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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: ChanceIs who wrote (124233)	9/14/2009 9:30:35 AM
From: zebra4o1	4 Recommendations of 206184

On the container ship front: Last night talked to a guy who works for a large (global) container leasing company. He says they see absolutely no signs of any pick up in container leasing - and right now should be the peak season. Things are looking quite bleak for them for next year. Quite a bit of their debt will need to be rolled over. Now that the asset backed market is closed to them, interest will be 2% or more higher. This alone will produce a 40% to 60% hit to their margins (a capital intensive business). And from the other end, they are getting incredible threats/ultimatums from desperate shippers to cut lease rates, or take back all their containers. He mentioned a 'container index utilization index' - for the whole industry, not just his company. The index was at 97% at the peak, and has now dropped to 84%. I was kind of surprised as that does not sound like a totally disastrous drop. But apparently container inventory does not have the wild swings that ship building has. The lead times for building a container are only a few months - not years like in ship building.

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