Goldman Sach’s Tom Kim spoke about the global economy and the company’s positive outlook on cargo-carriers at a recent Journal of Commerce event.The firm’s outlook on the global economy is positive, providing policy-makers don’t screw anything up.
“We think [the risk of a double-dip] is largely related to policy and policy is the greatest threat to any recovery.”
Kim also talks a lot about his specialty, transportation, during the interview.
He’s pretty excited about container shipping:
“The determination from the carriers has been remarkable. they are determined to stem the title losses and actually start to recouping some of the losses from last year – they were great.”
Sorry we can’t embed it, but here’s a link to the video interview.
Here are some more key bits:
“We’re positive on global growth as a firm… not withstanding the risk that policy action could stall a recovery.
“But that’s not our base case – our view is that the US fed will keep interest rates relatively low and allow for the economy to gain momentum.
“We believe that the first half of the year will be strong with a potential moderation in growth rates off a higher base in the second half of the year.
“So growth rates might decelerate immediately off a higher base.“
What’s the risk of a double dip recession?
“We think it’s largely related to policy and policy is the greatest threat to any recovery.”
“As you recall, we’ve been positive on container shipping for the past nine, twelve months and we reiterate that view.
“Carriers are exercising discipline through both pricing and capacity and the top line is set to grow.
“Global growth is growing – container shipping tends to benefit from that and we believe that these rate restoration initiatives are essential.
“If the carriers cannot raise pricing, they cannot sustain operations and the customers frankly are seeing the deterioration in service level simply because carriers are trying to cut costs to accommodate for their loss-making environment. And the determination from the carriers has been remarkable. They are determined to stem the title losses and actually start to recouping some of the losses from last year – they were great.
“There is capacity out there but the capacity side we think will continue to positively surprise because the idle fleet we think will continue to grow meanwhile the deliveries will continue to be delayed and this is all in the face of an accelerating demand growth environment.“
So the carriers are out of the woods?
“They have clearly passed the eye of the storm… There is a glimmer of light, but it’s still very tough times for the industry.
“Now the equity market discounts the news early and is starting to look further forward and we are starting to see the stock market start to price in some of that good news.“
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