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Baltic Dry Index Plummets again


Cassandra Syndrome

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The BDI is respected as a leading indicator for the stock market. As a measure of shipping costs it is an excellent measure of world trade. The index is over 80% down from its peak last year, but did increase of its lows at the beginning of this year to reach 4300 in June. It has now halved since then as China pulls back on importing.

Baltic Dry is signalling new pullback in the stock market - City AM
 


Eorna

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Yet, people still talk about the global economy starting to recover. People are absolutely deluded, if they believe that the excess of the last 15 years, can be worked through in such a short time.
Newsflash people declining global trade is not a sign of recovery, esp. not a 4.5% drop in a week.
 

SamVimesBoots

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It recovered for a while because so little was shipped last year that people needed to rebuild a minimum level of stock.

Most of the "green shoots" bolloxology you've been hearing has been down to companies rebuilding stocks after running them right down to the bone over the last year. Stuff still isn't selling though.

As someone above said, we built up huge imbalances over the last 15 years that those in charge are desperately trying to prented don't actually exist.

Things won't get better for real until these issues are actually tackled. But the generation in charge almost everywhere prefer fairy stories, comfort blankies and bluster to actually rolling up the sleeves and tackling real issues.

IIRC the phrase in the US for the generation that fought WWII was "the Greatest Generation". The generation in charge right now though - 45-60 in most countries - are unquestionably "the Worst Generation", ever. Bunchy of weasely little shysters and conmen, the lot of them. We need a revolution, everywhere, bringing to power fresh Governments with a nice mix of good old-fashioned sense from the elder generations with the modern technical know-how and international experience (and bitter experience of just how badly the current generation have made a complete hames of things) of the 30-45 year olds.
 

seenitallb4

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anewbeginning

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Unemployment stability is the only thing that counts, nothing else (although the shipping index is important as an indicator).

You cannot talk about 'growth' while people are still being let go.

There has been a failure in a lot of countries to break the cycle of job layoffs leading to declining demand, leading to further job layoffs.

If demand falls, the economy usually goes one way.

And I include demand for houses in that. The lack of demand for houses has lead to a lot of construction workers being laid off.

Declining demand equals job losses. Unless governments intervene to shore up or save jobs, no economy can do well. Green shoots only really arise when demand picks up. You cannot have green shoots in a vacuam as Brian Lenihan or Brian Cowen would have us believe. Clearly they don't understand economics and the fundamental importance of demand to growth. Companies that produce without demand merely increase their inventory.

This time around I don't see economies bottoming out. I see them heading south indefinitely.

What probably ultimately saved the economic world after the Great Depression was re-arnament in Europe, Asia and the US leading to full employment. A similar scheme would be needed today to get a lot of people back to work.
 

meriwether2

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Small little article in FT today about it, market opinion stuff from some talking head.

He says the fall in the BDI is down to China's reduced demand for commodities, they being stockpiled to the hilt now.
 

Cassandra Syndrome

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Sorry for not updating this for a few days. Nothing has changed its still in the 2100s. Here's a article refering to it and to the myriad of other fundemental data in the US that highlights the hyperbole nonsense of this recovery talk.

Why This Isn't a Recovery -- Seeking Alpha
 

atlantic

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Cassie I have been banging on about the BDI and unemployment ,for months on this site to accountants and friends of mine.They don't want to know,they believe the Dow ,Naz,Ftse casino, media hacks are the real indicators .
The BDI is respected as a leading indicator for the stock market. As a measure of shipping costs it is an excellent measure of world trade. The index is over 80% down from its peak last year, but did increase of its lows at the beginning of this year to reach 4300 in June. It has now halved since then as China pulls back on importing.

Baltic Dry is signalling new pullback in the stock market - City AM
 

atlantic

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Its a good one.Great too if you are importing and shipping companies are trying the ould shaft.
Unlike most of the financial media, which is a lagging indicator.....
 

atlantic

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hiker

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Could there be an over-supply problem?
I'm thinking that during the boom new orders for container ships could have been made and they would be delivered just about now.
Loads of ships in an already decreased market results in a drop in trasnport charges.
 

Cassandra Syndrome

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New 20 month low, 1,621, has global trade grinds to a halt again. Begs the question why are the commodities at an all time? Money printing from thin air methinks.

The index, which gauges the cost of shipping commodities including iron ore, cement, grain, coal and fertiliser, fell 4.2 percent, or 72 points, to 1,621 points and was at its lowest since April 16, 2009. It has fallen over 25 percent since first dropping on Dec. 7 last year.
Baltic index at over 20-month low, supply rising | Energy & Oil | Reuters
 

farnaby

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New 20 month low, 1,621, has global trade grinds to a halt again.
The article states this is more to do with shipping capacity than a slump in demand. But then again, that capacity was surely brought back in to meet higher demand expectations so the excess is itself a worrying sign.
 

atlantic

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D

Dylan2010

One can draw a parallel with the food price hike stories. By the time the medja starts beating the drum about high prices and food shortages like they were in 08, it may be a sign that that we are at the terminal phase of this bear market rally out of 09.
Its an interesting indicator, you can fake income and jobs reports but not shipping movements. Might need some analysis though on the tonnage of shipping available? ie if more ships are chasing the same number of goods, then the index would drop too.
 

bob3367

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So without the graphs the global economy is stuck?

We knew that, anything else, from the negative nellies?
 

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