World Trade Death Plunge--Shipping Rates At Zero

Ambrose Evans-Pritchard, International Business Editor at the London Telegraph has this staggering report about the freeze in world trade:

Freight rates for containers shipped from Asia to Europe have fallen to zero for the first time since records began, underscoring the dramatic collapse in trade since the world economy buckled in October...

Shipping journal Lloyd's List said brokers in Singapore are now waiving fees for containers travelling from South China, charging only for the minimal "bunker" costs. Container fees from North Asia have dropped $200, taking them below operating cost.

Industry sources said they have never seen rates fall so low. "This is a whole new ball game," said one trader.

Larry Kudlow over on CNBC keeps hunting for his "mustard seeds" of hope for the economy. These are more like the seeds of destruction.

Today's Growth Business--Unemployment Claims Processing

It's bad enough to lose your job. But then imagine that the state Unemployment Claims systems nationwide are overwhelmed and can't even process your application for benefits? That's the sorry story, as reported by AP:

Electronic unemployment filing systems have crashed in at least three states in recent days amid an unprecedented crush of thousands of newly jobless Americans seeking benefits, and other states were adjusting their systems to avoid being next.

About 4.5 million Americans are collecting jobless benefits, a 26-year high, so the Web sites and phone systems now commonly used to file for benefits are being tested like never before.

Even those that are holding up under the strain are in many cases leaving filers on the line for hours, or kissing them off with an "all circuits are busy" message. Agencies have been scrambling to hire hundreds more workers to handle the calls.

General Motors Becomes A Bank

GMAC, the automobile financing arm of GM has been recognized as a 'bank holding company' by the Feds. This provides unlimited (well, AMPLE) access to federal funds to bankroll consumer loans to purchase GM vehicles. Per the Wall Street Journal:

The Federal Reserve's decision to make GMAC LLC a bank-holding company throws the unit a desperately needed lifeline, but further entangles the federal government in areas of the economy it once considered beyond its purview.

In a Christmas Eve decision, the Fed allowed GMAC, a finance company controlled by private-equity fund Cerberus Capital Management and General Motors Co., to qualify as a bank. As a federally regulated bank-holding company, GMAC potentially gets access to billions of dollars of Treasury funds dedicated to recapitalizing banks.

Santa has been busy this Christmas!

Recession Time As Swiss Watch Sales Plunge

Recession time has come to Swiss watch makers as sales exports plunge by 15%. Most worrisome, this indicates softness in the larger market for luxury goods which was supposed to be a bright spot this holiday season, per the Wall Street Journal.

Swiss watch exports fell 15% in November from a year earlier to 1.52 billion Swiss francs ($1.41 billion), a steep deterioration from the drop of around 5% posted for October. November is the watch industry's most important month of the year because of the run-up to Christmas.

Although a decline had been expected, the extent of the plunge surprised market watchers. Particularly worrying were the first signs of a weakness in Asian markets and the tailing off of demand for premium products, which had been thought to be less prone to cutbacks in spending, analysts said.

My mom used to call this a 'sparse Christmas.'

Inflation To The Rescue!

Back in 1933, "inflation" was touted by the new FDR administration as the cure to America's Depression woes.

Now with zero percent interest rates, Bernake has climbed on the inflation bandwagon.

This hilarious short MGM film from 1933 explains why the miracle of inflation is an economic panacea.

Economic Recovery For Dumies

Simple, eh?

Thanks to the Washington Post.

Santa Bail Out On The Way

Wall Street Journal reports Feds are going to bail out Santa.

Apparently Santa's difficulties in "producing product," as Mr. Paulson described it, originated in a poorly understood aspect of the jolly elf's current operations known as "Christmas list swaps," or CLIPS...

Several years ago, according to a participant who requested anonymity, some of Santa's elves were contacted by representatives from Bear Stearns and Lehman Brothers, who persuaded the elves of the benefits of an elaborate scheme of Christmas-list securitization.

As outlined to the elves, the idea worked like this. Brokers would break each item on the Christmas lists into separate pieces and repackage the requests as securities, using a formula known as a "benevolence diffusion algorithm." This would guarantee happiness for everybody in the world on Christmas morning. No one would lose...

Difficulties emerged when a CLIPS salesman from AIG called a senior elf to say that a large number of the Christmas list swaps had ended up in the hands of Russian billionaires with links to former Russian president Vladimir Putin. "These plutocrats don't even believe in me," Santa was heard to say as Mr. Paulson's sleigh rode out of sight...

There are reports that the Easter Bunny may be next on the bail out list.