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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Moj Jalali who wrote (46499)	2/7/2012 10:49:16 AM
From: Area51	Respond to of 79061

<< Where interest is concerned, most banks give shippers a holiday on payments since it is better to allow the ship to run than take possession and try to sell it in a depressed market which gives me hope there is some support for continuing operating of ships>>. That's kind of a mixed blessing it seems to me. To improve the fundamentals of the business, capacity needs to be reduced to be in line with demand. That way low rates will cure themselves eventually. I think now many older ships will be running at a loss for many years (probably just operating expense minus rates, but certainly if you also include the capital and financing costs), so once operators realize that they can't just ride out this period of time they will retire the least economic ships, take salvage value and the industry fundamentals will eventually recover. (You may be primarily interested in the oil shippers/ OSG? - I think the situation there is not quite as dire as the dry shippers)