In the long run, Wall Street is the most rational place on earth. It rewards one thing: earnings and more earnings. Think GE in the Jack Welch era. In the short run, Wall Street is the most irrational place on earth. It trades on rumor, innuendo, hunch, wild ideas concocted over drinks or other mind enhancing agents and the opportunity to kick someone while he’s down or apparently so, commonly called short selling. Think Enron.
If you want to understand where the economy is going, shipping activity is the proverbial canary in the coal mine. Traditional financial indicators such as GDP, Dow Jones Industrials, and Employment Indices are subject to the vagaries of economist interpretation and timing as complex forces work themselves through the system. Enron might puff up revenue numbers, but shipping doesn’t lie. If Eddie isn’t loading trucks, his boss isn’t billing. No billing, no cash. No cash, the canary stops flying. Carriers are the first to notice.
