BOW WAVE 427

Bow Wave Issue 427--Stock Exchange Edition

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(c)2008 WavyLine.com	Issue No 427 28 Jan 08
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. Quarterpoints
3. Radio News
4. New Animal Transport Regulations
5. 2nd China Shipping Ports and Logistics Conference
6. And Finally...

1. Welcome

Poem of the Week

The Very Rich Hours of the Houses of France

Our plane falls from the sky
into France, where everyone seems
so much happier than we are,
but no, it's not the people
who are happy, it's the buildings,
the high-beamed Norman farmhouses,
the cottages with roofs of trim thatch,
the chateaux set in verdant vineyards.
The people are like you and me:
their clothes don't fit very well,
their children are ungrateful,
and they're always blowing their noses.
But the buildings are warm and well-lit,
and even the ones that aren't,
the ones that have bad lighting
and poor insulation and green things
growing on the tile, even these
seem to be trying like crazy to comfort us,
to say something to us in French,
in House, in words we can understand.

David Kirby, from I Think I Am Going to
Call My Wife Paraguay (2204)

New Readers this week include:-

Angus Galbraith of FP Marine in London

News of Readers

Don Soutar has been appointed the Director of Business development for National Maritime Services, the vessel seizure subsidiary of National Liquidators based in Ft Lauderdale Florida. He is to develop new business in the commercial vessel field for National Maritime Services and to act as client/attorney liaison with all existing and new clients.

Contact him at:-

dons@vesselarrest.com

Ashley Dinning has taken up a senior role with APM Terminals' Port of Pipavav in Gujarat, India as Chief Commercial Officer based in Mumbai.

Contact him at:-

ashley@portofpipavav.com

Margie Collins has been appointed as Editor of Port Management International (PMI), whose inaugural issue will be published and launched at the annual Posidonia shipping exhibition in Greece, this June.

information@elabor8.co.uk

Noel Mackenzie is now based in Limassol as the insurance director for Rickmers, the German container ship operator

Contact him at:-

noelm@btinternet.com

THE Liberian International Ship & Corporate Registry (LISCR), the US-based manager of the Liberian Registry, has appointed Julia Müller and Jörg Molzahn as General Managers of its Hamburg-based office.

Note from the Editor

An interesting week on the exchanges that's for sure.

Enjoy!

2. Quarterpoints

Your editor's most recent column in Lloyd's List ponders the effect of investment turbulence on the marine insurance sector. After such a volatile week it does seem uncontroversial to opine that the underwriters who have been using investment returns to blot out their red ink have got a tough old year ahead

After Black Monday

Black Monday has come and gone and this column is being written as the Tuesday market trading in Asia is closing in a tub of red. Trading in Bank of China shares has been suspended on rumours of US exposures. A learned voice on early morning radio says the chances of a recession have gone from one in twenty to one in in three. Some voices invoke the post 9-11 tumble of markets and insurers as the claims poured in and the economic knock on effect caused consternation in company treasuries.

The only insured event this time around the cycle is the underwriting of bonds and debts by the highly capitalised. Insurers with high credit ratings, even those rarities the triple A rated companies are poised to suffer rating downgrades with the resonance of the general ripple which started during summer as the sub prime lending problem. Early announcements by large insurers that they had little or no exposure to sub prime debt will be to no avail as a general plunge of financial values takes place around the world.

Some of the first general economic casualties following 9-11 were in the tourism and aviation sectors. We well remember how suddenly and mysteriously Swissair went to the wall. But the effect on the insurance marketplace was cathartic. Many companies went into deep planning mode, writing net lines only until the renewal of their reinsurances, and making contingency plans for run offs and new establishments in Bermuda. What also followed rather swiftly was a sudden end to the long, dispiriting soft market which had dogged the insurers through more than half of the 1990s and a drying up of capacity for all manner of risks.

Marine and transport risks, which nowadays are sort of a niche in the global insurance industry are well into the current soft part of the pricing cycle. In a world where the quality of capital and the depth of it are under careful scrutiny, is it thinkable that the inexorable fall of the prices charged will continue as before Black Monday, business as usual?

Probably not, especially in the activities of marine and transport insurers whose solvency is underpinned by financial engineering and reinsurance and whose underwriting results are less than stellar. This may even give rise to one of the great historic industry paradoxes describing how after the greatest boom in the history of shipping since the 1770s, companies and mutual associations who specialise in the insurance of such risks saw the relative erosion of their capital and a consequent higher exposure to the drought of credit and reinsurance protection.

Part of this exposure relates to the way insurance organisations husband their relatively lean capital resources. One way of measuring the depth of these is to recall the deficit during the crisis years at Lloyd’s of London. Then, admittedly in a different economic era, a loss of UKP 7 billion was sufficient to threaten the entire future of the historic market. This was the aftermath of one approach to trading wherein underwriters would accept badly priced or poorly understood risks, take a turn of commission and then feed the risk back into the system.

Most insurers and their treasuries have little choice but to invest their capital in ways which correspond to the notions of good investment prevalent at any one time. The commonest story in investment trends will surface in the portfolios of most insurers
Since their activities in the markets will represent the middle of any investment bell curve.

One can hazard a few guesses as to the future this morning. The money in the bank of insurers will be worth less than we all thought. The least solvent insurers are even less solvent this morning. Transport and shipping companies willing to swap risk
with such insurers may hesitate to continue or try to mitigate their exposures. A spate of mergers and acquisitions may be expected for in marine and transport consolidation is king. As for the rest of us we all hope the landings are soft, the underwriting loss ratios not too bad, the poor investment returns on the year not too influential in a life and death sort of way for underwriters. And we will continue to ask questions like: "Just how do you define the term 'first class security'"? And "How do those rating agencies arrive at their figures"? And "How solid is that solvency margin in the report and accounts"?

3. Radio News

The producers of the RTE Radio 1 programme called Seascapes have sent out the following circular:-

TUNE INTO SEASCAPES ON RTE RADIO 1 THIS AND EVERY MONDAY NIGHT AT 10.30 p.m.

THERE IS ALSO A MARINE NEWS SERVICE ON THE SEASCAPES WEB PAGE AT

http://www.rte.ie

WHERE THE PROGRAMME IS ALSO AVAILABLE AS A PODCAST AND FOR DOWNLOADING OF ALL INTERVIEWS ON THE PROGRAMME AND THERE IS A FURTHER SEASCAPES TELETEXT SERVICE ON AERTEL RTE TELEVISION TELETEXT AT PAGE 190.

4. New Animal Transport Regulations

We spotted this item in the most recent edition of Transport News Brief, the e-zine edited by Robin Dickeson of the Society of Motor Manufacturers and Traders:-

Coventry-based training outfit Lantra Awards says that drivers and people involved in animal transport need a 'certificate of competence' to legally carry animals by road, from 5 January 2008. A new EU law affects "all businesses that transport cattle, sheep, goats, pigs, horses and poultry by road, in connection with an economic activity on journeys over 65 km." Lantra has developed a training programme and has the authority to award certificates of competence for people who meet the standard for the EC Regulation, Welfare of Animals During Transport 1/2005. The firm worries that too few operators realise the implications and are not ready. "They may face a £5,000 fine."

More from Jo Bartlett at:-

jo.bartlett@hroc.co.uk

5. 2nd China Shipping Ports and Logistics Conference

London 11-12 February 2008

These details were sent in by Caroline Holt for the organisers who have kindly invited the editor to once again talk about insurance in China. This is of course a topic we return to from time to time in these columns. We have long had the conviction that the Asia Pacific is the marketplace of the future in marine and transport insurance where the fate of many underwriting destinies will be decided.

http://www.navigatepr.com/conferences.htm

6. And Finally...

Many thanks to David Frugtniet for this one

Why men don't write to advice columns

Dear Walter:

I hope you can help me here. The other day I set off for work leaving my husband in the house watching the TV as usual. I hadn't gone more than a mile down the road when my engine conked out and the car shuddered to a halt. I walked back home to get my husband to help. When I got home I couldn't believe my eyes. He was in the bedroom with a neighbour making mad passionate love to her. I am 32,my husband is 34 and we have been married for twelve years. When I confronted him, he broke down and admitted that he'd been having an affair for the past six months.

I told him to stop or I would leave him. He was sacked from his job six months ago and he says he has been feeling increasingly depressed and worthless. I love him very much, but ever since I gave him the ultimatum he has become increasingly distant. I don't feel I can get through to him anymore.

Can you please help?

Sincerely,

Mrs. Sheila Usk

Dear Sheila:

A car's stalling after being driven a short distance can be caused by a variety of faults with the engine. Start by checking that there is no debris in the fuel line. If it is clear, check the jubilee clips holding the vacuum pipes on to the inlet manifold. If none of these approaches solves the problem, it could be that the fuel pump itself is faulty, causing low delivery pressure to the carburetor float chamber.

I hope this helps.

Walter

P.S.

Many thanks we owe to internet savvy Karl Jeffrey for this one:-

The other night I was invited out for a night with the "girls." I told my husband that I would be home by midnight, "I promise!" Well, the hours passed and the margaritas went down way too easily. Around 3 a.m., a bit loaded, I headed for home. Just as I got in the door, the cuckoo clock in the hallway started up and cuckooed 3 times. Quickly, realizing my husband would probably wake up, I cuckooed another 9 times. I was really proud of myself for coming up with such a quick-witted solution, in order to escape a possible conflict with him. Even when totally smashed... 3 cuckoos plus 9 cuckoos totals = 12 Cuckoos MIDNIGHT!

The next morning my husband asked me what time I got in, I told him "MIDNIGHT"... he didn't seem pissed off in the least. Whew, I got away with that one! Then he said "We need a new cuckoo clock." When I asked him why, he said, "Well, last night our clock cuckooed three times, then said "oh *****." Cuckooed 4 more times, cleared its throat, cuckooed another three times, giggled, cuckooed twice more, and then tripped over the coffee table and farted.

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