Posted on 04/23/2011 4:48:03 PM PDT by blam
Isn't that always the case?
I think it’s still the same downturn.
(BTW - I thought this was a La Nina story, but found it interesting anyway).
She was quick and said tell Roger Alies he doesn't pay enough and where are these high paying jobs.
He countered well your housing should be cheaper
All the others on the panel rip him a new one
Obama lover.
I know that there are FReepers out there that understand this stuff. More importantly, what does one do with cash if that is the long position in ones portfolio?
This is all pretty dry.
Dry bulk shipping is shipping raw materials like coal iron ore, wheat, raw materials for factories from port to port, and usually internationally. Dry bulk, along with all other shipping, took a deep dive in 2008 whan the financial crisis began, but has since stabilized. However, there are two big factors hitting dry bulk shipping right now, and for the next two years.
The first is China. China kept the dry bulk market afloat almost singlehandedly since 2008 due to their stockpiling commodities, and massive infrastructure growth. This is now, however, starting to fall off, and China is heading for much lower growth. Secondly, all shippers misjudged the markets in 2004-2008, and over ordered new ships. These have been delivered now, and dry bulk shippers are dealing with massive oversupply. This causes the shipping rates to collapse.
Basically the demand to transport raw materials is dropping and therefore future industrial production that uses these materials is likely to drop. Hence a downturn is ahead.
That the index has returned to the historic norm, again if I'm reading the graph correctly, in the face of another spike in fuel costs, says to me that business is going wanting. Whether that's due to oversupply of ships, which is touched upon in the article, or it's due to falling demand, which should be the case given the recent setbacks in the west as well as China pulling back, or if it's due to some combination of the above, is not clear.
Despite apparent past reliability, I don't think this is as solid a leading indicator as it's being made out to be, as a result. The world economy has been distorted almost beyond recognition in the past three years. It may mean something. It may not. It may mean something that is outside of current understanding, too, along the lines of Rumsfeld’s “unknown unknowns.”
BTW, You REALLY know evrything there is to know about
this Baltic stuff.
I’ve been following the BDI for a year. It is a very reliable forecast of what is coming. Not perfect. But reliable.
The VIX on the other hand...I used to follow that and now realize it is worthless. It no longer predicts volatility. It simply reflects what has already happened in the markets. I don’t even bother with it any more.
” what does one do with cash if that is the long position in ones portfolio?”
IF there is a crash soon, then cash is king, like it was in 2008. That was deflation.
IF inflation continues into the fall, the dollar will continue to fall, and cash loses value UNTIL that crash comes and hopefully the dollar bounces back up. IF.
I am not a trader, but those are the basics. I am 50/50 PreciousMetals and cash. This way I am betting that either way it goes, something will go up, but I am using a technique were being nimble is not important. I am not all in on one bet.
Please read more, and do your own due diligence.
The commodities are not overvalued. Well, maybe they are a bit and they may correct somewhat. But what the rising commodities are actually telling us is that the US dollar is losing its value.
I’m no investor or financial planner, but the basic idea is that if the dollar is losing its value, it’s best to invest those dying dollars in something that will maintain its purchasing power (e.g., the commodities).
Over 30 black swan events listed one month ago, most now in play:
Silver: Revisiting the Silver Bear Black Swans
Many came true and / or are still in play.
It's funnier to listen / watch the original cartoon that this came from:
but it seems that commodities and stocks are over valued. Is that correct?
It is not that the commodities are over valued, it is that the dollar is weak. You can thank QE2 for this. The more dollars we print the less they are worth.
The difficulty I have with the chart is that we are now at a low point. A high point was visited just before a huge downturn in the stock market. If we were about to face another big fat downturn soon, one would expect a higher point on the chart for the present, no? Somebody help me out here.
Seems like good news... it's NOT just that shipping has decreased - it's also an oversupply of ships.
Seems like good news... it's NOT just that commodities shipping has decreased - it's also an oversupply of ships - taints the reliability of the Baltic Dry Index...
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