Mermaid Marine completes Jaya takeover
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The Seven-Year Itch
Max Hong discusses shipping cycles and Marilyn Monroe
What is it with seven years, is there some kind of cycle? Over a very healthy dinner at the home of a good friend, a vegetarian, he tells me he is excited by the upcoming celebration of his seventh anniversary of becoming a non-meat eater. It is important, he says, because all the cells in a human body will be replaced over a period of seven years, meaning in his case that the last meat fed cells would be gone and his body will now be 100% veggie based. Nice, simple, clean conversion.
Where's the meat? Libido attraction that was empowered by one set of cells, evaporates down to zero and a new set of pheromones from another body sets us off. In the 1955 film The Seven Year Itch, a married man struggles with the temptation to run off with the young woman next door, played by Marilyn Monroe. Always something more hot… but we are in the shipping business and, of course, hormones and temptations play no part in our decisions. What about cycles?
Seven years, 2007 to 2014, what do we call this cycle? Of course, it was the financial crisis that began in 2007 when markets became exhausted by the steroids of cheap credit which boosted shipping in an orgasmic frenzy to heavenly charter rates and asset values only to plunge and shatter both the egos and balance sheets of many an industry titan. Like the conviction and commitment that accompanies the ‘mother of all hangovers’, banks, owners and every one else in the shipping ecosystem swore that these excesses would never be repeated.
Until the next time, that is until asset values get so low and newbuilding prices recede with hungry yards willing to "do it for cash flow". For a few years it looked like sobriety and balance were returning, the pace of newbuildings subsided, orderbooks contracted, ships got scrapped and it looked like a new normal of supply and demand health, but then came the renewed surge of China stimulus, coupled with the &ls; ... More>>