Article

2006-12-12 China-Japan-Koreas

Archived material is restricted to Rantburg regulars and members. If you need access email fred.pruitt=at=gmail.com with your nick to be added to the members list. There is no charge to join Rantburg as a member.

Posted by Chugum Theagum6321 2006-12-12 00:06|| || Front Page|| [4 views since 2007-05-07] Top

#1 Competition is good. Darwin thought well of it.
(hat tip Robert Heinlein)

Posted by gromgoru 2006-12-12 00:48|| 2006-12-12 00:48|| Front Page Top

#2 He may be correct. There are mountains of these containers everywhere. And, yes, it's the the major banking entities behind the "globalization". Thye make their cut no matter what. And, they have no respect for nation states.

Posted by SpecOp35 2006-12-12 01:46|| 2006-12-12 01:46|| Front Page Top

#3 interesting..seems to me the # and $ handlers need a little more crunching.

Posted by RD 2006-12-12 03:03|| 2006-12-12 03:03|| Front Page Top

#4 He may well be right about the Bank lending ponzi scheme. I used to to work for an Asian bank and know their lending policies, probably the best in Asia, didn't account for value of an asset in a location.

Otherwise, he doesn't understand market economics. Just because an asset costs and is worth $6,000 in a particular place, it doesn't follow it is worth $6,000 or any other amount in a different place. The key equation is the cost of the container and the cost of shipping it to it's place of manufacture/original use. If the cost is more then it makes economic sense to just let them pile up at the point of deliver (and then scrap them).

Posted by phil_b 2006-12-12 03:34|| 2006-12-12 03:34|| Front Page Top

#5 Phil, you accusation that the guy doesn't understand market economics is off base, and your comment about the value of an asset versus its cost is exactly at the foundation of the argument: The Ponzi scheme he's talking about relies on the fact that the value of the shipping container is worth $6000 WHERE THE LOAN WAS MADE, and it is THAT value of the container that is used to compute the value of the collateral against which the loan is made, AND the value that is carried on the books to balance the outgo of the cash in the form of the loan.

Just because an asset costs and is worth $6,000 in a particular place, it doesn't follow it is worth $6,000 or any other amount in a different place.

EXACTLY the guy's point: this particular asset is a SHIPPING CONTAINER. It's FUNCTION is to be relocated to a different place. The moment it gets there, its REAL value changes to that location's value based on the market decision of make or buy or ship to different place to sell it. Because there are a LOT of containers piling up here, at some point it would be cheaper to buy them from here at less than $6000 than make them.

However, the REAL value of an asset is indeterminate in a quantum-mechanical sense: it is computed ONLY when an attempt to SELL it is made. That happens when "Ponzi" skips out and tells the bank to recover their loan by selling the collateral put up against the loan. At that point in time, "economic sense" changes polarity, from "how much can I GAIN from selling this asset" to "how much can we avoid LOSING on this loan?" Banks don't want cars, houses, land, or shipping containers: they want CASH, BOTH from principal and interest. The interest payments merely lull them into a sense that the loan is still good. When they stop is when the pain begins.

The best way to force the termination of the scheme is for the shipping yards to CHARGE for storage of the containers at their yards after 30 days. Those who don't will find themselves unable to receive new shipping if they can't space to put the new containers because its being taken up by the old ones.

Posted by Ptah">Ptah 2006-12-12 09:14|| http://www.crusaderwarcollege.org]">[http://www.crusaderwarcollege.org] 2006-12-12 09:14|| Front Page Top

#6 But, Ptah, that too is what he is saying. These containers are NOT stored at the ports. They are stored wherever they are destined. Shipped into Seattle, Long Beach, etc., but they only sit there long enough to be hooked up onto the trains. Then, the containers are taken inland (by 1000's of miles in some cases). They will NOT pay to ship that empty container back from OK, KS, NE, SD, ND, etc. to the coast to "re-ship" with our goods. So, they sit there rusting in OK City, Kansas City, etc.

Posted by BA 2006-12-12 13:09|| 2006-12-12 13:09|| Front Page Top

#7 Every ~~traffic~~ transportation managers nightmare. Too many empties too far away.

Posted by Shipman 2006-12-12 16:41|| 2006-12-12 16:41|| Front Page Top

#8 So where are all these "spent" shipping containers?

Posted by Anguper Hupomosing9418 2006-12-12 17:39|| 2006-12-12 17:39|| Front Page Top

#9 We've several thousand here in Mobile, there's a huge storage yard beside I-10 with a clearly visible huge sign selling them for $2000-5000 depending on size.

About 6 months ago my brother wanted one to store things while he reroofed and rebuilt his garage/storage building, and there were none available, we were told that Wal Mart had bought all they had to ship things around internaly (USA) after Katrina. So they are being resold and reused.

Since then they have some more to sell. I personaly was thinking about getting three, possibly four and welding them together and using them as an underground home (Concrete encased) it seems about the cheapest I could build a home for, figure around 30 grand, mostly for concrete and haulage/excavation.

So there is a resale market, although Katrina caused this surge, what happens when Wal Mart keeps on reusing them internaly, seems to me that's a far better use than trying to ship them back to China.

Posted by Redneck Jim 2006-12-12 19:54|| 2006-12-12 19:54|| Front Page Top

#10 Once buried, the things would make decent "instant" bombshelters.

I'd also like to see a tariff imposed that forces these assets back into the hands of the sponsoring entities. If shipping costs included a round-trip performance bond of some sort, suddenly all this cheap crap that China floods our markets with wouldn't be so cheap anymore.

This is just one more example of how the Chinese subsidize predatory marketing practices at the cost of our domestic manufacturing and employment.

Posted by Zenster">Zenster 2006-12-12 20:59|| 2006-12-12 20:59|| Front Page Top

#11 The Ponzi scheme he's talking about relies on the fact that the value of the shipping container is worth $6000 WHERE THE LOAN WAS MADE.

Let's throw some elaboration here. Say there's a Chinese shipping company. Let's call it Chinois Blow Chow (CBC).

CBC needs 10,000 containers. But it doesn't buy the 10,000 containers. That falls to wholly-owned subsidiaries, say, CBCC(A), in Seattle and CBCC (L) in London. (It's not farfetched; every shipping company I've dealt with had each ship set up as its own corporation, who then 'hired' the parent company to do all the administrative work).

CBCC(A) and CLCC(L) cut a deal for 5,000 containers each at $2,500/container. BCC(A)and CBCC(L) get financing for them at $6000 each, then lease them to CBC for a modest amount. CBCC(A) and CBCC(L) pay CBC for 'delivering' the containers. The amount is near the difference between $2500 and $6000. CBC also likely collects a subsidy from the Chinese government.

Hence the Ponzi scheme.

Posted by Pappy 2006-12-12 21:37|| 2006-12-12 21:37|| Front Page Top

#12 I can think of lots of uses for the containers, at the right price. Prison annexes. Shipping illegal aliens south. Storage units. Hurricane shelters.

Posted by Glenmore">Glenmore 2006-12-12 22:42|| 2006-12-12 22:42|| Front Page Top

#13 I am curious about the legal status of the containers. Presumably they are simply abandoned when they are unloaded, hence Wal-Mart flogging them off in Mobile and elsewhere.

Posted by Grunter 2006-12-12 23:32|| 2006-12-12 23:32|| Front Page Top

23:58 anymouse
23:46 Frank G
23:38 3dc
23:32 Grunter
23:31 Mick Dundee
23:30 Mick Dundee
23:18 Grunter
23:17 Old Patriot
23:14 Mick Dundee
23:12 Old Patriot
23:06 Grunter
22:56 gorb
22:56 Frank G
22:51 trailing wife
22:51 .com
22:49 Grunter
22:43 Lancasters Over Dresden
22:42 Glenmore
22:38 Zenster
22:32 trailing wife
22:32 Frank G
22:31 Barbara Skolaut
22:30 Barbara Skolaut
22:25 Jonathan