Those bothered by the wild cheering emanating from Obamanation celebrating the flaccid economic recovery should have some peace in the coming months. For starters the global economic slowdown has started. One of the early canaries desperate for oxygen is the port of Shanghai:
The shipping specialist Lloyd’s List said container traffic through the Port of Shanghai – the world’s largest – fell by 100,000 boxes in January from a year earlier, or 4pc. Volumes fell by over one million tonnes. . . .
“China’s shipping markets face grievous challenges,” said the Shanghai International Shipping Institute. It acknowledged that the industry in the grip of downturn and likely to face a “worsening situation” in early 2012.
The biggest falls in container volumes have been on the Asia-Europe route. . . .
“Things will be very difficult in 2012: it will be a winter and a test for the entire industry,” said Mao Daqing, Vanke’s vice president. A price war before Christmas failed to halt the crash in sales.
Caixin Magazine said China’s once-hot property market is “turning polar” and reported that Moody’s fears Hong Kong-based developers may struggle to refinance foreign debt this year.
The IMF advised Beijing to stay the course on the housing curbs. If stimulus is needed, the authorities should run a bigger budget deficit with “targeted transfers and unemployment benefits”.
In a remarkable twist, the IMF proposed direct subsidies for white goods, a sort of Chinese ‘cash-for-clunkers’.
“A fiscal package should be the front line of defence,” it said.
Then there is the spike in oil prices. When the Obama TV Network reports it you know there is trouble ahead:
Compounding the spike in oil is Obama’s attempt to play tough guy with Iran. Obama and his national security team have joined the throng of neocons in trying to pump the public into believing that Iran is the new Nazi Germany. Obama is now pushing to cut off Iran from SWIFT.
What is SWIFT?
SWIFT handles cross-border payments for more than 10,000 financial institutions and corporations in 210 countries. It lets users exchange financial information securely and reliably, thereby lowering costs and reducing risk. It operates on trust and neutrality — SWIFT accepts nearly all comers and does not judge the merits of the transactions passing through its secure message system. Its managers generally brush off investigators and enforcement agencies, telling them to take up suspected wrongdoing directly with nations or corporations.
Established in 1973, the essential but little-known hub is overseen by major central banks, including the U.S. Federal Reserve and the European Central Bank. . . .
The Obama administration wants Iran evicted from SWIFT, an independent financial clearinghouse that is crucial to the country’s overseas oil sales. That would leapfrog the current slow-pressure campaign of sanctions aimed at persuading Iran to drop what the U.S. and its allies contend is a drive toward developing and building nuclear weapons. It also perhaps would buy time for the U.S. to persuade Israel not to launch a pre-emptive military strike on Iran this spring. . . .
But such a penalty could send oil prices soaring when many of the world’s economies are still frail. It also could hurt ordinary Iranians and undercut the reputation of SWIFT, a banking hub used by virtually every nation and corporation around the world. The organization’s full name is the Society for Worldwide Interbank Financial Telecommunications.
If this is pursued and implemented oil will go up, probably over $150 a barrel. But wait, there is more. Look for other countries–China and Russia in particular–to move to set up an alternative to SWIFT and eliminate the ability of Washington to use economic pressure as a tool of foreign policy. Obama’s decision to pursue this kind of desperation move is further reminder of how naive and inexperienced this clown is. It may allow him the fleeting illusion that he is being the tough guy with Iran, but it is the kind of temporary feel good move that could actually blow up the world economy. Go for it Barry.