The total increase in the oil tanker fleet over the next three years is going to see almost 20% more ships.
Oil tanker fleets are going to see share prices drop more.
At $12 per share I said a year ago these shares were going lower. I came back at $8 per share and said they are going lower.
So here I am again. The tanker fleets are just taking too many ships over the next three years on ship orders from three years ago. This 20% increase in ships will lower share prices on this sector another 25%. Will this drop in equity to debt breach loan covenants and cause shares of tanker fleets to drop more and throw some into bankruptcy? I believe it will.
These shares are going to $4 in opinion, you might want to leave now.
This is a Greek company. CNBC just had the president of France's largest bank on today. He said the Greeks are unable to collect taxes from their population.
This CEO said Greece does not have the ability to pay the bonds back.
I'm thinking that the population of France and Germany do not want to continue to finance the Greeks spending habits any more. That is why the Germany leader, Merkel has seen her party lose 5 state elections in Germany this year. They do not like her position which is to turn over German taxpayer money over to the Greeks.
If Greece defaults it is like ten years ago when Argentina defaulted. The country and stock market in those countries dived. That reflects negatively on this company. So Tsakos has the surplus in tankers, slow world economy and potential Greek default. All of these elements to hit in the next 12 months.
actually the scrapping estimates have been falling short and still the numbers of ships and the cargoes they can carry are increasing each year.
More ships in 2012 than 2011. What do you think that does for rates and profits?
These shares are either going lower or higher. I'm predicting lower, you are predicting higher.
I do not see how more ships in 2012 compared to 2011 does not result in bankruptcies which impacts the sector in terms of share price.
Also, I believe the world economy in 2012 will be more negative than 2011. Remember, Bank of America is going to let 40,000 to 45,000 people go next year. The European banks need to increase capital ratios, so they need more cash. European banks have lost 25-50% of their value in the last quarter. How do you think they get more cash? They cut overhead.
The post office wants to cut 200,000 people next year to eliminate $6-7-8 billion loss per year.
Governments in Europe and the U.S. are bloated. They are going to make cuts. This all has an impact of spending, not only at corporate levels but by a scared population.
When BofA cuts 45,000 people how many buildings hold those people. They are going to be empty and turn the power off.
At $4 per gallon gas in the U.S. and $7 per gallon gas in Italy where I just visited, people drive less.
Too many ships, people spending less, less demand for energy in 2012, what does this mean for shippers?