World's Biggest Containership "Hard Aground" As Baltic Dry Crashes Below 300 For First Time Ever

Zero Hedge ^ | 2-5-2016 | Tyler Durden

[blam]

Tyler Durden
February 5, 2016)

Before this year the lowest level The Baltic Dry Index had reached was 556 in August of 1986 and the highest was in June 2008 at a stunning 11,612. Today saw the freight index hit a new milestone however, crashing through the 300 barrier for the first time ever - at 298, this is almost 50% below the previous record low.

Commodities obviously are saying something very different from "the market"...

>

And as Dana Lyons notes, of course much of the input into the BDI comes from the price of raw materials. Considering the deflationary spiral in commodities, the drop in the BDI to all-time lows shouldn’t be a shock.

(snip)

The Baltic Dry Index has become a trendy thing to mention in recent years when discussing global market and economic conditions. The truth is, nobody really ever knows for sure what the broader message is behind the index’s behavior. That said, this recent plunge is making it quite difficult to conceive that it means anything positive in terms of the global economy and deflationary pressures.

(snip)

[Maine Mariner]

You can be rested assured that Soros and others will make money on this.

[mad_as_he$$]

Vaca opportunity.

[mad_as_he$$]

Collapse of the price is indeed because off too much capacity. Look at the unit movement it is also in a serious down trend.

[SkyPilot]

I watched the 2 part TV series on Bernie Madoff that was broadcast the last couple of nights. Madoff was correct about one thing. He said, "I ran a Ponzi scheme within a much bigger Ponzi scheme.".

By that he meant the Central Banks, Wall Street, and our Federal government. He was and is right. The day of reckoning is quickly approaching.

[catfish1957]

I have invested successfully my entire life,could have retired at 41, waited till 55, and have averaged 71% annual increase on what I call Return on Worth, for the past 30 yeas. I am an obsessive saver and investor.

While I do not adhere to the lead,foottuffs, and metals philosophy, I can honestly say I am seeing some precedent setting trends that I haven't seen at least in my investing lifetime.

I think the Baltic index is a pretty good barometer of what overall world financial conditions are heading toward. I expect a very bearish extended market for years. Right now, I am avoiding like the plague tech stocks, and anything, repeat anything of an equity that is speculative in nature,and anything with low P/E ratios. Also am only going after low debt , well run companies that have products that have sustainable long term demand

I can not and will not predict how low the markets will go or when this is going to happen.. All I know is we are going to see something at least as bad as 2008-2010. And in this era "real time investing (i.e example of of flash crashes),, it will happen fast. In my particular case, I am only staying (repeat staying) in those stocks that provide the essentials. Fuel, Food, Pharma, Home. and Real Estate I also expect at the trough, there will be some once in a lifetime bargain opportunities too.

What has got very little press lately, and shockingly is that the debt has reached $19T Folks, this is unsustainable As our enemies drive to take the dollar off as reference currency, and likely push toward a world-wide currency, this little event if going to be a rocky road. Not a gold bug, but protect yourself.

Finally, I have people who ask advise, and i refuse to give it. Every person's financial situation is different, and there is no one size fits all. But i will mention one observation that i told someone recently..... In my 30 years, I have never seen a situation, like now, where there is absolutely no decent choices of financial options to invest in. The Fed, Our government, et. al. have painted all of us into corner.

[DuncanWaring]

When times get really bad I can trade lead for anything I want.

Keep in mind that you may find yourself trading lead for more lead.

That sort of trade has the potential of a very adverse outcome for you.

[bert]

From Wiki.....
The Baltic Dry Index (BDI) is an economic indicator issued daily by the London-based Baltic Exchange. Not restricted to Baltic Sea countries, the index provides “an assessment of the price of moving the major raw materials by sea. Taking in 23 shipping routes measured on a timecharter basis, the index covers Handysize, Supramax, Panamax, and Capesize dry bulk carriers carrying a range of commodities including coal, iron ore and grain.”[1]

Most directly, the index measures the demand for shipping capacity versus the supply of dry bulk carriers. The demand for shipping varies with the amount of cargo that is being traded or moved in various markets (supply and demand).

[SkyPilot]

Real Western Capitalism does not exist any longer. Central bank manipulation, endless QEs, ZIRP, and all the rest have destroyed true Price Discovery. Moreover, Treasuries have been propped up, with everything else measured against this false baseline. The ship is going to run aground. No one knows exactly when, but it is now inevitable.

[catfish1957]

"I ran a Ponzi scheme within a much bigger Ponzi scheme.".

His point was around derivatives. The derivatives securities scam is proof of that.

If the gov. bails these turds out again after their next day of reckoning. Watch for a revolt.

[CincyRichieRich]

So you trust the anti-Western, Pro-Russian Romanian at ZH more than FReepers? Wonderful. ZH has been a buzzard on Western capitalism since 2009, circling high overhead (in Europe) waiting for a crash. Like Soros, ZH’s ‘success’ is dependent upon others’ failure. Except they won’t make any money out of it, just vindication of some unknown bitterness towards Western capitalism. Seven years on and ZH remains like an angry widow waiting on some unknown vindication.

---

Justa, I don’t appreciate putting words in my mouth; I did NOT say I trust ZH more than Freep. Freepers post ZH articles; there is a lot of savviness there and it is one of my sources of keeping up as I do not watch MSM news. Pro-Russian? Come on.

[Jim Pelosi]

I’m hoarding booze and toilet paper. They will be very high in demand.

[CincyRichieRich]

All is good, no worries, we were told today that the unemployment rate is now 4.9%.

Gaslight.

[blam]

The Unemployment Rare Falls To 8 Year Low (4.9%)

[SkyPilot]

Agree.

I wager someone with your experience could tell us a great deal about derivatives.

What was amazing about Madoff's 40 year scam was that he never made a single trade. He simply put the billions from his "investors" into a Chase Manhattan bank account. A single account. It had billions of dollars in it. Madoff would pay his older investors their impossibly large yearly returns using the newer money from recent victims - a classic Ponzi. Madoff admitted he was amazed that neither Chase nor the SCC bothered to even question him about that bank account.

Madoff didn't care who he robbed. When the 2008-2009 crash caused his investors to demand their cash back, he didn't care who he robbed. He equally took his secretary's life savings of $150K and his childhood friend's half a Billion with equal gusto. Both lost everything. Some of Madoff's clients lost 2, 3, or 4 Billion.

Our Federal and State governments are also running Ponzi schemes. Everyone knows it. Ponzi schemes always fail.

[r_barton]

Interesting map plots showing shipping routes

Watch the world’s ships sail Earth’s oceans in REAL TIME - 22 May 2014
http://www.dailymail.co.uk/sciencetech/article-2636152/Watch-worlds-ships-sail-planets-oceans-REAL-TIME-Interactive-map-reveals-crowded-routes-taken-worlds-vessels.html

[exit82]

Thanks for your perspective and for sharing your experience.

Your statement is very true and bears repeating:

In my 30 years, I have never seen a situation, like now, where there is absolutely no decent choices of financial options to invest in. The Fed, Our government, et. al. have painted all of us into corner.

[combat_boots]

J. Paul Getty robbed his own grandmother (financially) on a Christmas Eve, long ago, to fund his oil company. True story.

[Justa]

Sorry about the mistaking “there” for “here” equating criticism of ZH posters to FReepers. My mistake.

The pro-Russian accusation is accurate. ZH’s is anti-Western, pro-Russian. It’s founder (although he doesn’t admit it) Romanian Daniel Ivandjiiski, was penalized for insider trading in New York in September 2008. His blog is little more than sour grapes motivated by resentment at being caught cheating the markets in 2008.

[exnavy]

Big smile. Maybe someday after the crash, our paths will cross. I intend to survive, a while, God willing.

[gnarledmaw]

There is no such creature as a Chinese company or a Chinese container ship, there is only the Chinese government and Peoples Liberation Army Navy transports. They are planning to lose some soon.

Must be one hell of a storm coming...