Crater? Implode? Tank? Plummet? Crash?

David Rosenberg is reporting that spot iron ore prices in China are "down to $70 a ton from $200 a year ago." I remember when that happened. Rio and Vale were negotiating with Baosteel to get the biggest contract price increase they could, so they were keeping supply off the market. That's when I made 40% each off DRYS and RIO. Now the demand side is gone. There's no credit, and who knows if it comes back anyway?

The government is doing the best they can. Maybe they're making things worse with guarantees. The problem with guarantees is that everything that's not guaranteed is drying up. Would it come back if the government didn't guarantee stuff and make it easier for people to avoid risk? Perhaps, but when the money market funds looked shaky, short-term T bills went negative, there's so much risk aversion. If the government isn't materially making things worse by guaranteeing too much, then it's even worse than I thought, because then there is no fix except time.