Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

[Devonian]

SS, I know you are only trying to keep us all informed and forewarned etc, but no matter how much research I do on this I really cannot find anything that would suggest the collapse of the BDI would lead to a economic Collapse in the UK or EU, or even in China for that matter. It is all about the supply and demand of bulk carriers (not container ships - sorry!) and the following statement sums it up well for me:

".....The supply of cargo ships is generally both tight and inelastic—it takes two years to build a new ship, and the cost of laying up a ship is too high to take out of trade for short intervals, the way you might park a car safely over the winter. So, marginal increases in demand can push the index higher quickly, and marginal demand decreases can cause the index to fall rapidly. e.g. "if you have 100 ships competing for 99 cargoes, rates go down, whereas if you've 99 ships competing for 100 cargoes, rates go up. In other words, small fleet changes and logistical matters can crash rates..." The index indirectly measures global supply and demand for the commodities shipped aboard dry bulk carriers, such as building materials, coal, metallic ores, and grains......"


Also just like the container ships there has been an increasing number of bulk carriers added to the global, and this is coupled with reduced demand from China:

http://shippingwatch.com/carriers/Bulk/a...120996.ece