Done in by Overcapacity, Stagnant World Trade, and China, Korean Shipbuilders Collapse on Top of Taxpayers

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Orders plunge 87% from an already terrible 2015.

The ravaged shipbuilding industry in South Korea, deemed too big to fail, is getting its largest taxpayer bailout yet, totaling $9.6 billion, on top of the bailout funds already handed out last year, and on top of another $9.6 billion this year to bail out state-owned banks that were getting slammed by defaulting loans extended to the shipping industry.

Their problem: according to trade ministry, cited by the Wall Street Journal, orders for new ships to be built in South Korea have collapsed by 87% over the past nine months from the already terrible 9-month period last year, to almost nothing.

South Korean container carrier Hanjin was allowed to collapse in August. It “shattered the complacency” that TBTF carriers “are immune to failure.” It is now getting chopped into pieces to be sold off under bankruptcy court orders. Its rival, Hyundai Merchant Marine, was bailed out and restructured earlier this year. Other carriers around the globe have been sunk by two years of excruciating low shipping rates, triggered by rampant overcapacity and stagnating world trade. Larger carriers are consolidating to survive. Just on Monday, Japan’s Big Three – Nippon Yusen, Mitsui O.S.K. Lines, and Kawasaki Kisen Kaisha – announced that they would merge to form the world’s sixth largest container carrier.

These carriers have stopped ordering ships, and many have canceled orders, and Chinese shipbuilders have muscled into the market years ago to grab share by slashing prices, and they too are going bankrupt.

But the shipbuilding industry is special to South Korea, a country whose economy depends on exports. The world’s three largest shipbuilders by erstwhile order volume are Korean: Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering, and Samsung Heavy Industries. In 2015, the industry accounted for 7.1% of South Korea’s manufacturing jobs and 7.6% of exports.

The beleaguered Big Three have already sold noncore assets and sloughed off employees as part of prior bank-led restructuring plans.

They’re dealing with terrible economic dynamics. Global orders for ships peaked in 2007 at over 90 million compensated gross tonnage (CGT), of which about one-third went to Korean shipbuilders. Orders crashed during the Financial Crisis to a low of 18 million CGT in 2009, then recovered. In 2013, orders maxed out at 60 million CGT, still down 33% from the prior peak. Those were the good times.

In 2016 so far, orders have collapsed to only 9 million CGT, according to the Wall Street Journal. That’s about half of the orders during the worst part of the Financial Crisis. And South Korea’s share of this pittance in orders has fallen from one-third to just a tiny sliver.



So on Monday, South Korean Finance Minister Yoo Il-ho announced another big bailout program: to help the shipbuilding industry deal with the “order cliff,” the government would directly order vessels and also provide financing for shipping companies to order vessels. In total, this would generate orders for 250 vessels through 2020, valued at 11 trillion won ($9.6 billion) funded by the government.

But these ships won’t be the big traditional money makers, such as large containerships and dry-bulk carriers, of which the world is already vastly oversupplied. Instead, these will be vessels for the fishing industry and for small shipping companies, along with ferries, patrol boats, warships, and coastguard vessels. The hope is this will carry shipyards into the next glory period, when world trade and shipbuilding would resurge.

For now, the government is hoping to keep the Big Three shipbuilders alive. They will have to shed 32% of their workforce by 2018, cut their operations by 23%, sell more noncore businesses, and take other measures.

This bailout comes on top of prior bailouts, including the one of Daewoo Shipbuilding & Marine Engineering in October 2015, when the state-owned Export-Import Bank of Korea and the Korea Development Bank (which already owned a controlling 31.5% stake) handed it a $3.7-billion bailout package of new loans, a rights offering, and debt-to-equity swaps.

The South Korean shipbuilders weren’t just sunk by the collapse of the global shipping industry, but also by their expedition into new territories: Seeing over the years that orders for big vessels would be heading south, and that prices were under pressure from competition in China, they decided in 2010 to get into the nirvana of profits: building offshore oil rigs. But that turned into a nightmare, and heavy losses, even before the price of oil crashed.

In June, the government and the Bank of Korea set up a special fund of 11 trillion won ($9.6 billion) to recapitalize state-run banks which were getting hit by defaulting loans from carriers and shipbuilders.

In addition, the finance ministry said the government would offer 6.5 trillion won ($5.6 billion) for South Korean carriers to order new bigger vessels to improve their profit margins and survive a little longer. And then there are plans to create a state-backed ship-financing company with initial capital of 1 trillion won ($880 million).

No one knows for sure how long the misery in the shipbuilding and shipping industries will continue. Overcapacity is a terrible condition. Creating it benefits many on the way up. It enriches them and makes the economy look good. But when it comes home to roost, the price is stiff. People lose their jobs. And many of the costs will be socialized. It’s only then that you see just how much capital has already gone down the drain, and how much more will follow.

The pain will continue, with many more false-hope-ups and brutal smack-downs, and more carriers will crack under their debt. Read…  Why Hanjin’s Zombie Collapse Won’t Be the Last One



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  48 comments for “Done in by Overcapacity, Stagnant World Trade, and China, Korean Shipbuilders Collapse on Top of Taxpayers

  1. Chicken
    November 1, 2016 at 2:57 pm

    Nobody saw overcapacity around the corner, or they did and meanwhile spread misinformation while unloading their position.

  2. NotSoSure
    November 1, 2016 at 3:12 pm

    @Wolf, pay attention also to Singapore https://sg.finance.yahoo.com/news/singapore-inc-faces-12-bln-230001670.html

    “We had not seen Singapore dollar corporate defaults since 2009, but suddenly we see a pick-up in defaults in 2015-2016. This is a warning sign about a refinancing confidence crisis across many sectors, not just commodity-related ones,”

    Singapore is really the canary in the coal mine. The PM is probably the only one in the region who keeps pushing for TPP. He probably knows that Singapore, Inc is done if that deal does not get signed.

  3. Nik
    November 1, 2016 at 3:27 pm

    So…I suppose the Koreans are Playing little Attention to,or Ignoring the Chinese establishment of the ‘Silk Road railway System’…..? lololol

    • George
      November 2, 2016 at 12:11 am

      NIK, You hit it dead on, but didn’t take it all the way.

      The new “silk road” will unite the entire Eurasian land mass from Pacific to Atlantic. A death knell for any maritime economy – think US. Seaborne commerce will be a fraction of what it is today as every thing ships from China to Europe overland on the world’s largest contiguous landmass. By the time maritime shipping/shipbuilding rebounds the silk road will be starting operations.

      Meanwhile, the US and some other maritime nations (Britain, Australia, etc.) depend on seaborne commerce through “sea gates” controlled by potential enemies – – think Malaccan Strait and S. China Sea controlled by China. Panama Canal, Hormuz, Gulf of Aden Bab El Mandeb Strait and Suez Canal controlled (or to be controlled) by Iran.

      America could survive by having our landmass from Canada to Argentina united by agreements and trading together.
      Monroe had it right 200yrs ago. Unfortunately, we have neglected and pissed off our southern neighbors.

      The future geopolitical consequences of the the building geo-economic crisis will be catastrophic for maritime dependent nations.

      A new world order is coming – but not the one G.H.W Bush and the elites anticipate.

      • d
        November 2, 2016 at 12:18 am

        Unless it is solar powered rail freight will never be more economic than non urgent sea freight.

        Before you get into the multiple thousand TEU arguments.

        china is deliberately glutting maritime shipping capacity, so its state supported industry’s, can take over world maritime shipping.

        He who control’s the ships controls the trade.

        This is war without bullets, as people like you cant see it, they wont fight it. So they will loose it.

        • Tom Kauser
          November 2, 2016 at 12:35 pm

          Considering how little Christmas stuff that big blue box retailer down the street has in inventory, its not just China manipulating the future?

        • OutLookingIn
          November 2, 2016 at 12:45 pm

          Agree.

          The US deep sea merchant marine fleet continues to dwindle and is in danger of disappearing altogether.
          Case in point is “The Matsonia” a Matson line container ship that is mothballed in the Port of Oakland for years now.

          As a footnote, “The Hanjin Scarlet” has finally been allowed to off load after being stranded on Canada’s west coast since August 30th.

          http://www.cbc.ca/news/canada/british-columbia/hanjin-scarlet-prince-rupert-bankruptcy-1.3743737

          Global trade stagnant? Catastrophic collapse is more like it.

        • Nik
          November 2, 2016 at 1:25 pm

          Aloha Friend…with due respect…urgent or non-urgent goods,which can be received More Quickly at reasonable Cost would always be Favored..correct? Its the perceived ease and time frame involved in shipping over the entire Eurasian landmass that ‘Economically Empowers’ the entire Concept. Also,may I remind you of the interesting consequences of the Berlin to Baghdad railway system in the Last century…lolol thanks for reading,aloha

        • d
          November 2, 2016 at 8:37 pm

          Longest train in the world to set a record, 4 miles.

          Normal long train 1.5 miles

          Average contents of 1 super container carrier. 9 miles +

          more than 1 leave the chines coast, every day.

          There is a place for a Beijing to Berlin and Moscow, rail link.

          Its about Ego and moving things along part of the link so promoting trade between points along the link. More than anything else.

          I worked in both Industries.

          Rail can not, and will not, efficiently replace, bulk Maritime freight.

          Rail can not even compete efficiently against coastal, non urgent Maritime freight.

          Bulk Urgent freight, is more likely to go by road, than rail, as almost everything that goes on rail, also goes on a truck, at least twice in its journey, as it has to be moved, to and from the rail.

          This is all based on nothing being subsidized.

          Simple.

        • Dan Romig
          November 2, 2016 at 2:00 pm

          WW I was in large part caused by the control Britain had over the world’s high-seas lines of supply.The Germans had superior metallurgy, technology and new inventions- the submarine and airplane. High quality steels were being created at a remarkable advancing pace, but getting metallic elements such as manganese from southern Russia was controlled by the British Empire and mine owners. Germany sought to take control of the line of supply from Britain.

          Buckminster Fuller’s ‘Critical Path’ page 81, spells out the behind-the-scenes power structures that inevitably collided into war, and of course, J.P. Morgan was the fiscal agent for Great Britain and her allies. Some things really never change.

  4. walter map
    November 1, 2016 at 4:04 pm

    Massive bailouts are provided on the assumption that it’s better to try to stay obese than to go on a diet. If they had kept their weight under control they wouldn’t have these problems, but that would contradict the nature of gluttons. To be sure, feeding a glutton doesn’t solve anything but it always seems to be the policy of corporatist states that are run by the obese.

    I could have a lot of fun with this analogy.

    • Chicken
      November 1, 2016 at 6:27 pm

      Climate change will stop them in their tracks.

  5. November 1, 2016 at 4:15 pm

    Reality [over-capacity] always wins in the end, whether its automobiles, wide-body aircraft, or ships, although it may take down governments and even states, if it is defied long enough. Big question is when does the grossly over-capacity financial sectors get theirs?

    • Mike Earussi
      November 2, 2016 at 5:05 pm

      Depends on how many politicians they have in their pocket.

  6. Jerry
    November 1, 2016 at 4:31 pm

    Wolf I love your blog.

    So many different specialized economic issues that the main stream media do not cover.

    What I love the most is the articles that you cover attracts folks from all round the world and what impresses me the most is they seem to be quality intellectuals. I have followed your blog for many years and I can not think of a time when folks that comment here start arguing with each other that ruins so many comments sections.

    You should be very proud to run a blog where people come here to share their experiences and knowledge without descending into a slinging match which ruins it for everybody.

    Well done Wolf.

    • November 1, 2016 at 4:38 pm

      THANK YOU, Jerry!!! And to all our readers and commenters: thank you for coming here and making this possible.

    • IanCad
      November 2, 2016 at 4:02 am

      I’ll second that Jerry,

      Wolf’s blog has become one of my – almost – daily fixes of reality.
      Makes me sit up and take notice; even kicks me in the pants sometimes; as in the recent post on EV’s.
      Well written, concise, no patronization. Only Americans can write thus, no frills or beating about the bush. Nail on the head every time.

  7. Brad
    November 1, 2016 at 5:20 pm

    Wolf, cold you start an educational page with an acronym sheet and descriptions of of items that a novice would need to come up to speed. This is good information.

    • November 1, 2016 at 6:32 pm

      If you come across an acronym in our articles that you’re not familiar with, and I used it without explanation, it’s my fault. So please ask, and I’ll explain it. Other readers will welcome it too.

      I usually use the full words of the acronym once in the text and then start using the acronym, but I might forget, or I might take the acronym for granted. So don’t hesitate to ask.

      There are too many acronyms for me to list them on a page. There are entire acronym dictionaries out there, and even they don’t have them all. Acronyms are the bane of the modern world, corporate and government speak in particular.

      • d
        November 1, 2016 at 11:26 pm

        “Acronyms are the bane of the modern world, corporate and government speak in particular.”

        Entity’s like the Eu and the finance industry in Particular. Keep on inventing new ones, to replace existing ones, and concepts, so that people have no idea what they are talking about.

        The Military uses a large number of them, however once initiated. They tend to remain. Until retired (MACV) U.S. Military Assistance Command, Vietnam.

  8. Paid Minion
    November 1, 2016 at 6:08 pm

    Oversupply. Low and falling demand. Pretty much the story wherever you look.

    Even the “high end” jets are starting to tank. The 2008 recession put a giant hit on the “Mid-size” and lower jets, and has shown no real signs of recovery. Demand for the “high end” jets (Gulfstreams, Challengers, Global Express, Falcon 900 and 7X) held steady for a while, but have been tanking since the oil price collapse. Gulfstream 550 prices are dropping like a rock. Even the newest crown jewel is showing stress (Rumor control reports that companies are taking big financial hits to get out of their G650s).

    And the mythical, unicorn-like “demand from the Chinese Market” hasn’t materialized. (And never will, if you can read history…………as if the Chinese are going to let rich people have the means to GTFOO Peking/Shanghai with big sacks of money).

    Seems that there are only “x” number of people that can afford these thing, and in a deflating/no growth worldwide economy, that number isn’t getting any bigger

    It’s depressing. I’d damn near bet my life that the S will really HTF in the next 18-24 months. And I can’t figure out a way to make a buck off the chaos.

    • MC
      November 2, 2016 at 1:58 am

      Manufacturers of high end jets have been desperately trying to unload their products upon hapless taxpayers by pitching them as “surveillance aircraft” despite the fact they have to compete with UAV’s which as surveillance platforms are just… better, really.

      Problem is that just like there are so many billionaires who can afford a Gulfstream or a Global Express, there are so many air forces and coast guards that can afford buying these things. The saber rattling in Eastern Europe has not translated in the promised big increases in NATO defense budgets and the Germans are grounding aircraft like there’s no tomorrow to save money.

      Personally I believe 2008 was as good as it was going to get for executive jets: demand will always exist (at least until we invent the teleporter) but that was the high water mark.

      • d
        November 2, 2016 at 2:12 am

        “https://www.bloomberg.com/news/articles/2016-11-01/billionaire-s-goal-for-supersonic-private-jet-hits-engine-snag”

        And they seem to be selling them, off plans, in a shrinking market, perhaps all those subsonic ones, just dont cut it any more.

      • walter map
        November 2, 2016 at 6:20 am

        NetJets wasn’t one of Buffett’s better ideas. He should stick to what made him rich: insider trading.

        • Woodrow
          November 3, 2016 at 6:38 am

          What’s wrong with NetJets?

  9. d
    November 1, 2016 at 6:28 pm

    Whats happening in Korea, shipping Etc is caused by State supported unfair competition from china.

    china either wins and owns it all, or has the same negative experience x 100? 1000?

    http://www.bloomberg.com/news/articles/2016-11-01/china-seeks-to-export-power-amid-signs-it-built-too-many-plants

    So divert and dam all the rivers that flow into those neighboring country’s then force them to buy the energy generated by, and water from those rivers, and dirty coal production, from you.

    That sort of activity. Historically starts wars, BIG ONE’S.

    • Chicken
      November 1, 2016 at 8:48 pm

      Store the power in large batteries that everyone’s so fond of and export via all those ships they overbuilt.

      • d
        November 1, 2016 at 11:33 pm

        Read the article you will see how they intend to export it, to the people, they have effectively stolen it from.

        There is another article showing all the rivers the chinese are diverting and damning that supply water to: Pakistan, Indian, and the whole of Indochina.

        Over 50% of the crop salinity issues, developing in the Mekong delta, are due to chinese diversion of tributary’s to, and damming of, the Mekong.

    • Jonathan
      November 1, 2016 at 9:23 pm

      Yup the Germans were protesting along similar veins not just long ago. Global trade in its current form is nothing but extreme protectionism from China. Expect even more of this crap from China directed outwards when their own domestic economy gets increasingly destabilized.

    • MC
      November 2, 2016 at 4:36 am

      Actually China resembles the USSR on a gigantic scale.

      I am sure I am not the only one who remembers that for decades the USSR was the main supplier of refined titanium, at least until Japan invested major money in it at the end of the 70’s.
      That oversupply of titanium was driven not by demand, either domestic or foreign, but by cryptic calculations carried out by bureaucrats in Moscow that predicted in five years demand for titanium would treble. So orders just came down from the Kremlin to build titanium extraction and refining plants so as to at least treble present capacity.
      This led to the Soviets giving titanium away for a fraction of what it cost on the open market, including selling it (through intermediaries) to Lockheed to build the SR71 Habu which ended up driving the Kremlin wild. But that’s another story for another day.

      China is a mix of control economy and private enterprise but, ultimately, it’s the State that decides economic policies thanks to calculations that are probably close relatives of those carried out in the USSR back in the 60’s.
      If Beijing sees that demand for, say, glass panes is bound to increase 25% in five years, it does not merely instruct State-owned firms to increase capacity, but instructs bank and local government officials to help private firms increase glass pane production.
      This similarity extends also to demand stimulation, the chief difference being the Soviets were third rate amateurs compared to the Chinese.

      When the bureaucrats in Moscow saw they had a lot of titanium capacity to spare because, plainly put, the demand was not there, they tried creating their own through a variety of schemes, such as building titanium-hulled submarines.
      Again, compared to our Chinese friends the Soviets were amateurs, as they poorly understood export markets despite first class intelligence, and the tightly controlled nature of their economy did not allow them to build a housing or car bubble as we intend them.

  10. Edward E
    November 1, 2016 at 8:02 pm

    No relief in sight, Harpex shipping index levels are going closer to where they were during 2009 “Great Recession” now just 44 points above.

    http://www.harperpetersen.com/harpex/harpexRH.do?timePeriod=Years10&&dataType=Harpex&floatLeft=None&floatRight=None

  11. Northwest Resident
    November 1, 2016 at 9:18 pm

    To reverse this trend we’re going to have to see some real organic economic growth. To get real organic economic growth, we’re going to have to find more resources to exploit — then mine, process, ship and distribute to happy consumers. To find more resources to exploit, they’re going to have to figure out interstellar travel because we’ve basically strip-mined earth of the economically extractable raw materials, oil/energy most notably. In other words, I think we’re going to be seeing a lot more problems cropping up around the world very similar to those North Korea and their shipping icons are dealing with. If you ask me, it is all leading one direction — down, with no end in sight.

  12. John Doyle
    November 1, 2016 at 10:44 pm

    This is not a temporary position!. It’s highly unlikely to turn around. It’s not just deflation, it’s recession, and with depression next in line things are just becoming grimmer every day. We are finally starting to show that living on credit is a very finite option, especially in a finite world.
    I think the economy is running out of resilience and there will be a cascade of bad news to follow.
    I don’t recall a single blog of yours with good news, Wolf. Do you?
    Are you the canary in the coal mine?

    • November 1, 2016 at 11:37 pm

      Lots of good news. Just depending on what side you’re on. EVs, rents coming down in some cities (bad news for landlords, good news for renters). Commercial RE peaking, house prices peaking in some cities….

      If the stock market crashes, it’s good news for those with enough liquidity to buy. If bonds crash, it’s good new for future buyers because they’ll get a decent yield. Etc., etc.

      There are two sides to almost anything. That’s why I don’t buy into this theory that a recession or a credit event will cause the earth to go down in flames. If a recession or credit event, such as a financial crisis, is allowed to play out, it will cleanse the system off the excesses, and the economy will work better afterwards.

      • John Doyle
        November 2, 2016 at 12:07 am

        Sorry, that scenario you post is illusory. The world is finite yet we pretend to grow exponentially. Already we are at 1.6 Earths. Resources will become, are becoming the major problem, not money. There is no way the economy can work better afterwards. We are crashing already and by now ordained to destroy the industrial dynasty we used to get the wealth we have, but cannot continue to have.

        • November 2, 2016 at 12:16 am

          Many countries have already figured that out long ago. Hence population declines in those countries. It works fine. Nothing wrong with flat GDP or declining GDP if per-capita GDP is going up. If everyone’s slice of the pie is growing, because the shrinking pie gets cut into fewer slices, guess what: life is good! That’s what matters. And a credit event, if allowed to play out, will take care of the debt that cannot be paid … so some adjustments, sure. And some people will lose a lot of money, pensions, etc. But hey, that’s what you get when politicians make promises that cannot be kept.

        • John Doyle
          November 2, 2016 at 1:20 am

          Populations decline because women get to choose. But not everywhere can they do that and we get a new population equivalent to Germany every year. They also need affluence to be able to choose too, and we cannot do that. The USA still uses 25 % of the world’s resources for 5% of the population. It just cannot last. The IMF forecasts yearly growth at abt 3.5%. That means we will double the world economy in 20 years and double means double the human world entire production back to the stone age. Another no can do. What you suggest is super short term stuff. I’m not sure even that will work out but we’ll know soon enough!

        • Northwest Resident
          November 2, 2016 at 1:17 am

          The key issue today, one that is not widely recognized, is rapidly declining energy. Every year we burn vastly more oil than can be replaced. With oil at such “low” prices (relatively speaking), oil companies can’t afford to invest in development of new oil fields. We are not replacing the oil that we are burning, not even close, and the world is almost entirely dependent on legacy oil fields all of which on average have been in decline for many years already. Saudi Arabia’s once great oil reserves are more than 90% depleted, and still producing only with the aide of very expensive and energy-intensive technologies. Fracking has been a debt and hype-fueled losing operation from the very beginning, though a few sweet spots did very well. The oil industry is dying and with it, the entire global industrial economy. When the stock market crashes and burns this time, pensions and insurance companies and banks will go bust along with entire swaths of economic activity. The correlation between energy growth and real organic GDP growth is explicit. We are at the tail end of the age of oil, and by extension at the tail end of modern industrial civilization. There will no doubt be a lot of oil remaining after the upcoming bust, but the economy to produce and consume that oil will cease to exist for the most part. Big changes are coming.

        • John Doyle
          November 2, 2016 at 1:24 am

          I agree, I just didn’t want to make a whole essay about it. Tim Morgan illustrates well the problem with expensive energy and how even as GDP rises the benefits shrink;

          https://surplusenergyeconomics.wordpress.com/2016/10/30/80-grossly-distorted-prosperity/

        • d
          November 2, 2016 at 1:54 am

          “The key issue today, one that is not widely recognized, is rapidly declining energy.”

          Try overpopulation then you may have the root issue.

          The world population has more than tripled since 1945. That is long term untenable. On a finite planet.

        • Dan Romig
          November 2, 2016 at 6:20 am

          I agree with Northwest Resident. As I posted a week or so ago, Louis Arnoux has an interview on YouTube where he assesses the state of global oil production – and it ain’t pretty.

          We are, in his estimation, fourteen years away from the tipping point where it will cost as much energy to extract and process a barrel of oil as that barrel yields; then, game over.

          Humans will make the transition away from fossil fuels to be sure, and we are seeing this occur now with wind, solar and other sources of energy coming online, but in twenty years will we see the diesel powered behemoths transporting freight across oceans?

        • d
          November 2, 2016 at 6:39 am

          “but in twenty years will we see the diesel powered behemoths transporting freight across oceans?”

          Those engines were originally designed to run on peanut oil.

          Bulk carriers can be, are in service on, and are being built to run on, LNG.

          In stationary continuous operation, LNG work’s well.

          Bulk carries can also be built, or converted to run on, gas fueled, combined cycle systems.

          The only reasons many run on bunker, or low quality diesel, is that it is cheap, there are plenty of other viable option’s.

          With the coming (Long overdue) Maritime sulfur emission reg’s. Bunker/High sulfur diesels day’s, are numbered anyway.

        • Tom Skowronski
          November 3, 2016 at 2:08 pm

          I agree. Read some of Gail Tverberg’s work at https://ourfiniteworld.com/. She shows a graph of GDP vs. energy consumption that is interesting. GDP growth follows it precisely.

          Another thing that always bothers me is money creation. According to what I read, money is created by the issuance of a debt since it is a fiat based system. This debt is repaid with interest. In order to repay the interest the economy has to grow and use more resources but we live in a finite world. Why do the financial geniuses think that this system is sustainable?

      • Tom Kauser
        November 2, 2016 at 1:02 pm

        Your just looking for a risk free trade?
        You don’t have the chops to fight the federal reserve and
        25 trillion in debt.
        20 trillion is what the fed let’s you keep so you don’t complain about them taking 5 trillion out to party in Europe?
        That 5 trillion will have to be bought back from the fed (directly by the citizens) or next time its 10 trillion!
        The amount BUSH promised the financiers who bailed us out in 2008!

  13. Robert
    November 1, 2016 at 11:26 pm

    Well it will be interesting to see if Korea follows the lead of many others, the European Union, U.S., Canada, Australia, New Zealand and have a plan of government austerity to appease the true holders of wealth. Korea being a monatary sovereignty can pay their bills.

    • Intosh
      November 2, 2016 at 10:56 am

      Isn’t it “funny”? Collectivism saves Capitalism (again) and will suffer austerity in its place.

  14. realist
    November 2, 2016 at 2:32 am

    I wonder when the cruise industry will hit a wall. The cruise lines keep ordering new and fancier ships although some day they too must be facing overcapacity. What will then happen to older ships and the shipyards supplying those fancy ships ? Maybe something for Wolf to look into ?

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