Posted on 02/05/2016 1:04:48 AM PST by 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)
(Excerpt) Read more at zerohedge.com ...
Drastic - a collapse in international trade.
Holy crap. What have tankers and bulk transport indexes done? Been a long time since I was a trader, but yikes. Get your ass out of the market and currency is not a hedge.
This is not good.
I don’t expect to see this reflected in the prices we pay at the grocery store. Maybe at the gas pump but nowhere else.
And ZeroHedge is not a place to get investment advice. I believe it was the one "reporting" that there was no ocean freight moving, anywhere, not too long ago.
Ammo may be a good hedge. ZH is forthright, in your face reporting/editorializing...I respect them more than those who comment there. We will have a crash soon...not sure how we can’t. I think Soros has bet on it.
I read most of the article.. Why didn’t they mention obamatrade? I just read about him signing TTP in New Zealand. Maybe after my coffee I can try to figure out why New Zealand.
I stopped investing in the market in 08. The handwriting has been on the wall for several years. Best investments: longterm food storage, and lead, copper, and brass.
The “collapse” in the index is due to the Chinese building too many ships. Those ships are all chasing a mildly reduced amount of traffic. In effect, they’ve built the equivalent of their ghost cities to ply the ocean waves.
“Drastic - a collapse in international trade.”
The BDI shows the cost of shipping, not the volume of shipping. It is relative to supply and demand in container ships, as opposed to an indicator of goods traded.
Wikipedia:
“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]”
Low BDI = lower cost of shipping goods.
Lower market costs are Double Plus Good.
Yes. I don’t plan on buying anything big. Now is not the time.
04 February 2016
Baltic Dry Index (BDI) -5 298
ZeroHedge is a joke. A setup to push gold sales. Check the ownership and the ads.
“ZH is forthright, in your face reporting/editorializing...I respect them more than those who comment there. We will have a crash soon...not sure how we can’t. I think Soros has bet on it.”
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.
The Chinese are trying to dominate the container market with these mega ships. This reminds me very much of the speculative boom in Very Large Crude Carriers before all of that collapsed.
Scrap Yards will be busy with a lot of older inefficient ships taken out of service
And he is triggering it. Hope he has an “episode” soon.
Thank you for the balancing information. Economics is always a complex picture.
What is?
Best investments: long term food storage, and lead, copper, and brass.
When times get really bad I can trade lead for anything I want. The food hoarders can only fight back with vegetables.
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