Skip to comments.Baltic Dry plumbs 25-year depths (Lower Than 2008 Catastrophe Levels!)
Posted on 02/02/2012 10:07:47 AM PST by tcrlaf
People often talk about the Baltic Dry Index as being a "canary in the coal mine". But right now, maybe "elephant in the room" might be more fitting.
The index of shipping rates for dry bulk commodities - such as iron ore, coal and grains - has long been considered by market afficionados as an advance warning system for changes in economic fortunes. When the index surges, it means shipping demand is spiking, a strong sign for a pick-up in economic activity. When the index plunges, it means ships are sitting empty - a sign of evaporating demand for goods.
What's it been doing lately? Dropping - fast and far.
The Financial Times noted that the Baltic Dry Index hit a 25-year low Wednesday, after falling for its 30th consecutive day. That's quite the losing streak - though it's one that financial markets have been pretty much ignoring as they marched blissfully higher in the early weeks of 2012.
(Excerpt) Read more at theglobeandmail.com ...
Gold up: $1759 Silver up: $34.28
Call it a glut, call it whatever you like, but Global Shipping Demand has fallen through the floor. And the Obama-worshipping mainstream media is desperately trying to ignore, for fear of making THE MESSIAH look bad.
I remember those pics...and, of course the answer is no!
I was on a thread on this subject and one linked article was comparing it to the S&P 500 and showing no correlation. Their conclusion was that the baltic dry index measures...shipping.
To which I responded, the S&P 500 represents...faith.
Only one of those things is tangible.
Here are just SOME of the ships sitting off of Singapore, idle, right now:
Move it around, or close in, and you see literally HUNDREDS of idle ships.
I remember how breathlessly the Bush-hating media reported this in 2008. NOW THEY IGNORE It.
LOL...there was a “Defeat ObamneyCare” ad of Newt’s in the side bar, when I clicked on your (marine traffic/idle ships) link :) Sweet.
Even if more ships have been put into service, creating over-capacity, somebody has to pay for those ships.....they are not free.
If they are not hauling cargo, you will see financial backers (banks) take a bath on this.
The article is meaningless without better documentation. You can have idle ships either because of declining shipments, or because the companies built to many ships. A much more useful indicator would be tons of cargo shipped (or scheduled to be shipped if thats available somehow). Without that information its entirely possible that much more stuff is being shipped year-over-year, there just happens to be a glut of companies vying for the opportunity to do the shipping.
Conversely, if 50% of the fleet suddenly sunk, the shipping rates would spike to near record levels - but that wouldn’t necessarily mean anymore quantity of cargo is being shipped.
The Baltic Dry Index has been a lousy indicator of future activity for the last several years.
Denver area is seeing a surge in economic activity. Houses and large ticket items selling like hotcakes all of a sudden. Hearing stories of multiple offers on real estate. My boat dealer friend says he’s sold 9 high-priced water ski boats in 5 weeks, very unusual to do in the winter. He also was 14% above last year’s numbers at the recent boat show.
That's exactly right. I have little faith in any of the vaunted indices we're constantly fed.
One that really annoys me is the NY Manufacturing Index. It will move, say, from 49.9 to 50.1 and the media will all report merrily that it's turned from downturn to growth without any understanding whatsoever of what the numbers actually represent.
I'm like you. Show me how many tons of aluminum were produced, how many car engines, and how many tons of milk. The Baltic Dry Index is about as useful as the Consumer Confidence Index.
“Are you hinting that the stock markets are nothing more than . . . than . . . A vast confidence game? “
Since TWIST, and Obama’s “Plunge Protection Team” began, yes.
Where do you think the $1.2 trillion dollars that was supposed to last past the 2012 election went?
Gotta keep the sheeple blind to what is going on, at least until after Nov 6, 2012.
But I bet the selling price he got for those ski boats was way below the 2007 selling price.
It seems that the price of high end toys has dropped far enough that the pent-up demand is now showing.
The used small aircraft market is also picking up a little bit, but at greatly reduced selling prices.
There are a lot of federal government jobs in Denver. Those parasites are not worried. They are the new money class.
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