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I’m fairly concerned this Red Sea thing can turn into what sets off inflation for real. These routes were major efficiency factors to the economy. If we lose th

by verelo 3y ago

I’m fairly concerned this Red Sea thing can turn into what sets off inflation for real. These routes were major efficiency factors to the economy. If we lose them, there’s nothing but added cost coming for us all, and at the worst time for consumer confidence in central banks ability to manage the situation. Can we just keep our shit together? It’s been a rough decade and it’s only 3 years into the 2020s…

dang_raw_insult 3y ago
[dead]
rayiner 3y ago
The Houthis official slogan is: “God is the Greatest, Death to America, Death to Israel, A Curse Upon the Jews, Victory to Islam." I’m petty sure they do not give a shit about making consumerism harder for Americans. In fact it’s probably a bonus.
- deleted 3y ago
  [deleted]
- tptacek 3y ago
  On the other hand, this is literally the oldest, best established casus belli in the American system.
  - defrost 3y ago
    Blowing up your own ammnition by accident and blaming the Spanish? ADDENDUM: Clarification for those up|down voting like a yo-yo: On February 15, 1898, the American battleship Maine exploded while sitting in the Havana harbor, killing two officers and 250 enlisted men. Fourteen of the injured later died, bringing the death toll to 266. A naval board of inquiry concluded that the blast was caused by a mine placed outside the ship. Release of the board’s report led many to accuse Spain of sabotage, helping to build public support for war. Subsequent studies, including one published in 1976 and later reissued in 1995, determined that the ship was destroyed from the inside, when burning coal in a bunker triggered an explosion in an adjacent space that contained ammunition. Law Library of Congress: https://web.archive.org/web/20210424181239/https://www.loc.gov/law/help/usconlaw/pdf/Maine.1898.pdf https://web.archive.org/web/20210424181239/https://www.loc.g... https://en.wikipedia.org/wiki/USS_Maine_(1889) https://en.wikipedia.org/wiki/USS_Maine_(1889) https://en.wikipedia.org/wiki/Spanish%E2%80%93American_War https://en.wikipedia.org/wiki/Spanish%E2%80%93American_War
    - dctoedt 3y ago
      Where have you gone, Sam Cooke ("Don't know much about, hiss-toh-ree-ee ...")
  - sbierwagen 3y ago
    It would be a refreshing throwback to actually declare war, something the US hasn't done since 1942.
    - mikewarot 3y ago
      Would you then have us nuke Yemen? That couldn't possibly backfire. It's not like any promenant families are from there, right?[1] Wouldn't it be easier to just drop Israel like a hot potato? [1] https://en.m.wikipedia.org/wiki/Bin_Laden_family https://en.m.wikipedia.org/wiki/Bin_Laden_family
      - sbierwagen 3y ago
        Game-theoretically the US wouldn't want to drop support for Israel in response to attacks on shipping-- that would just result more in attacks on shipping by any country in the world that wants to force the US to do something. If the US wanted to drop Israel, they would only do so after a years-long bombing campaign that terrorized and depopulated Yemen, to make it clear that the US cannot be blackmailed into dropping allies. And yes, obviously, the US would do this entirely with conventional weapons. They've got eighty years of experience in crushing the third world under their boot with regular TNT bombs, after all, with no need for nukes.
        mikewarot 3y ago
        [flagged]
        rayiner 3y ago
        A minority group reclaiming territory from the people who colonized them isn’t “genocide.” https://en.wikipedia.org/wiki/Muslim_conquest_of_the_Levant https://en.wikipedia.org/wiki/Muslim_conquest_of_the_Levant It’s like Elon Musk complaining about the “genocide” of Afrikaners. https://www.washingtonpost.com/world/2023/08/01/musk-south-africa-apartheid-chant-malema https://www.washingtonpost.com/world/2023/08/01/musk-south-a....
  - tptacek 3y ago
    (for what it's worth, this was a rare opportunity to namedrop the Barbary Pirates, not so much a political statement)
    - rayiner 3y ago
      I would’ve done the same.
  - rayiner 3y ago
    True!
- verelo 3y ago
  You said this to a few people, and you’re not wrong but i also don’t care? This should be an issue we can resolve without really getting into the politics of their belief systems. Secure shipping channels, it’s been the MO of modern economies for a hundred years or more at least.
semiquaver 3y ago
You're underestimating how staggeringly cheap ocean freight is. A 40ft container can be shipped from China to NYC for under $3000; it's a very small portion of the retail cost of most goods. Even if cargo vessels all have to travel around the cape of good hope for a year or two, this increases the cost by a small percentage and is not going to kick off major inflation. Futures markets back this up, pricing in very modest increases in ocean freight shipping costs for the next several years involving this route, e.g. https://www.cmegroup.com/markets/energy/freight/container-freight-china-east-asia-to-us-east-coast-fbx03-baltic.html https://www.cmegroup.com/markets/energy/freight/container-fr...
- gnicholas 3y ago
  Does this diversion significantly affect travel time, which would cause some shippers to opt for air instead of ocean?
  - semiquaver 3y ago
    It adds 7-10 days to a trip that would normally take 30-40 days: https://www.flexport.com/blog/global-ocean-carriers-halt-red-sea-transits-what-to-expect/ https://www.flexport.com/blog/global-ocean-carriers-halt-red... Air cargo rates are 10-20x ocean, so it’s unlikely an extra week of travel would justify the expense for most cases.
    - verelo 3y ago
      My point is it’s not cheaper it’s more expensive, at precisely the wrong time. Sure shipping costs might be a small fraction of the costs of goods…but…unless it’s <= 2% that ain’t helping inflation so let’s do something about it. TLDR: it’s more than 2%, the average value of a shipping container is 50k, it costs 3k to mover. This is an issue, let’s resolve it. https://porteconomicsmanagement.org/pemp/contents/part1/maritime-shipping-and-international-trade/value-containerized-trade/#:~:text=About%2070%25%20of%20the%20value,TEU%20or%20%24109%2C000%20per%20FEU.P https://porteconomicsmanagement.org/pemp/contents/part1/mari...

by verelo 3y ago

dang_raw_insult 3y ago

[dead]

rayiner 3y ago

The Houthis official slogan is: “God is the Greatest, Death to America, Death to Israel, A Curse Upon the Jews, Victory to Islam." I’m petty sure they do not give a shit about making consumerism harder for Americans. In fact it’s probably a bonus.

deleted 3y ago
[deleted]
tptacek 3y ago
On the other hand, this is literally the oldest, best established casus belli in the American system.
- defrost 3y ago
  Blowing up your own ammnition by accident and blaming the Spanish? ADDENDUM: Clarification for those up|down voting like a yo-yo: On February 15, 1898, the American battleship Maine exploded while sitting in the Havana harbor, killing two officers and 250 enlisted men. Fourteen of the injured later died, bringing the death toll to 266. A naval board of inquiry concluded that the blast was caused by a mine placed outside the ship. Release of the board’s report led many to accuse Spain of sabotage, helping to build public support for war. Subsequent studies, including one published in 1976 and later reissued in 1995, determined that the ship was destroyed from the inside, when burning coal in a bunker triggered an explosion in an adjacent space that contained ammunition. Law Library of Congress: https://web.archive.org/web/20210424181239/https://www.loc.gov/law/help/usconlaw/pdf/Maine.1898.pdf https://web.archive.org/web/20210424181239/https://www.loc.g... https://en.wikipedia.org/wiki/USS_Maine_(1889) https://en.wikipedia.org/wiki/USS_Maine_(1889) https://en.wikipedia.org/wiki/Spanish%E2%80%93American_War https://en.wikipedia.org/wiki/Spanish%E2%80%93American_War
  - dctoedt 3y ago
    Where have you gone, Sam Cooke ("Don't know much about, hiss-toh-ree-ee ...")
- sbierwagen 3y ago
  It would be a refreshing throwback to actually declare war, something the US hasn't done since 1942.
  - mikewarot 3y ago
    Would you then have us nuke Yemen? That couldn't possibly backfire. It's not like any promenant families are from there, right?[1] Wouldn't it be easier to just drop Israel like a hot potato? [1] https://en.m.wikipedia.org/wiki/Bin_Laden_family https://en.m.wikipedia.org/wiki/Bin_Laden_family
    - sbierwagen 3y ago
      Game-theoretically the US wouldn't want to drop support for Israel in response to attacks on shipping-- that would just result more in attacks on shipping by any country in the world that wants to force the US to do something. If the US wanted to drop Israel, they would only do so after a years-long bombing campaign that terrorized and depopulated Yemen, to make it clear that the US cannot be blackmailed into dropping allies. And yes, obviously, the US would do this entirely with conventional weapons. They've got eighty years of experience in crushing the third world under their boot with regular TNT bombs, after all, with no need for nukes.
      - mikewarot 3y ago
        [flagged]
        rayiner 3y ago
        A minority group reclaiming territory from the people who colonized them isn’t “genocide.” https://en.wikipedia.org/wiki/Muslim_conquest_of_the_Levant https://en.wikipedia.org/wiki/Muslim_conquest_of_the_Levant It’s like Elon Musk complaining about the “genocide” of Afrikaners. https://www.washingtonpost.com/world/2023/08/01/musk-south-africa-apartheid-chant-malema https://www.washingtonpost.com/world/2023/08/01/musk-south-a....
- tptacek 3y ago
  (for what it's worth, this was a rare opportunity to namedrop the Barbary Pirates, not so much a political statement)
  - rayiner 3y ago
    I would’ve done the same.
- rayiner 3y ago
  True!
verelo 3y ago
You said this to a few people, and you’re not wrong but i also don’t care? This should be an issue we can resolve without really getting into the politics of their belief systems. Secure shipping channels, it’s been the MO of modern economies for a hundred years or more at least.

semiquaver 3y ago

You're underestimating how staggeringly cheap ocean freight is. A 40ft container can be shipped from China to NYC for under $3000; it's a very small portion of the retail cost of most goods. Even if cargo vessels all have to travel around the cape of good hope for a year or two, this increases the cost by a small percentage and is not going to kick off major inflation. Futures markets back this up, pricing in very modest increases in ocean freight shipping costs for the next several years involving this route, e.g. https://www.cmegroup.com/markets/energy/freight/container-freight-china-east-asia-to-us-east-coast-fbx03-baltic.html https://www.cmegroup.com/markets/energy/freight/container-fr...

gnicholas 3y ago
Does this diversion significantly affect travel time, which would cause some shippers to opt for air instead of ocean?
- semiquaver 3y ago
  It adds 7-10 days to a trip that would normally take 30-40 days: https://www.flexport.com/blog/global-ocean-carriers-halt-red-sea-transits-what-to-expect/ https://www.flexport.com/blog/global-ocean-carriers-halt-red... Air cargo rates are 10-20x ocean, so it’s unlikely an extra week of travel would justify the expense for most cases.
  - verelo 3y ago
    My point is it’s not cheaper it’s more expensive, at precisely the wrong time. Sure shipping costs might be a small fraction of the costs of goods…but…unless it’s <= 2% that ain’t helping inflation so let’s do something about it. TLDR: it’s more than 2%, the average value of a shipping container is 50k, it costs 3k to mover. This is an issue, let’s resolve it. https://porteconomicsmanagement.org/pemp/contents/part1/maritime-shipping-and-international-trade/value-containerized-trade/#:~:text=About%2070%25%20of%20the%20value,TEU%20or%20%24109%2C000%20per%20FEU.P https://porteconomicsmanagement.org/pemp/contents/part1/mari...