The number of ships waiting to enter the Canal is now reported as in excess of 360. And according to Lloyd’s List, Fitch, one of the “Big 3” rating agencies (although the Bank of International Settlements, the “central bankers’ central bank”, should also be counted as “big”), is advising that the blockage of the Canal is a “large loss event” for reinsurers, “potentially reaching hundreds of millions of dollars”. But apparently, although “(p)ayout will further tighten pricing”, it won’t “impact credit profiles”. In other words, shipowners will get hit with higher insurance premiums, but they won’t have their credit ratings cut.
Just consider that. It means that the shipowners will either whack up the prices they charge operators, who will then seek to pass the price hikes down the line until they reach consumers, or else they will borrow loads of money to stop themselves from going bust – but not to worry, because the agencies will tell the banks it’s OK to lend to them. As for the end customers, they won’t be receiving higher wages to enable them to buy goods at higher prices: they too, if they want to maintain their living standards, will have to borrow money or work longer hours.