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31st Sequential Decline In Baltic Dry, On The Verge Of Breaching 1,900
And the leading indicators continue collapsing (ECRI later today): the BDIY has posted its 31st sequential decline, and has closed just barely above 1,900, at 1,902, and back to March 2009 lows. One wonders when the BRICmaster, Jim O'Neill, will ever put the appropriate spin on this particular statistic in his weekly permarosy missives.
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Not anymore.
Perhaps we should be calling this the "Baltic Dry Heaves Index".
Hank Paulson would be proud.
Awwwww, give the guy a cheezburger...
A forgotten word Stagflation is hovering in the air....
Another, more frightening term is no longer hovering. Deflationary Credit Contraction
I fear something much worse - I consider this a depression which has just been delayed through money printing.
+1
Spot on.
DavidC
See that disgusting rampjob in BIDU before the opening... Guess the FED just has to protect that from plunging aswell.
From yesterday's moronic posts on the BDIY thread:
"like, hey man, hasnt this been like posted yesterday??"
Anyway, more news to send the market surging on zero vol
ZP - awesome!
Is anybody else getting deja vu?
yeah - it's like deja vu all over again...
"Damn it,am doctor not a BRIC-Layer"
Even if ya smash a BRIC over O'Neill's head he'll fail to understand its made of sand.
"Mr sandman bring me dream".......yes time conjure up another dream.
Take two hits of hopium and blog me in the morning.
If you got any green shoots smoke 'em.
This represents more shipping capacity coming into the market. The Greek shipping powers know that the world economy is about to expand beyond anyone's wildest dreams so they build ships. Then you can get all of the iPhones that you want delivered to you on nice new supertankers from China.
Some people actually make that case for the declining BDI due to more capacity coming into the market. If that is the reason for the price volatility then the shippers earnings should be in the crapper or at bare minimum show some stress.
On top of that, the ship building industry would also take a hit. Ships are not a sexy investment in an environment of glut. How much steel do ship builders work with annually? Steel industry is going to hurt.
Korea is among the world's top ship builders. Not sure how much the yards account for their overall GDP but Korea is raising rates.
Good time to buy the shipping industry.
And as usual... stocks are cheap here /sarc
How would I go about comparing the BDI to a set of forward freight agreements? I wonder how Star Bulk Shipping compares to the BDI. They have 14 ships with a total capacity of about 1.5MT. They have forward freight agreements for about 1.6 years, totaling about 280M$. So their average daily rate is about 33.6k$. Put another way, on average, 33.6k$ will pay to move 107kT for a day. What other information do I need to make a relatively valid comparison to the BDI? (I realize the use of averages smears the data, but at least it is properly "typed", and can be improved) The BDI, as a number, is about an order of magnitude lower. What is it supposed to represent?
When my son was around 8 years old, he went through a period of lying. It lasted a few weeks and it took a concerted effort by the entire family to demonstrate to him that there are and were consequences to lying.
During this period, while being lied to, it always felt surreal and funky, as if I was living in 2 worlds. Most of his lies were transparent and easily discerned, but there was always just enough plausibility to them that one had to stop and think how one would attack and dismember the lie.
For as long as I can remember, the world as I know it has felt this way. Meaning for me the last 40 years or so. So much that we see, hear and read has the stink of untruth but it's hard to tell what exactly is wrong with it without looking closely. Worse, because we have been subjected to a non-stop assault of lies, half-truths and propaganda for decades there is no real basis for "knowing" where truth begins and ends.
There are some really solid indicators that are showing real distress in the markets and economy. But then we have the three ring circus called the stock market, and to a lessor extent the currency market, that seems to be signally things are not so bad.
Very surreal.
I have come to the conclusion that if I think I can predict the next move, then I am dead wrong and really need to plan for the opposite.
And this is the effect the really accomplished liars and sociopaths wish to instill in everyone. Once we being to question ourselves, we become ineffective and are taken out of the game or become easier to manipulate.
Bang on! You think very clearly...
Fish,
You are not wrong, most likely just early.
But, one thing is certain BDI does not lie. It is signalling a slow down in production. The question for the US is why? What is killing growth?
Using GDP to establish recession is very inaccurate in the presence of stimulus.
At some point you will see the media view debt, and unrestrained deficit spending, as a driver for negative growth.
Mark Beck
Why'd you teach him not to lie? With your knowledge of finance and his ability to lie, he could've chaired the IIF or been the head of the fed. I'm just saying.
Sounds very interactive. My technique was, upon discovering a lie, to spank the crap out of them, immediately and thoroughly.
After me, my adult children are the most honest people I know. Son was buying a soda the other day and got rung up for a small. He tells the cashier - "I got a large." The disgruntled cashier says, "so what? You want to pay more to this store?"
In the end, however, I like to believe that observing me being truthful was the best influence on them.
"My technique was, upon discovering a lie, to spank the crap out of them, immediately and thoroughly."
Yes, violence is always effective. So why not emotionally and physically beat the ones you love. It's good practice for when you beat the ones you hate.
Bullshit. It's this kind of pansy crap that's making the current generations into iPad loving metrosexual ninnies.
Spanking works great. I don't need a study to tell me that. Put my kids in a group of 100 other kids and you'll find that the other 99 sets of parents will pick mine as the best behaved, most self-assure kids.
The worst kids out there - the ADD/HDD daycare generation are the ones who never had a father get in their face and beat some respect into them.
Go to a birthday party. Find the most loud, disrespectful, obnoxious kid out in the bunch. That's your "quiet time" and "let's have a talk" kid right there.
Love the look on the idiot parents' faces when they're so impressed with my kids - do great in school, well adjusted, no behavioral issues, extremely independent . . . "how doooo you do it?"
Then I tell them. They get all horrified. "you spank? How barbaric!" Then their kids comes running up, "Mom, you're a whore, STFU." "Oh Trey, it's going to be quiet time for you when we get home after this party." FU Mom.
Hilarious.
Looks like I pushed some buttons. And clearly you didn't read my post. Let me help you.
My very first words were "Yes, violence is always effective." I agreed with you that spanking is effective. I never said it wasn't.
The rest of my comment talked about beating your loved ones so that they, and you, will be conditioned to beat your hated ones. Hummmm, maybe that was the button that I pushed.
My daughter will be 6 this month. She has never been spanked. She is the most well-behaved and well-liked little girl i've ever known.
I can't say I would take the same approach with a boy but there is no way I would lay a hand on my daughter. It's been my experience that there is simply no reason to.
Well, every situation is different. CD characterized my approach as having a "blanket approach." Not exactly. I did have zero tolerance for lying - you lie, you get spanked. I don't abide lying. It was the one thing for which I would not yield. Most other things were a case by case basis.
I've had scads of kids. Most when I was young and hadn't thought/learned about the world in which I live. I'd have none if I did it again. But it is what it is. After raising half dozen kids (and more!) you really get a chance to see what works and what doesn't with varying personalities. One of my kids was spanked maybe 10 times her whole youth. But another, much more than that.
Point is, if your kid is an only child, has a doting parent, is somewhat docile, lives a relatively controlled life, and so on, there may not ever be a need to spank. Don't spank for the sake of spanking. Spank to correct behavior.
As for "studies" that spanking makes your kid into Eric Harris, all I'll say is that those studies are done by PhD women who dump their kids in day care, send them to summer camp, get ADDH diagnoses, and then dope their kids up on psychotropic meds to keep them from crashing off the walls. To each their own.
As to what each kid needs, each kid is different and should be assessed accordingly.
Final note - you are not the person to judge your children.
I've seen plenty of parents whose kids were complete shitfucks and they had no idea. Why wasn't Brittney invited to the party Frank? Because your daughter is self-centered, insufferable, loud, rude, and has no concept of what "listening" entails. I beg your pardon? Britt is the most well-liked and well-behaved girl I've ever known.
I agree with all of that. My judgement of my daughter is in line with others that have observed her. Like i've said before, i'm not convinced i'd have taken the same approach with a boy. As a man who has seen too much of it; I will never lay a hand on a female of any age. They are different creatures in my mind.
What I most agree with is that you stated Zero Tolerance..
My daughter learned at a very young age that when daddy says it, daddy means it. It's a battle she has no chance of winning and she knows it.
When I discipline my daughter it is done with patience and love which is nothing like what was done to me. I explain everything to her even if I know she doesn't really understand it.
Her teacher told me this past year that her level of "commen sense" is far beyond any other child in her class.. She will probably be a ZH reader when she gets older.. :) LOL
Since you have had so many more kids than myself, I really don't think i'm qualified to give you an opposing argument on the matter. I mean that respectfully. You are right, my daughter is an only child and I think it does make a bit of difference.
Ultimately, the end product needs to be taken into consideration.
I think youre absolutely right CognitiveDissonance, pay no mind to these sissyfied american no-spankers, their kids are probably future 'wards of the state' already! I trained my hunting dogs and its a tough process to come down heavy on the ones you love but it pays off in the end greatly, they respect you for it and sure as hell gain their full undivided attention.
Excellent post Frank. So true -- everything you wrote.
"Spare the rod, spoil the child."
Max. Give us an update when she's 16.
I have no illusions of her behavior when she gets older. I'm certain it will be trying. At this point, my stern voice brings about immediate capitulation with any attitude.
I simply don't think a "blanket policy" of whipping or spanking is as fruitful as the prior generations believed it to be.
I have witnessed behavior of other children that would certainly bring my approach into question. Although, I think it has a lot to do with a parent not being consistant in discipline from the very begining.
My daughter fears me too much already for my comfort. I just can't imagine adding the fear of violence to invoke compliance. That's just me.
Thank you for respecting your child's right not to be beaten by the parent that "owns" him or her.
What is never discussed because it's a hot button and certainly in-your-face is the concept that a general policy of spanking is intellectually and emotionally an extremely lazy method of "parenting" if it could even be called that.
I always thought my purpose as a parent was to not only teach my children right and wrong but prepare my child for his or her life in the world. This requires nearly constant attention and molding. To simply spank a child is the shortest route to train or condition the child. But it teaches the child nothing other than the effectiveness of spanking. The child doesn't learn empathy, understanding, care and concern for those who are hurt by the child's (and soon to be adult) actions.
What it does do is lower the effort the adult must apply to train or condition their child. There is more to parenting than training and conditioning. If that were all it were, we could use robots. In fact, that's sounds like an adult that turns to spanking when the child does something wrong. Teaching a child a new concept can take days or weeks. Spanking is all over in a minute.
Spanking. That was easy.
BTW the original poster I responded to didn't talk about spanking. He talking about beating the crap out of the child. That's pure violence for violence sake. No parenting required.
BTW2, I'm not saying that spanking would never ever be appropriate. I'm saying it is the last step, not the first.
I agree with all of that.. Especially the part about being a difference between a beating and a spanking. I do think the gentleman that wrote that used it more of an expression. I doubt it was the beat down that was seemingly described.
Good comment CD..
Me and my girlfriend talk all the time about how bad our parents were and wonder why the hell they even became parents.. It was done the same way to them though..
Indeed it is time to break the cycle of violence in our society. I'm not saying we go to a mamby pamby approach to everything but there are some parents who take the route you described for the reasons you described.
Boy, this is a strange tangent for this article.. :)
My 17 year old son, always the best behaved per friends' parents...friends give him crap for being a grandma driver (he's trying to squeeze every mile out of a tank of gas and doesnt want to increase the insurance bill)...his younger brothers, the same (except ther driving bit...). We allowed them to try, and fail, or succeed, took the time to teach them WHY right was right, and wrong, wrong. If they broke it, they fix it, or replace it, or do without.
I can count on on one hand the times ANY of them have been spanked as I am the one who dished it out. Last resort or life-threatening only.
Always thought-provoking, CD! Thanks.
Your son was just preparing for a career in marketing...
.. and I thought it was going to be "politics"
Step right up there, son. Hurry, hurry, hurry (don't think). It's the Greatests Show on Earth. Fun for **Children** of All Ages. (you caught the emphasis, yes?, on *children?*) See the man pull money out of his ass! See the purchase of a home have even more layers of financial chicanery added to it! See the "leaders" on the high wire as they juggle nuclear weapons over your homes! Have we got a great show for you!
And as Jack as Joker sez: "And now comes the part of the show were I releave you of your miserable lives." Oooooo, the climax.
It's easy to know if the economy is doing "bad" or "good": just check the unemployment rate.
Since May 2009, the US has an U3 unemployment rate above 9 percent.
There's no way you can say the economy is not in a catastrophic shape while U3 unemployment rate keeps above the 9% line.
In May 2011 the MSM will say: "Look this great 24-month recovery with 24 months of U3 unemployment above 9 percent!"
Cognitive Dissonance
"it always felt surreal and funky...For as long as I can remember, the world as I know it has felt this way. Meaning for me the last 40 years or so."
If you would have started the meds sooner you never would have that breakdown. You know the one motivating you to spew new convert new agey hippie gobbledy gook babble like a born again christian.
Good Morning Gullible Foil.
How is my favorite incoherent cut and paste troll this morning?
Man, he/she has a thin skin. You politely ask him/her to not cut & paste entire articles into the comments and now everytime he/she sees you it's ad hominem time...
You first need to know some stuff about the BDI. Shipping rates for example are also calculated on the age of a ship. The older the ship gets, the lower the rates go. And as there are almost no new ships being build the average rates go down.
But because of the lack of investments over there, the rates will start to jump back up to the skies once the impact becomes clear.
To be honest, there are a lot of morons that just visit this site to look for proof about the world ending so they might get a new chance in getting their miserable live back together as a mad max person.
Just grow up. You failed in life and you won't get any breaks unless you do something about it.
ZH is a very good site, and I visit it daily. But if you only visit this site and read it like the bible, you clearly have mental problems.
Most of you freaks are spoiling this site with your fucked up remarks about digging a hole to live in and arming yourself. So PLEASE!! TAKE THE PILLS YOUR DOCTOR GAVE YOU!!
So the index halved in two months because THE SHIPS GOT OLDER? They are what, built by Dolce&Gabbana and are on sale as the F/W collection is coming?
There is a shitload of reasons why it's going down. But not because traffic is stopping. Look into my older posts.
And your remark just show your a idiot lemming without a brain. Yes ships that are older are cheaper. Look it up why, because I won't even bother to explain it to a fuck up like you.
Chumbawumba is posting under another name, I see here. I'd recognize your version of intellectually bankrupt cyber-bullying anywhere, Chubs... Yes, indeed. You are what's wrong with the internet.
There is also excess shipping capacity. Nevertheless, it is also priced in dollars. If you divide the index by the US dollar index, and ignore the 06-08 data, you are still left with a relatively lackluster chart; albeit better than the one above...
OHHH I see SuddenDebt...theres a 'shitload of reasons the baltic drys index is going down, and less shipping ain't 1 of em'...you list none of them except that ships are MUCH older now than a couple months ago? Thats the best you can come up with? Gee sorry about your massive long position in DRYS at the top.
+1000 :)
Hmm SuddenDebt I see none of these comments youre ranting about. Can you elaborate further?
@SuddenDebt
Go fuck yourself asshole.
The only condition worse than being blind is imagining that you can see.
Your posts on here are "imagining that you can see", ill thought out, full of analytical errors and factually detached from reality.
Just do yourself a favor and STFU.
He's also either a terrible typist or worse speller.
+100. His first point was fine. But WTF with jumping all over the guy who questioned him on it?
@SuddenDept - Douche.
It's just evolution. We fly. But you have nice, primordial wing stubs SD, so we'll let you hang around.
But we'll shoot you and throw you in the back of the hole for back up food if you get too loud.
FrankIvy
If you fly, then why act like trap door Spiders?
Maybe you should stay off the meds for a while and try and live sober.
Big Pharma is messing with your head. Has probably gone on for years.
Do you know the side effects of Ritalin?
To which I have to reply with the old jape that goes: "Sure I'm paranoid, but am I paranoid enough?"
But you have a point - the Roman world took several hundred years to drop from a rich empire to the depths of the so-called "Dark Ages". Locally there were "Mad Max" situations, to be sure, but in the early centuries of the decline people in much of the Emire didn't see much change at all. Even after the sacking of Rome itself in AD 410 by the Goths, the city recovered much of its' wealth and glory within fifty years or so.
Inertia is a Force that apparently can be applied to human behavior as well.
+1
Although unfortunately you have spoken the truth and will now be branded as a troll by a bunch of precious metal salesmen.. (no one seems to get the irony there.)
Oh I get it now.
It's European humor.
Sudden Debt,
Bro,there are four witnesses "flagging",they demand justice.I hear they want blood and pushing for a trial by execution.......all i know is the jury's out.....i'm gonna go out an arrange your bail Bro'
+ .5
Don't care much about shipping rates, but am very interested in human behavior.
One of the most enjoyable (and disturbing) parts of ZeroHedge are the voices from the peanut gallery. Very, very diverse crowd. Just like real life I guess, where most IQ's are in the 75-150 range, and mental conditions are somewhere between the mildly whacked to the seriously fucking whacked.
The IQs go higher than 150 here, FYI. You are right, the smarter they they are, the more insane they seem.
IMHO, some of the "higher IQ's" around here are starting to lose it. It's certainly understandable. I mean how long do you rationalize something that isn't rational? It would drive me crazy too, except for one thing, I am the village idiot. Keep it together, people, many are depending on you. Otherwise, the hate will begin to permeate - which it is already starting to.
Sudden Debt,
Interesting post.
Much like watching the television or reading the more ranting posts, you don't have to. Quite often I ignore them.
However, the main posts themselves...another matter.
DavidC
I read through many sites on a weekly basis, subscribe to 5 newsletters, and receive investment commentary from more than 10 major investment banks. I find ZH provides balance to the endless cheerleading and touting that passes for the great majority of investment analysis. ZH is one of the few sites that is not trying to sell you on any particular market, investment theme, product etc.
If the content offered seems unrelievedly negative, it may be because that is the true state of the US and global economy. Most of my friends have experienced losses of their net worth anywhere from 20-80% over the last 3 years. After taking 3 companies public, I learned that nearly all investment banks are peopled by crooks, bums, liars, treachers and con artists. Working with these assholes taught me never to trust what issues from their collective mouths. Hence, I was able to grow my capital in the last 3 years, instead of losing most of it by following a simple rule.. whatever they are touting, do the opposite.
Cant we sell credit default swaps on all that huge unused capacity? Everythings a tangible asset in the brave new world! Turn those machines back on and SELL! SELL SOMETHING!
bdi will certainly reflect this:
http://www.businessweek.com/news/2010-07-09/china-cuts-rare-earth-export...
rare earth is in the capsize portion of the index..
also reflects the idea of commodity price rise secondary to legislative changes (increased taxation) rather than reflection of increased consumption from a healthy global economy
any suggestions on how to best get exposure to rare earth's? thanks. also, while the baltic is ugly, North American rail traffic is way up:
http://railfax.transmatch.com/index.html
My understanding is that rail traffic is up because many freight (ie ship by truck) companies are going out of business or cutting way back due to lower shipping prices. I know several people that have been driven out of the industry, including several owner operators and one owner of a trucking company.
hadn't thought about that. makes sense. thanks.
Bingo! I have noticed lots more trucks hauling cargo containers lately. Not too many long haul trucks anymore.
The one thing I have seen is the disappearance of Walmart trucks and the like. Most of the trailers are reefers hauling produce again, same as last year.
Rare Element Resources (RRLMF)
FD: I do not own the stock.
as usual... it takes split seconds to correct downwards and several minutes to make it back up.
sell into the rally and don't look back.
might be one of the last opportunities.
So why did Maersk raise earnings guidance? I see a real disconnect between much of the economic data and the continued bullishness amongst CEOs. I don't know which is right. I tend to discount management's forecasting ability but they certainly have a strong insight on present conditions.
With so much of CEO compensation tied to stock performance, how can we expect CEOs' to be candid about their company's prospects when they are incentivized to be perma-bulls?
your point noted, but not all CEOs are perma bulls. many were certainly not bullish in 2H:08.
my question remains: economic data weak but industrials CEOs bullish. something is amiss
Bingo!
Maersk is mostly in the container and tanker trade not in bulk shipping which the BDI reflects.
FYI if you dont know it, ticker symbol BGZ is an etf that trades 300% the inverse of the russell 1000. last time this put/call anomaly happened was just before the flash crash...
http://www.marketintellisearch.com/articles/1027945.html
ego maniacs who believe that their life as a success or failure matters. humans are so self-important that they actually believe that each one of them was chosen by the guy in the sky with the white beard to come to earth and be important to other people. give me a break. humanity is a minor stain in the earth's underwear that will get bleached out of existence like the other species humanity has seen fit to exterminate. all we will leave behind will be plastic that the earth will change back into rock over the next billion years. we have no conception of our dispensibility.
cainhoy
Steps not the ladder.
Jim's spin - go ahead and save this to compare to his missive from St. Martin's in the Fields....
BDI dropping?? BRICs up!! reason? Cheaper shipping rates mean more spec. money going into the pockets of shipping magnates and we know how they love Chinese solars!!
Oh wait, was that Leo? Sorry.
Look on the bright side, it is getting cheaper to ship the BS around the world.
permarosy? more like permaliar.
Green shoot: LBJ signing with Miami Tarballs will trigger made-in-China plastics and shit and put millions of labor back in slave camps.
BDI led the markets for the last market crash indicator in 2008, it is doing it again. The warning signs are upon the markets, and Wall St. will sucker every idiot they can into the jungle, only to slaughter them soon.
just one question,,,,
cant they manipulate these indexes like the Baltic Dry and ECRI too...it would be fun!!!:)
Well Cramer said this was the best indicator of the global economy. He's been off all this week, but his "special" episodes when he is on vacation reiterated this last night. Hmmmm. I wonder if he will be talking about it next week?
Baltic Dry Index hits lowest level for 13 months
THERE are fears the long-anticipated crash in the dry bulk market has arrived, as the Baltic Dry Index freefall continued for the 30th consecutive day to its lowest level in 13 months, as shipowners prepared to take delivery of record numbers of new panamax and capesize bulk carriers in the second half of 2010.
“I think it could get fairly ugly,” said a prominent Europe-based operator of dry bulk tonnage, who declined to be named.
“Percentage wise, [rates] can probably come off another 50%, to a bit above operating cost levels,” he added, with stronger demand for dry bulk commodities only to return with cheaper transportation costs.
http://www.lloydslist.com/ll/sector/dry-cargo/article173189.ece
OK, the BDI is a measure of the cost of shipping. More ships means less cost. Now lets say that you, foolish you, started building a ship way back in the good ol days of 2008 or rearlier. A ship does not get done in a week or a month. Maybe not for a few years. When the economy starts go go into the tank, the builder has a difficult choice. My guess is that a lot of them decided to finish and hope for the best. So now we have a lot of extra ships. That means lower prices. It does not necessairly mean that the sky is falling.
And for what it is worth. My money is on Buffett. Few people have money betting against him.
So this means we have ships sitting about the Globe idle and out of work? Or are we building new replacement ships and sending old ones to the scrapyard?
The freight moves well enough on trucks, trains and such. There has to be quite a few ships keeping busy these days running about the world hauling stuff for revenue.
If the Baltic Dry is a Measure of overall shipping then we must only be in a quiet time until these ships are called upon again to start moving stuff again.
So let em sit. When we quit unemployment and get back to work in sufficient numbers, those ships will need to get moving again.
I wonder why the lamestream media never talks about the ECRI or the BDI? Could it be that they are pretty undeniable, "un-spinnable" indices? Hey Obama, how is that Animal Spirits working for you?
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