Futurenautics: The Rime of the Future Mariner


From the FutureNautics website (http://www.futurenautics.com/)

 

In honour of the UK’s National Poetry Day. The Rime of the Future Mariner, with apologies to Coleridge. And everyone else.

 

The Rime of the Future Mariner

 

I thought him an ancient mariner,

When he LinkedIn with me.

His profile pic showed crusty beard,

And picture of the sea.

 

Let’s start a conversation”

Quoth he, ‘for I bring,

A tale of shipping’s future,

via LinkedIn messaging.”

 

Said I, “I’m LMFAO,

Oh crusty bearded loon,”

But as his rime unfolded I saw,

That I had typed too soon.

 

Heavy was my workload,

I had no time for chats,

Upgradeth I to Windows 10,

For videos of cats.

 

But sayeth he, “This rime of mine’s fantastic,

It enthralls,”

Then describeth he, what seemed to be,

A total load of rubbish.

 

A mariner, he claimeth,

He had surely been,

On board an LNG carrier,

Back in two-thousand fourteen.

 

A satcom link, predictive text,

And gas 161 below,

Together caused the accident,

That begat his tale of woe.

 

Predictive algorithm,

combined with cryogenic freeze,

Propelled him to the future.

And buggered up his knees.

 

“I have seen what you see now,

And what is yet to come.

I can now vouchsafe to you

Shipping 2051.”

 

“Begone, you fiend,”

I typed at speed, but nary checked before,

Predictive text corrected it,

Begin, friend,” ‘s what he saw.

 

He did, “The future’s different,”

The Mariner did warn,

“No Ballast Water Management, no slow steaming.

Or porn.”

 

“No Mariner, it will not be,

As long as we have tankers,

We’ll still have ballast water,

And crews will still be reading the magazines for the articles.”

 

“Men and ships are now as one,”

The Mariner replied.

“All of us connected,

With technology inside.”

 

“Cargoes are intelligent,

Supply chains all holistic,

We talk no more of shipping

We are all now blue logistics.”

 

“But Mariner, look at us today,

Look at what you see,

Speculation in tonnage,

And overcapacity.”

 

“The industry is struck with gloom,

In almost all its facets,

The liner guys are struggling,

For a return on their net assets.

 

“Dry bulk is a basketcase,

And tankers on the slide,

How do we get from here to there?

Where is the upside?”

 

Quoth he, “The fate of shipping,

Is entirely your decision,

But if you desire any lucrative hire,

You’re going to need a digital vision.”

 

“But people always will need ships,

The IMO says it’s true.”

Pauseth did the mariner; then came the answer,

“Who?”

 

“Leave not this in your inbox,

Nor save it up for later,

You need more linkativity, connectitude,

Big Data.”

 

“Focus ye on customers,

Industry four-point-o,

Collaborative platforms,

Analytics, data flow.”

 

My mind was filled with wonder,

As the tale was told to me,

Of shiny things and slimy things,

And new technology.

 

When it was done I raised my hands,

And typed upon the keys,

“Mariner, you have to share,

Your visions such as these.”

 

“You must go out into the world,

Get on the conference circuit,

Do some social media,

Shipping Podcast; Holly Birkett.”

 

The silence from the Mariner,

Came straight from Davy Jones,

T’was chilling, as the knowledge

of it echoed in my bones.

 

“Oh Mariner, will you confess,

Your person is a lie?

This flesh’s pretence: you’re intelligence.

The answer came:  “AI, AI.”

 

He had no beard, nor head,

Nor heart, nor notion of the sea,

But he knew all of shipping’s past,

And shipping yet to be.

 

He’d earned no love, nor honour,

Nor he to any owed.

For the future Mariner I’d known,

Was nothing more than code.

Changes In Fashion: Panamax Vs Post Panamax Container Normalised Transaction Analysis


Premiums and discounts for vessel features change over time (fashion). These changes are due to shifts in preferences by the market for different vessel features and characteristics, which in turn are determined by underlying customer needs, the economic environment and geo-political events. Here at VesselsValue, we constantly analyse these changes and the effect they have on vessel values. One of the tools we use is our “Normalised Transaction Analysis” within our market value model.

Our market value model uses a series of algorithms to determine current vessel market values through the relationship between five factors: ship type, age, size, features and the current state of the market.

In “Normalised Transaction Analysis” we begin with the transaction price of a fair market transaction; we then use our market value algorithms to adjust the transaction price for the five factors. After stripping away the effects on value of features and characteristics of the transaction we arrive at an equivalent transaction price for a 0-year-old, generic size and specification vessel in a flat market. Applying this process to all transactions in a sector allows us to compare normalised transaction prices.

panamax-vs-post-panamax

The graph above shows this “Normalised Transaction Analysis” for Panamax and Post-Panamax container vessels.

The combined factors of the expansion of the Panama Canal; the industry’s pursuit of greater economies of scale and the depressed market, of which Hanjin is a victim, mean that the difference between Panamax and Post-Panamax container values is growing. In “Normalised Transaction Analysis” we can seek confirmation of this trend and this is demonstrated in the chart.

Along the Y-axis we measure the normalised value and the X-axis measures time. This has been indexed for both Post-Panamax and Panamax container normalised values. Normalised transactions are represented as scatter points and the linear regression through these two groups of transactions shows that whereas Post-Panamax normalised value remains stable (regardless of current market) the trend in Panamax normalised value is showing a continued downward trend.

The scope of this type of analysis is to identify trends in value differentials between vessel features. Example applications of this analysis include looking at the changing premiums and discounts associated with different features and characteristics such as yard, engine type, tanker coatings, gas containment systems, hull type, pump type, ice class, DP class.
Source: William Bennett Senior Analyst, Vessels Value

What Might Have Happened to Sterling


What Might Have Happened to Sterling…..by PolemicTMM

Nobody seems to know what caused the dip in sterling on the Asian markets on 7 October 2016, but forex currency blogger @PolemicTMM has written a very funny and informative post on how he or she imagined what went on the trading floor. It is reproduced below, but if you want to read the original, it can be found here.

——————————————–

GBP goes EURCHF. What’s going on.

Ok , so I was wrong. Cable was not a good buy 2 days ago and just to prove me REALLY wrong the marvelous Antipodean time zone decided to ram GBP in a way that hasn’t been seen since the SNB spoofed EURCHF.

It’s the small hours of London Friday morning for me  and the reasons for GBP’s freediving world record attempt haven’t yet been formulated. Now I’m afraid that if you started reading this expecting me to tell you what I guess is going on in GBP, then sorry, I don’t know. But having worked in FX for a good chunk of my life I can have a good guess at what is now going on in the banks.

First, every salesperson is struggling to call all their clients who had ‘call levels’ at zones never expected to be hit, whilst trying to fill orders in systems at levels that they think they can get away with. Oh, hang on, no they can’t do that anymore as they need audit trails. So, they will all be huddled around spot desks arguing over whose order was hit at what. Said spot dealers will be shouting a lot and staring at an automated blotter that is slowly dripping in a queue of trades that their antiquated order and back office system in some far off distant place on the planet is trying to process. Basically, there will be a lot of ‘WHAT THE FUCK IS MY POSITION.. ARRRGH ‘ going on.

Meanwhile, clients will be calling in demanding to know why their stops were done 7% below current market and why no one called them. Because if they had been called they would have bought it back at 8% below current markets because they are all retrospective geniuses.

Managers will be trying to recite the rules of engagement for filling stops but can’t find them so call compliance. However, compliance is asleep because they are mostly based in head office and that isn’t in the Antipodes, apart from the Antipodean banks whose compliance officers will be teaching some course to the catering staff on how not to deal with Yemeni banks.

By now the dealing systems will be catching up with what’s going on and the spot traders now fit into two categories:-

Group 1 who look at their position screens and see a vast profit who split into groups ‘A’ and ‘B’. ‘A’ stays very quiet knowing that sales will want some of the profit if they see how much it is and ‘B’ who stand up and declare themselves as trading Gods.

Meanwhile Group 2, on seeing vast losses, immediately write emails to every manager under the sun blaming their staggering losses on system latency and the ridiculous guaranteed stop levels that sales made them undertake. If they are lucky management will swerve the losses into a contingency book, but if they are unlucky and the bank was thinking of replacing them with a ‘Raspberry Pi’ algorithm, they will be out of the door by close of Friday.

But back to sales. Those that are still on the phone are quoting the reason for the fall on anything that they feel everyone else is saying because no one has a real clue. They will probably repeat what JPMChase or Goldman say as they reckon that the guys there are cleverer than them and more likely to know. So, clients will currently be being told that it is due to- “Barriers being hit at 1.25, 1.20 , and 1.15” and if they can’t even manage that will say “Stop losses”, which is a great generalised term that demands no justification. But some foolish folk will have done a Bloomberg News search for GBP and decided that it is due to the news that fracking had been allowed in North West England. Which is of course rubbish, because we all know that it happened because Diane Abbott was made the shadow Home Secretary.

By now very senior management will have come down to the dealing room. Bearing in mind this is out of London time zone, the senior managers involved will have absolutely no idea whatsoever about Sterling so will ask questions to frantic spot and sales folks along the lines of “Has Brexit been announced?” or “is this is a big move?” The frustrated dealing staff will have to tread a thin line with them, alternating between wanting to tell them to piss off and ingratiating themselves with them as, with the size of the losses they can see, they may well be up before them the following morning.

Meanwhile sales are noted to be only saying, into phones and Bloomberg chats, “But seriously, that’s where it was” and starting to swear at overseas sales coverage who are trying to goad them into either filling their clients better or having any profits accruing through their clients stops reallocated back to them rather than staying in the center thatripped them off did the execution.

The options trading desk will have appeared to have turned Greek as that is all they are speaking, shouting things like .. “Watch your gamma”, “check your theta”,” where did I trade that delta” and “Oh shit, they said you made money shorting vol. “

For the sales guys with no clients with GBP orders, they will be feeling rather smug and trying to sound intelligent by quoting correlations as to what this should do for other pairs. Such as “Well with the cross correlations we should see a pick up in MXN/CNH vol and our model says that the 3m/1yr calendar spread is the way to play it”, only to find that if they try to get a price from their options desk they are told to “fuck off, haven’t they seen what is going on in GBP”.

So, it will all be fun and games. Do I care? Not a bit. Because I am sitting at home, it’s the wee hours of the morning and I am about to go to bed chuckling mischievously to myself, knowing that London FX sales folk are going to have one hell of a miserable start to the day explaining to their clients why they have just lost 7% of their company’s hedge book.

Oh and let’s not forget all those corporate treasurers dusting off the wording for their ‘due to FX volatility, losses were greater than forecast’ statements to add to this year’s accounts.

 

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