The upshot is more of the same. Global counterparty trade risk is not purely reflected in the TED Spread! It is global this time, indeed... if you are liquid long cash, you are going to crush the levered. This is what we call "The New Reality". Our RE Network comments from Canada are below:
All of my lentil/bean/pea aka. food commodity shippers/traders in Saskatchewan are buzzing about the rumored 2000+ Hapag-Lloyd Canada containers sitting uncollected at the port in Turkey. Their interest is domestic, as uncollected cargo generally means abandoned contracts, and in size, could result in the business failure of their competitors. Both an opportunity and a strong warning about doing business where you don't know your buyer. A few months ago, commodity prices for these food items were soaring, today some of these food staple prices are as much as 40% lower so buyers are abandoning their contracts (why pay 90 day old contracted prices when current price is deep discounted?)...there will be many buyers out there where reputation is not worth as much to them as saving 40% in product costs....just like on the street...memories are short and eventually someone will do business with them for the trade and they'll be buying again.
-Your Research Network Edge Contributor