The Impact of the Financial Crisis

For an idea of some of the very concrete effects the financial crisis has already had on global trade, try this Economist article:

Since the early summer the price of steel has fallen by 20-70% and thekey rate for bulk shipping of commodities is down by more thanfour-fifths. There are even stories of grain cargoes piling up in portsin the Americas. Their buyers’ letters of credit have not beenhonoured, because of a lack of confidence in the banks that underwritethem. At least one Australian producer has had the same problem withiron ore shipments to China. And shipowners are having trouble raisingfinance for new vessels.

Meanwhile, I’m surprised it took reading this Times article for me to see this one coming:

Europe’s ambitious drive against climate change was today in disarray with agrowing number of countries in open revolt over its targets. . .

But with a recession looming it was Silvio Berlusconi, the Italian PrimeMinister, who led the attack on the grounds of cost.. .

“Our businesses are in absolutely no position at the moment to absorb thecosts of the regulations that have been proposed,” Mr Berlusconi said later.

Here’s hoping the reduced consumption of fossil fuels from the first article will offset the weakened global warming regulation from the second. . .

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