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In Other Words, Look at SEA, the Shipping ETF
By Chip Hanlon | February 02, 2011 | 12:30 PM | 0 CommentsTweet This
Bannered over at Seeking Alpha this morning is a very interesting collection of articles on the shipping sector:
As the creator of the index which underlies the only shipping sector ETF on the market today, SEA, it's certainly in my own interest to point out this collection of articles (see below for links). Still, the main point behind SA's feature of this section is valid: if you're looking for a sector that should offer very direct exposure to a recovering global economy, few groups are more cyclical-- or telling of the global economy's overall health-- than shipping. Generally speaking, shippers will beat you up in a down economy and reward you handsomely in an expansion.
In other words: if you're bullish, SEA is a holding to take a close look at, particularly since dry bulk rates have lagged the nascent recovery and fears of new tonnage coming online may be overblown.
The links to the four Seeking Alpha articles pictured above:
Why a Suez Canal Closure Would be Good for Shipping
DHT: The Silver Lining in the Shipping Cloud
Buy These Three Shipping Stocks
You'll notice that even though these articles recommend various shipping names, overall fear toward the group is evident. That makes the sector more interesting to me right now, and might make Seeking Alpha's featuring this group now look pretty savvy a little while down the road.
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Comments (0) | Related Topics » 1600 Wall Street | Shipping
Farewell, Rigs
By Chip Hanlon | January 28, 2011 | 12:14 PM | 0 CommentsTweet This
What a stunning effect Obama's "permitorium" is having:
More Deepwater Rigs Moved Out of Gulf of Mexico
The exodus continues...
... | | Comments (0) | Related Topics » Energy | 1600 Wall Street
Wow.
By Chip Hanlon | January 27, 2011 | 11:22 AM | 0 CommentsTweet This
Baseball Player Quits, Says "I Don't Deserve $12MM"
... | | Comments (0) | Related Topics » 1600 Wall Street
Sickening— Your Chart of the Day
By Chip Hanlon | January 25, 2011 | 6:27 PM | 0 CommentsTweet This
This chart from CNN/Money projects that in just 9 years, fully 92% of the federal budget of the United States could go to just 4 things: Medicare, Medicaid, Social Security and interest on the national debt.
Picture this: the entire American government as one big wealth redistribution engine.
Actually, you don't have to imagine it. Seriously, check out this truly awful imagery.
... | | Comments (0) | Related Topics » 1600 Wall Street | Bonds | Economy | Politics
East Vs. West on Clear Display
By Chip Hanlon | January 25, 2011 | 12:32 PM | 2 CommentsTweet This
Are there competing headlines that better tell the story of where our economic world is heading than these two from this morning?
While the Far East grapples with growth:
India Raises Interest Rates, Warns on Food Inflation
The West remains stuck in neutral, at best:
British Economy Unexpectedly Shrinks
What's sad is, we've done this to ourselves.
Sadder still is the fact that the root cause of our lack of competitiveness has yet to be accurately identified by those in power.
It's not our currency, nor the value of China's. For proof, just look at the 3-year collapse in the Greenback from 2002-2004 and the corresponding explosion in our trade deficit over the same time. Those screaming about the value of the Yuan as the cause of our woes simply cannot prove their case.
Nor is it our national debt. Certainly, we're on a collision course with demographic destiny if we don't restructure national entitlements and put them on sustainable footing, but even the Obama-enhanced level of our current indebtedness could be easily carried in a strongly-growing economy.
These things are the symptoms, not the disease.
What causes us to be wholly uncompetitive with the developing world are the suffocating regulatory burdens we force our producers to carry. Minimum wages, environmental laws, corporate tax rates, a runaway tort system, healthcare regulation, laws empowering unions over employers, a workers compensation insurance system dominated by fraudulent claims, state and national welfare burdens-- and this is merely a partial list.
Make a case for any one of these things as worthwhile public policy, if you will. But insist on all of them and a nation makes a conscious decision to literally give away its economy-- first the lower-wage, unskilled jobs and later, the rest.
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