United Nations

A tick for Turnbull

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It is a rare occasion that CM praises the Turnbull government. However, the actions taken to say “NO” to a special UN investigation on Israel’s activities on March 14 are worthy of congratulation. Two reasons;

1) the UN Human Rights Council (HRC) is stacked with countries (Cuba, China, Saudi Arabia, UAE, Qatar) with woeful human rights records and have no place dicatating impartiality. When the HRC has looked to investigate Israel more times than the rest of the world combined one doesn’t have to question bias. In the last 3 years, Israel has been the subject of 83 of 97 UN General Assembly resolutions. 86%. The UNHRC has zero credibility – period.

2) Hamas openly came out and admitted that 50 of the 62 dead were its own terrorists. 84% accuracy of those carrying handgrandes and other weapons. Yet honestly, who brings their children to an area where there is risk (and plenty of warning) of live fire? It is pretty simple. If you don’t want to get shot then don’t put yourself in a zone where there is a high likelihood of such. If no one turned up on the border, the body count would have been zero. As written last week, Hamas is far happier with sacrificing lives than Israeli Defence Forces are taking them.  When Hamas websites call for killing Israelis for those that break through, can you honestly blame Israel? The Israelis are not out to make headlines any worse than they already are. They are defending their sovereign borders and the reality is any of us would expect our armed forces to do the same if they were under siege.

The UN has long outlived its usefulness. Robert Mugabe is considered an ambassador for WHO. How he could possibly pass a sniff test on any level is beyond most. Such is the bias within that the UN, in an attempt to strike back at Trump’s intended cuts, considered deploying Blue Helmets in Chicago to help stem gun violence. These people are unreal.

It was once said, “if the Palestinians chucked their weapons into the sea there would be peace. If the Israelis threw their weapons into the sea there would be genocide.”

When they love their children more than they hate us

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If world opinion is to be believed, the Israeli Defence Force (IDF) wants to maximize the Palestinian body count.  The reality is that there is no upside for them to set new records. As awful as such actions are, fence lines and announcements which warn of shooting those who attempt to cross are plain. It should have come as no surprise to all of those protestors what lay in store for them. It is recognized as a sovereign border but this was obviously not a deterrent. The kibbutz of Nahal Oz is less than 2km from the Gaza fenceline. Was the IDF to stand down and allow fenceline intruders to get through, what would we expect them to do once they got to Nahal Oz? Peacefully protest? Even the Washington Post reported in an interview with a 23yo protestor, “We are excited to storm and get inside [Israel]…[we will do] whatever is possible, to kill, throw stones.” If someone crossed your own sovereign border threatening to kill (no matter a veiled threat or not) your fellow citizens, what would you want your border security to do? Exactly.

Such incursions are too numerous. During a trip to Israel in 2011, Nakba Day (the day of Israel’s founding (May 14), also known as the Day of Catastrophe to Palestinians) produced similar results. Not in the numbers killed, but the open encouragement by the Palestinian Authority (PA) for people to die as martyrs. Death triggers higher pension payments to families than does injury. The numbers are not trivial either. What a sad state of affairs that life can be priced so cheaply.

Make no mistake, when the PA gladly insures and encourages loss of life to publicize its independence, the heavier the IDF response the more welcome it is to the Hamas leadership. So contrary to public opinion, Hamas is far more eager to sacrifice Palestinian life than the Israelis are to take it. After all Gaza kindergartens and children’s TV programs go to great lengths to teach hatred of Israel. When countless wars have been waged by neighbors that outnumber it 30:1 and threaten to ‘wipe Israel off the map’ forgive it for living in a state of paranoia. We should remind ourselves when Egypt made a peace treaty with Israel in 1973, President Anwar Sadat ended up getting assassinated for it.

How is that even with the 1993 Oslo peace accords, the PLO carried out 4,000 attacks in the six years that followed? The Israelis under PM Ehud Barak were so desperate for peace that they offered to give the PLO 95% of their territorial demands yet more than 1,000 Israelis were killed, a total exceeding the previous 25 years combined. Arafat never wanted peace with the State of Israel. Every time Israel has extended the branch of peace with Palestine it is rejected. What a surprise when Saudi Arabia’s crown prince, Mohammed bin Salman, said several weeks ago,

In the last several decades, the Palestinian leadership has missed one opportunity after the other and rejected all the peace proposals it was given…It is about time the Palestinians take the proposals and agree to come to the table or shut up.”

Jews have lived in the West Bank area continuously for 3,700 years, even after the destruction of Judea by the Romans in 70AD. Arabs became the dominant local population for the first time from 700AD only after Muslim invasions of the land.

What is missed on most people when bashing Israel, is that Palestinians have automatic rights to Jordanian citizenship yet they only covet Israel. There are 21 Arab nations which share a common language which openly refuse to offer asylum to Palestinian refugees which provides a convenient excuse to maintain a hostile posture toward Israel using their suffering as bait. The Jordanians don’t actively push Palestinians to take up citizenship which is their right to do so. As a side note to history, why was it that King Hussein’s Jordanian army was able to murder thousands of PLO militants in the 70s yet the PLO never called for the overthrow of the Hashemite monarchy?

At the time of the founding of the State of Israel in 1948, 90% of Palestinian Arabs lived in Transjordan. At the time there was no movement to create a Palestinian state. It is somewhat ironic that no Arab outrage ensued when Jordan annexed the West Bank (what we know as the occupied territories) in 1950 blatantly disenfranchising the Palestinian Arabs in the process. Even then they never fought for self-determination. In fact it wasn’t until the PLO was first established in 1964, a time the West Bank belonged to Jordan.

Israel remains an open, democratic and multi-ethnic society. It’s 1.3mn Arab minority have full rights and can serve in the Knesset.  On the other hand, the PA has proven itself to be an intolerant, self-serving and corrupt dictatorship.  An independent audit discovered that international aid money lined the pockets of the Palestinian leadership. Money laundering authorities in France discovered that Arafat’s wife’s bank account had amassed $3bn over 20 years. It is ironic that most of the original founders of the PLO didn’t even live in the Palestinian Mandate when the State of Israel was created. Even Arafat was born in Egypt. 

People seem to blame these unfortunate and avoidable events on the shift of the US embassy from Tel Aviv to Jerusalem. However that decision was made clear many months ago and many other countries have decided to follow suit. These events are only going to end when, as Golda Meir once said, “We will only have peace with the Arabs when they love their children more than they hate us.

Afterall how can Israel make peace with people who can’t even make peace with themselves? Ask the majority of Jews, Christians and Muslims who live inside Israel and you can be assured that they want an end to all this violence but the media will never want to push that agenda.

Singapore Airlines wins whichever way the peace talks go

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June 12. Kim & Trump meet in Singapore. How the North Korean dictator will look in utter awe at how a city state of 5.6mn can build such a vibrant and prosperous economy with no resources of any kind other than grit, perseverance and common sense pro-business policy. The splendor of the skyline, architecture and cleanliness. Singapore will also get billions of people tuned in to the hours of global press coverage and news reruns. Surely Anderson Cooper will prop in front of the Merlion or Marina Bay Sands to convey the live coverage. How can Singapore Airlines not win from this global media freebie for tourism. One would imagine the place they sit down and talk will become a cult fixture for people to say they went to the spot where history was made.

Yet Singapore didn’t win the contest as a fluke. It has shown itself to be the outstanding beacon of independence in the region. Mongolia was a long shot and Switzerland would have caused poor old Kim to take a fuel stop. Let’s hope we get a peaceful resolution and maybe then we see Trump’s approval rating surge beyond the latest reading of 51% (Rasmussen). Ignore the noise around the midterms in Nov 2018. Iran is a separate issue and scrapping that deal was an election promise.

Red card your superiors

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News in the U.K. that a corporal training troops  went way too far with his treatment of a particular female recruit. The U.K. top brass has expressed its horror and anger, threatening to court martial the offending trainer. Didn’t Colonel Jessup answer the question of ordering a Code Red as, “you’re damn right I did!

Regardless of gender, isn’t the point of drill sergeants one that ensures that discipline is literally beaten into fighting forces? Isn’t the point of meeting minimum basic standards all about creating an effective fighting force?

If the cadet in question burst into tears after being berated for wimpishly bayoneting the sandbag should we feel sympathy? One can be sure the said corporal probably screams obscenities at all the people put in his charge, regardless of gender, religion or race. While it might not sound savory, will an enemy cut the opposing army some slack if they see tears? Will they roll over? Drop their weapons for the sake of equality?

While a leaked video is embarrassing, CM sincerely hopes those that join the armed forces are more than prepared to follow orders and accept the harsh discipline that is expected  of a soldier. The military is no place for social experiments. Yet more and more the army is pushing diversity ahead of capability. At least when the body count surges we can proudly posthumously award the dead with equality medals. The armed forces should strive for ability above all regardless of gender, sexual orientation or skin colour.

Really?

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Really? Does Newsweek honestly believe that 59% of Republicans don’t want a woman president in their lifetime? Could it be GOP supporters don’t want to see a woman made president solely on the basis of gender? Is that irrational?

It is highly conceivable that many Republicans would back someone like US Ambassador to the UN, Nikki Haley, if she ever runs given her strength and purpose, regardless of how appalled Democrats might be. Even worse, the Democrats would die a thousand deaths knowing her Native American/Sikh background would singlehandedly outflank almost any identity driven political candidates the DNC could field itself.  To be thrashed at its own game when the opposition party doesn’t even know the rules. The irony!

However Newsweek would not be budged going straight down the line of how poor old Hillary Clinton was the innocent victim of rampant sexism. Aren’t Republicans bigger racists than sexists?

Newsweek’s Tim Marchin wrote,

Clinton’s candidacy was, of course, a big moment for women in U.S. politics. No other woman has ever earned the nomination of one of the major parties. After her loss in the election—to a man accused by multiple women of sexual misconduct—2017 became a year that was, in many ways, defined by women leaders…Millions of people took to the streets across the world in the Women’s March shortly after Trump’s inauguration. More recently, the #MeToo movement has helped shed light on just how many women have suffered from harassment, discrimination and assault. The movement has also revealed accusations against a number of men in positions of power.”

Marchin would have been far better off  conceding that Clinton’s campaign of identity politics (Obama 2.0) was on the ballot paper. It wasn’t wanted. The electorate preferred to place a serial p*ssy grabbing silver back with an agenda that better suited their needs.

Marchin might have reflected that Clinton ran her campaign like a coronation rather than a democratic election and deplorables voted for the guy who actually made the effort to see them. He may have pondered that even having an advantage of getting the questions before hand (aka cheating) saw her lose. To have her husband randomly meet the Attorney General on an airport tarmac days before the FBI testimony. Mere coincidence and who wouldn’t talk about the grandkids? It had nothing to do with her gender. It had nothing to do with those darned white women controlled by their red-necked husbands on voting day. She was an awful candidate.

More shameless clickbait journalism which tries to shame Republicans with a gotcha question bound to have wide interpretation. Here’s an idea for the Democrats – run a better candidate.

Who will get the Nobel Peace Prize for helping end the Korean War – Kim, Moon & Xi or Trump?

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Will President Donald Trump be awarded the Nobel Peace Prize for getting Kim & Moon to the peace table? It is unlikely in so far as the Norwegian Nobel Committee would fear the full weight of international opinion (aka mainstream media) for doing so. Surely they wouldn’t risk making a mockery of such a coveted award? Then again a one Barack Obama was handed one less than 9 months into his first term on the stated basis of a noble quest for the Holy Grail of world peace rather than anything actually achieved. In 2016 alone, the Obama administration dropped 26,171 bombs on enemies. Not bad for a serial appeaser. A Nobel prize has even been awarded to a multi billion dollar embezzling terrorist of a self appointed authority, so Kim Jong-un is in with a shot.

Will Trump receive any credit (even without a Nobel) for pushing ‘Rocketman/The Fat Kid’ to the negotiating table? Probably not. How come no other administrations were able to achieve something that was relatively easier when the state of the North’s arsenal was considerably less lethal? Kim threatened Guam less than half a year ago. Trump didn’t back down and the North Korean dictator clearly realized from Twitter that the most powerful man in the world wasn’t all bluster. President Xi may well have played a solid hand in pushing Kim to sue for peace negotiations. In the interests of President-for-life Xi, his foe Trump has a maximum 7 years left to meddle. If Korea gets a peace deal, Xi can play hardball on the peninsula if a softer President enters the White House thereafter. Then he can take a stab at Taiwan. Xi can afford to wait.

We should not forget that Kim Jong-Un travelled to China on his first ‘overseas’ visit earlier this year. Best get the approval of a real dictator before progressing. Kim was there to get Beijing’s blessing to ensure North Korean sovereignty come what may so as to maintain the desired geographical buffer to pro-US nations.

Noone said peace isn’t desirable. The question is what price must one pay to get it? There are too many incidents in the past where signing peace treaties with dictatorial regimes have ended in disaster. Hitler/Chamberlain (Munich Agreement), Hitler/Stalin (Pact of Steel), Putin/Merkel/Macron (suggestion of UN in Ukraine), Le Duc Tho/Kissinger (Paris Peace Accords over Vietnam), Xerxes II/Leonidas (Greece) etc.

Will part of the denuclearization ‘deal’ call upon a withdrawal of US Forces from the Korean Peninsula? Would the US go for that? Highly unlikely. Would Moon be so gullible as to suggest a (slow) withdrawal? Of course he has the right to demand a foreign garrison pack up and go home. Trump may have pushed China and NK to act but he’d prefer the status quo than to roll over and vacate the premises. China wins in either scenario. America certainly doesn’t want to pay for the same real estate twice. Some quarters in South Korea must surely want the US military to stay as an insurance policy. Afterall how can one trust someone who comes from a dynasty that kills its own people and assassinates family members? Worryingly Moon looks to have a certain ring of Chamberlain about him.

It was clear that North Korea was dictating the moves at the Winter Olympics. It was South Korea who funded the $3mn in travel costs for the cheer squad. Anything that looked to mock the North Koreans was swiftly dealt with. It spoke volumes about which Korea was calling the shots. Anyone impersonating any other world leader could do so with reckless aplomb. Anything resembling Kim Jong-un  was quickly removed from sight. Tyrannies rarely do humour and sadly not enough democracies defend it. Still it is hardly an encouraging sign for even handed peace talks when one side looks to appease in this way.

Kim Jong-un is smart enough to realize at such a youthful stage in his life that he probably has another 40-50 years left in him. Reunification only works if he is given sanctuary. Idi Amin saw the beauty of a life in exile in Saudi Arabia. If Kim Jong-un can relax in Sichuan Province it maybe a dignified way out. One can bet his ‘some are more equal than others’ inner sanctum would rather the two stay separated. They would stand to lose way more than Kim.  It would be ridiculous to assume that Kim could be a major cog driving a reunification process with such an abysmal human rights record. Name a despot who would willing cede authoritarian rule much less without a deal which would exonerate him from any international criminal court that he would be held accountable for under a functioning democracy?

The South Koreans have had a think tank in Berlin researching the effect of reunification in Germany. The former West is still heavily subsidizing the former East. Depopulation (-15% between 1989 & 2013), unemployment rates (higher today that 1989) and inferior GDP per capita (27% less) are all a feature of the former communist state vs the federal republic over the last three decades.

How easily could South Korea absorb the North? West Germany had a population of 63mn in 1989 vs 16mn in East Germany or 4:1. South Korea has 53mn vs North Korea’s 24mn or 2:1. West Germany had a 2.3x GDP/capita ratio to the East in 1989. South Korea has a 52x GDP/capita ratio to the North. Reunification for Korea isn’t an apples to apples comparison with Germany. While Samsung might relish the prospects of tapping a cheap labour pool to build washing machines, the South would likely face far higher integration costs than the Germans. Even 30 years ago East Germany had a GDP/capita 17x that of North Korea.

In any event the only sure outcome of peace on the Korea Peninsula is that President Trump will get next to zero credit in the media. Wailing about the reckless diplomacy of an unhinged dictator will be the main with a few conceding it was at best a fluke.

Shipping industry needs to save ITSELF before it has any chance of saving the PLANET

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Yet more eco-mentalism being celebrated by the UN International Maritime Organisation (IMO) with little thought to the very economics that has crippled shipping companies for so long. Shipping companies need to save themselves before bothering to save the planet.  Although the back slapping for the supposed “watershed agreement” (their words) will be achieved by 2050. The most pressing global issue of our times and these metal hulks which burn the ugliest, dirtiest and cheapest fuel (bunker) available have 32 years to get there. Perhaps the irony is that bankruptcy might take half the ships out of service meaning the emissions target could be hit decades earlier. A brief look at history.

It wasn’t so long ago that Korea’s largest container transporter Hanjin Shipping declared bankruptcy.  The above chart shows the daily shipping rates for the industry which remain tepid for the past decade. The problem with the shipping industry is the fleet. Ships are not built overnight. Surging order books and limited capacity meant that as the pre GFC global trade boom was taking place, many shipping companies were paying over the odds without cost ceilings on major raw material inputs (like steel). This meant that ships were arriving at customer docks well after the cycle had peaked at prices that were 3x market prices because of the inflated materials.

The pricing market was looking grim in 2016. CM wrote, “These are the latest prices in 2016 vs the 5 year average by type. New LNG, grain and oil carriers etc are holding up but the used market is being slaughtered. Ships are generally bought with a 25-yr service span at the very least. Global seaborne trade growth has shrunk from 6%+ growth in 2011 to less than 2% now.”

Ship Prixces

According to Weber’s Week 4 report, VLCC rates for the route from the Arabian Gulf to China dropped to $10,925 per day on January 26 from $18,389 per day on January 19, which represents a 40% fall week-over-week. The average rate for all VLCC routes dropped to $13,179 per day from $19,974 per day on January 19. The current rates are 67% lower year-over-year.

Clarkson’s note 2010 build Capesize rates have fallen from $20,000/day 6 months ago to less than $3,900/day as of April 2018. 84K CBM LPG carriers have fallen from over $800,000/mth in April 2016 to $542,000/mth today.

Take a look at the financials of global leader Maersk. It recorded $US27.1bn of revenue in 2012 but only $24bn in 2017. Yet profitability slumped from $2.1bn to a paltry $25mn. Maersk carries around $34 billion in deferred tax loss carry forwards. That is the extent of the ‘financial baggage’ it still carries. The three major Japanese shipping companies have had a hell of a hit to profitability in recent years. See below.

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If the volume of goods transported by sea increases 3% every year, the volume in 40 years will be 3.3 times today’s volume. To cut total CO2 emissions in half by 2050, CO2 emissions per ton-mile need to fall by 85%. NYK is looking at the following ship that will cut emissions by 69% in 2030.

If the shipping industry is not fixed through market forces it will be difficult to repair the profitability and balance sheets that would allow the companies to invest in more eco friendly vessels. Bankruptcies are mergers are needed to streamline the sector.

According to Clarksons, the global fleet of all types of commercial shipping is 50% larger than it was before the GFC despite the World Trade Organization saying growth in global trade has crept up from $14.3 trillion in 2007 to $15.46tn in 2016 (+8%). Scrapping rates have fallen 40% since 2012 but since 2017 have risen moderately, appealing to owners with too much tonnage on their hands.

The International Chamber for Shipping’s secretary general Peter Hinchliffe said, “This is a ground-breaking agreement — a Paris agreement for shipping — that sets a very high level of ambition for the future reduction of carbon dioxide emissions…We are confident this will give the shipping industry the clear signal it needs to get on with the job of developing zero carbon dioxide fuels so that the entire sector will be in a position to decarbonise completely.”

What a wonderfully naive plan. At least the IMO can feel warm and fuzzy despite so many headwinds ahead of an industry still in structural distress.