Posted on 08/23/2015 9:45:03 PM PDT by Perseverando
Three weeks ago, when we last looked at the collapse in trade along what may be the most trafficked route involving China, i.e., from Asia to Northern Europe, we noted that while that particular shipping freight rate Europe had crashed some 23% on just one week, there was some good news: at least the Baltic Dry index was still inexplicably rising, and at last check it was hovering just above 1,100.
That is no longer the case, and just as with everything else in recent months, the Baltic Dry dead cat bounce is now over, with the BDIY topping out just above 1200 on August 4, and now back in triple digit territory, rapidly sliding back to the reality of recent record lows which a few months ago we suggested hinted that much more is wrong with global trade, and the global economy, than artificially manipulated stock markets would admit.
More importantly, a major source of confusion appears to have been resolved. Recall that as we noted on August 3, "many were wondering how it was possible that with accelerating deterioration across all Chinese asset classes, not to mention the bursting of various asset bubbles, could global shippers demand increasingly higher freight rates, an indication of either a tight transportation market or a jump in commodity demand, neither of which seemed credible. We may have the answer."
We did. To wit:
"Should the dead cat bounce in shipping rates indeed be over, and if the accelerate slide continues at the current pace, not only will shippers mothball key transit lanes, but the biggest concern for global economy, the unprecedented slowdown in world trade volumes, which we flagged a week ago, will be not only confirmed but is likely to unleash yet another global recession."
(Excerpt) Read more at zerohedge.com ...
Yes. We may be seeing the beginnings of a slide. Have a look at the Dow future.
http://www.bloomberg.com/quote/DM1:IND
The BDI is all you need to know. Things are not good.
Isn’t Darwin Maitland the forum expert on BDI?
Didn’t you just post another thread about the stock market bubble? Seems to have disappeared.
This is why China devalued the Yuan against the dollar. It isn’t because they are declaring a currency war against us, it was because the dollar is rising against almost all currencies, especially the Euro. Since the Yuan is pegged to the dollar, this means that the Yuan is rising against the Euro too, which isn’t good for China since the EU is their largest trading partner. Chinese goods are getting expensive in Europe.
Well, this sort of reasoning should be a comfort to stockholders, I would think, since it is in the nature of an adjustment, which can find an equilibrium point.
It’s all a mystery to me! But then existence is a mystery to me.
i literally just left a comment on the other one.
Had me doubting my own sanity for a few minutes. I thought to myself, "Did I just imagine that?" "Is my memory that bad?"
I finally figured out the thread must have been pulled, and all replies deleted somehow, but that was a very unpleasant feeling there for a moment.
Too much government.
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