isn't really good news for us.

[Vincardog]

2. Could it be that China's poisoned products have killed off to many customers?

WE know the USA's trade policies have killed off too many jobs.

[HereSince1628]

3. I suspect China's fall in imports is related to summer oil prices

I imagine shipping companies got whacked on contracts for diesel fuel, which would have driven up import prices in China. What seems modest cost increases to us would slam Chinese working at 45 cents an hour pretty hard.

[DJ13]

4. it suggests that Chinese domestic demand is quite weak

Of course its weak.

China didnt have enough time from initially embracing capitalism to this bust to build any sort of middle class to act as a buffer in an economic crisis.

Their economic collapse will happen far faster than most dare to think as a result.

[Joanne98]

5. The dry bulk shipper stocks have jumped the last two days.

Sector Snap: Shipping stocks surge
Wednesday December 10, 12:26 pm ET
Shares of drybulk shippers rise on increase in shipping rates


NEW YORK (AP) -- Shares of drybulk shipping companies rose strongly Wednesday on signs that ships may be moving again and rates for the vessels are rising.

The Baltic Dry Index, a measurement of drybulk shipping rates on 40 major routes across the world, was up 12 points to 691.

The index has been bumping along at record lows in recent weeks as shipping rates plunged amid concern that demand for shipping could be weak due to the global economic downturn.

Wednesday's rise in the Baltic index helped boost shipping stocks even as one of the major companies, DryShips Inc., announced it was canceling a $400 million order to purchase four more drybulk carriers.

DryShips planned to buy the ships from companies controlled by its own chief executive, but it couldn't get bank financing and cited the decline in shipping since the deal was struck in July.

In midday trading, shares of Greek-based companies rose. DryShips gained $1.24, or 13 percent, to $10.69; Diana Shipping Inc. shares added $1.10, or 10 percent, to $11.60; Euroseas Ltd. added 55 cents, or 10 percent, to $5.85; and Navios Maritime Holdings Inc. rose 50 cents, or 20 percent, to $3.

Shares of New York-based Eagle Bulk Shipping Inc. added $1.62, or 27 percent, to $7.53; and New York-based Genco Shipping & Trading Ltd. rose $2.32, or 22 percent, to $13.02.

http://biz.yahoo.com/ap/081210/drybulk_shippers_sector_snap.html?.v=1

http://finance.yahoo.com/q?s=DRYS
http://finance.yahoo.com/q?s=DSX

Look at the five day charts.