This page has been archived and commenting is disabled.

Baltic Dry Free Fall Accelerates

Tyler Durden's picture




 

Last week, we pointed out when the BDIY dipped below 2000 for the first time since August. In the next three days, the index slide has accelerated and after dropping 3% just overnight, is back to 1830, just 130 points away from the 2010 lows printed in July. And while the index topped in early September following a brief and uninspired climb, it has since been a one way downward pointing slope. Whether the BDIY is a leading indicator to anything is debatable: some believe it is a completely irrelevant indicator. Others disagree. A very strong case for the former camp was made last week by Nordea which demonstrated, in its chart of the week, the average speed of its vessel fleet. One thing is certain: for whatever reason, demand for trans-Pacific cargo shipments is once again plunging.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 12/22/2010 - 10:39 | 823660 Oh regional Indian
Oh regional Indian's picture

Beady Eye? It's the surest indicator of global financial health. It's been called incorruptible.

In 2008, it was THE canary in the coal mine, largest percentage drop in decades. Hit it' slow in August 2008.

When it get's into triple digits, mark your calendars for 33 days and watch the fireworks, again.

ORI

http://aadivaahan.wordpress.com

Wed, 12/22/2010 - 12:23 | 823957 DoChenRollingBearing
DoChenRollingBearing's picture

If any CONTAINER ships have any excess Korean bearings aboard, stop into Callao (Peru), and we will take them off your hands.

Wed, 12/22/2010 - 13:22 | 824129 Oh regional Indian
Oh regional Indian's picture

DoChenRollingDealer?

;-)

 

ORI

Wed, 12/22/2010 - 20:33 | 825263 slvrizgold
slvrizgold's picture

I just thought I should point this out since so many seem not to understand:

The Baltic Index does NOT track container ships of finished goods.   It only measures BULK goods  - iron ore, copper, grains, etc.   Imagine a big 150,000 ton payload of steel or wheat.

Wed, 12/22/2010 - 21:04 | 825338 A Broken Bear
A Broken Bear's picture

The problem with the BDI is only partly economic, the bigger problem is that during the boom years ship owners went crazy and ordered way too many vessels. Today the Dry Bulk order book if fully delivered will increase the size of the Dry Bulk fleet some 62.80%, meaning the market has a MAssive supply opverhang.

And the BDI does not track container shipping (consumer goods).

Wed, 12/22/2010 - 10:41 | 823661 Racer
Racer's picture

Stop with the fundamentals TD, don't you know they are irrelevant in this rigged banksters casino?

Wed, 12/22/2010 - 10:50 | 823696 Sudden Debt
Sudden Debt's picture

At least BAC is back up and running :)

Wed, 12/22/2010 - 10:55 | 823716 hdunn2
hdunn2's picture

Lol i refuse to even look at the issue anymore.. it's up like 14% since December 1. On the news of fraud, extension of talks with Pimco/fed et al (which means the $800m reserves won't nearly be enough. those parties wouldn't have bothered extending talks for a measly 1.7% recovery, they would have gone straight to suit), and the looming threat of a (potentially devastating/pointless) Wikileaks dump, and foreclosure freezes.

 

  Oh, and Mort. rates way up and mort. applications down with a housing double dip almost a certainty. 

 

Blows the mind really. 

Wed, 12/22/2010 - 12:56 | 824066 HarryWanger
HarryWanger's picture

He has stopped with the fundamentals. Remember the -11% print on ECRI Leading Indicators that was going to lead to an assured double dip? Well, here it is now heading toward growth just down 0.1% or essentially flat. Pretty amazing turnaround and will now be positive. 

I guess we'll hear about the BDI while it's down too and conveniently forget when it starts to run up again like ECRI.

Wed, 12/22/2010 - 18:27 | 824965 IQ 145
IQ 145's picture

 It's simply impossible that the BDI should be irrelevant.

Wed, 12/22/2010 - 19:50 | 825180 Squid-puppets a...
Squid-puppets a-go-go's picture

+1

ignore the abstraction of percentages. The pragmatic reality lies behind the numbers and what it implies re promissory notes for shipping. If those that lend credit to shipments of goods lose faith that those goods will find buyers on the other shore, their prices become such that it is not economical enough for the manufacturers to bother shipping the goods.

the BDI is a massive indicator of pending unemployment

Wed, 12/22/2010 - 10:43 | 823668 papaswamp
papaswamp's picture

So what is raw material shipments are dropping...it means nothing....what?! finished product shipping is declining too (HARPEX)?!...all is well...Man the POMO pumps..full power!!!!

Wed, 12/22/2010 - 14:15 | 824218 Kali
Wed, 12/22/2010 - 10:45 | 823671 Cognitive Dissonance
Cognitive Dissonance's picture

A very strong case for the former camp was made last week by Nordea which demonstrated, in its chart of the week, the average speed of its vessel fleet. One thing is certain: for whatever reason, demand for trans-Pacific cargo shipments is once again plunging.

I can see it now. The captain calls for emergency reverse when the port of call comes into view. "Dammit, we need to kill some more time. Head for the south pole. That should burn off a few more months. Maybe we'll get lucky and hit an iceberg."

Wed, 12/22/2010 - 11:04 | 823740 breezer1
breezer1's picture

i want that in the log book...

Wed, 12/22/2010 - 10:44 | 823675 gwar5
gwar5's picture

Slow boat to China alright.

They should cut the number of boats, overbook, charge for luggage, and no more free drinks.

 

Wed, 12/22/2010 - 11:36 | 823826 goldsaver
goldsaver's picture

Damn, the American Airlines business model!

Wed, 12/22/2010 - 10:44 | 823676 Cdad
Cdad's picture

This chart proves only one thing, really.  It proves that folk over at the Blow Horn [CNBC] WILL NOT TALK ABOUT DRY BULK SHIPPING RIGHT NOW.  That is the only thing it proves...well...that and that stuff isn't shipping here in the middle of our "recovery."

Wed, 12/22/2010 - 11:38 | 823830 Don Birnam
Don Birnam's picture

Larry Kudlow used to fawn over the Baltic Dry, and its predictive value regarding the incubation of all those global green shoots -- when said index was rising, of course. Now that the paddock is looking a bit russet these days, Larry has seemed to have misplaced his BDI chart.

Wed, 12/22/2010 - 12:33 | 823990 Cdad
Cdad's picture

Don,

Well, losing that chart, that is expected, you know, as you get a little older while also still working at a network that long ago gave up any sense of duty or calling to be part of what folk used to call The 4th Estate

I'm sure some dimwit deep in the recesses of The Blow Horn will find that chart again after it turns up....or IF it turns up....and Larry will make reference then.

Wed, 12/22/2010 - 10:46 | 823678 notadouche
notadouche's picture

It's a big deal until it's not a big deal.  It was a big deal when we had the cascading crash discovered only after a few thousand points were trimmed.  It was a big deal when it was going up during the last 18 month melt up but now it's not a big deal since we are not done going up and it has apparently cratered.  Now when we lose a couple thousand points it will be a big deal again.  That's how Wall Street works and of course all the pundits who discover this again will have known all along that we were headed down because of the Baltic Dry Index.

Wed, 12/22/2010 - 10:45 | 823679 sunny
sunny's picture

Asia waffles lower, Europe is lower, the Hindenburg Omen appears and is confirmed, the euro is sliding, BDI is in free fall.  Let's see how the markets take all this news....

Nasdaq and S&P gap up at open.

Yep, serious panic out there.

What am I missing here??

sunny

Wed, 12/22/2010 - 10:51 | 823698 SheepDog-One
SheepDog-One's picture

I dont understand...you thought the lone market participants, Bernank and Sack would be in a panic this morning? Maybe theyll panic this afternoon if one or the other of em refuses to suck the others dick other than that maybe all is well.

Wed, 12/22/2010 - 10:55 | 823705 Cdad
Cdad's picture

 

Sunny,

Ummmm, you are missing that the US equity market has zero credibility...and what remains for that notion to be proven is the turn of the calendar...shortly after which many criminal syndicate Wall Street bankers will lose their jobs because, well, marking up prices did not cause Average Joe to come running back in to buy equities priced for stupid...ergo "it didn't work this time" and there is no money to manage...all coming together to confirm how short- sighted your comment is.

 

Wed, 12/22/2010 - 11:10 | 823754 sunny
sunny's picture

"Ummmm, you are missing that the US equity market has zero credibilityUmmmm, you are missing that the US equity market has zero credibility"

<sarc. on>

WHAT!!!  Next you'll be trying to tell me that "Change we can believe in" was not an expression of core philosophical belief, but merely a ruse, a head fake to get votes and that the intention all along was to continue war and debt accumulation.

Have you no soul to offer such evil thoughts at Christmas?!?

I'm crushed.

<sarc. off>

sunny

Wed, 12/22/2010 - 10:53 | 823707 Biff Malibu
Biff Malibu's picture

this wouldn't happen to be the same sunny from the tc chatroom would it?

Wed, 12/22/2010 - 11:12 | 823758 sunny
sunny's picture

No.

(tc chatroom???)

sunny

Wed, 12/22/2010 - 11:09 | 823751 papaswamp
papaswamp's picture

Hard to go down when uncle sam hands you $17 Billion to play with for the week and says...'go buy something frivolous like stocks'.

Wed, 12/22/2010 - 10:45 | 823681 gookempucky
gookempucky's picture

Wonder if my order for 100 empty containers will arrive so that I can rent them out to the public to store all the junk they bought for Xmas.

Wed, 12/22/2010 - 10:52 | 823700 Cleanclog
Cleanclog's picture

Or, you can move them to Germany, where they have leased out all the safe deposit boxes.  You can rent these out and leave them drifting around the world, filled with treasures for safe keeping. 

Inviting piracy of yore to return as an offset to the piracy of Wall Street.

Wed, 12/22/2010 - 11:08 | 823750 gookempucky
gookempucky's picture

Appreciate that idea cleanclog--with all those conex's floating about would give new meaning to walking on water-just wear a wet suit when traveling.

Wed, 12/22/2010 - 10:48 | 823688 SheepDog-One
SheepDog-One's picture

Consumers! Man ye battle stations! We order you to max out your credit card for the very survival of the nation of the USSA! 

Bah humbug, my nieces are getting a couple silver coins for Christmas and theyll like it or not!

Wed, 12/22/2010 - 11:31 | 823811 ExistentialSkeptic
ExistentialSkeptic's picture

My niece and nephews, too.  I hope it learns 'em sumthin. ;-)

Wed, 12/22/2010 - 19:36 | 825150 andybev01
andybev01's picture

Hopefully not that Uncle Skeptic has a stash, and what would be the easiest way to do him in, in order to get to it.

Wed, 12/22/2010 - 11:33 | 823814 CrazyCooter
CrazyCooter's picture

I got this for my oldest nephew:

http://www.thamesandkosmos.com/products/mc/mc.html

They are sold out all over, but T&K have some really cool stuff like this if any of ya'll got brains that run in the family.

Regards,

Cooter

Wed, 12/22/2010 - 11:39 | 823831 SheepDog-One
SheepDog-One's picture

Nope, no brains running around this here family tree...

Wed, 12/22/2010 - 16:44 | 824713 TheProphet
TheProphet's picture

Totally giving up on that kid ever getting laid I see.

Wed, 12/22/2010 - 12:25 | 823965 DoChenRollingBearing
DoChenRollingBearing's picture

I'm giving PMs to my nephews and nieces too.

Wed, 12/22/2010 - 10:49 | 823691 Sancho Ponzi
Sancho Ponzi's picture

Hey, it's nothing triple POMO days can't cure. Don't tell anyone, but HSKAX broke through $15.00 to close at $14.99.

Wed, 12/22/2010 - 10:50 | 823695 hedgeless_horseman
hedgeless_horseman's picture

I can fix this.  Move the USD printing presses overseas.

Wed, 12/22/2010 - 10:53 | 823703 Sudden Debt
Sudden Debt's picture

I've still got some place in my garage!!

Always willing to give a hand :)

You can even ship the paper and inks that go along with it!

Wed, 12/22/2010 - 10:52 | 823702 Biff Malibu
Biff Malibu's picture

I have developed another disturbing OCD habit.  Everything I buy now, I look at the label.  If it says made in China, I look to see if I can find another brand made somewhere else.  If I can't, I reluctantly put it in my cart, and feel very ashamed.  I made the mistake of telling two of my friends.  One of them said he was doing that already.  Another told me that once he heard I was doing it, he started doing it as well.  I'm just a hoosier in the midwest.  But if enough people feel that way, I can see that contributing to the drop in pacific shipping.

 

Wed, 12/22/2010 - 10:57 | 823722 PolishErick
PolishErick's picture

Look at what youve done! Youve killed the BALDRY!! Now china will have to switch back to old fasioned gulags (instead from the ones where the happy worker earns a 3 quarters a day)...

Wed, 12/22/2010 - 11:00 | 823727 Dr. No
Dr. No's picture

My habit is slightly different:  I look at the label and observe the price.  The item with the lower price, I buy.  I can best help my country by helping myself by saving more money.

Wed, 12/22/2010 - 11:06 | 823743 snowball777
snowball777's picture

If you rob your countrymen of work by enabling the oligarchy and their commie slave camp, you'll spend more defending yourself from them than you saved by snubbing them at Wal-Mart.

Wed, 12/22/2010 - 11:12 | 823759 tmosley
tmosley's picture

How does I make capital?

Buying overpriced American goods doesn't help anybody, except for the US government, who gets the green light to impose yet more regulation.

Wed, 12/22/2010 - 11:45 | 823850 Julia
Julia's picture

Absolutely. I love the lead Mattel jewelry for my young niece from China--it is so cute. And that drywall on my condo in Florida left such a wonderful odor, it reminded my of my uncles farts after a holiday dinner--olfactory memories are the best.</sarcasm>

Wed, 12/22/2010 - 13:40 | 824185 tmosley
tmosley's picture

How's your television, computer, microwave, coffee maker, and everything else in your house doing for you?  All those things are made in China, and none of them are contaminated.

Can you imagine Chinese people bitching about how crappy American produce is because of year old news stories about contaminated spinach and peanuts, even as they eat a meal that contains 50% US agricultural products?  Same situation.  You don't even remember the E.coli scares we had last year, do you?  Does that mean you will refuse to eat anything raised in America?

Wed, 12/22/2010 - 11:51 | 823870 snowball777
snowball777's picture

If you aren't interested in having a functional domestic economy, then you're not interested in having a functional economy at all long-term.

It definitely helps the small businesses in your area stay open and create jobs for people who could be casing your car stereo right now.

I also prefer to buy items which are less likely to be laced with melamine or lead, but perhaps you have a coupon for a free chelation from a health insurance provider.

 

Wed, 12/22/2010 - 13:37 | 824171 MachoMan
MachoMan's picture

So um...  who gets to pick which jobs stay, how many, and how much they are subsidized to keep up with their competition?  And from who does this money originate?

Thu, 12/23/2010 - 00:00 | 825540 snowball777
snowball777's picture

Us and us, respectively.

The idea in play is individuals supporting "Made in the USA" merchandise over equivalent Chi-Com wares when possible (within the limits of the stocking choices of local retailers, for example...tough to find a US-made TV).

I'll gladly pay a premium to avoid funneling money to my enemy and screwing my neighbor and I generally get the value back or avoid paying more for crap than it is worth, however cheap in price at the cashier.

 

Thu, 12/23/2010 - 11:34 | 826080 MachoMan
MachoMan's picture

I'll posit that your plan for collusion will be a short lived phenomenon at best...  and...  in all practical sense, patently impossible given squeezes on discretionary income.  Essentially, you will be asking people to starve to support solidarity among american businesses that are likely no more deserving of our money than foreign counterparts.

It's neat in theory, but it will fall flat on its face (and has fallen by the wayside because of the relative perceived value of the respective products).  Further, it seems that differentiating between "american" and "other" products is fairly difficult...  given items like toyotas for example are often times manufactured in large part in the united states and, thus, taxed to a substantial degree here, in one way or another.  What do we do with mixed country products?

In addition, if the only thing supporting my country's manufacturing base is some religious zealot solidarity for its products, I'll be taking the other side of the bet and wait for collapse in 3, 2, 1.  Ultimately, competition is the determining factor of the victor.  It's kind of like olympic wrestling versus the WWE...  if you want a rigged, closed system, fine...  but the term "champion" doesn't quite have the same ring to it.

Wed, 12/22/2010 - 13:36 | 824172 tmosley
tmosley's picture

That is your choice, but it isn't helping.  The only way to help is to get rid of the last 30 years of regulation and cut taxes and government spending to the bone and beyond.  Erecting trade barriers will only destroy capital in the US, and will actually HELP the Chinese, because they will get use out of the goods they produce rather than continue stockpiling US paper.

99.999% of chinese goods are not contaminated.  If you recall, the CEOs of the companies responsible for the contamination were PUT TO DEATH.  You probably won't see a repeat of that.  Besides, China has moved away from the manufacture of cheap crap like toys, and manufactures much more in the way of high end goods.

But then, China bad, USA good is an argument of some type.

Wed, 12/22/2010 - 17:46 | 824870 fiftybagger
fiftybagger's picture

+ 1.3 billion

Thu, 12/23/2010 - 00:10 | 825546 snowball777
snowball777's picture

I don't think individuals choosing to support American labor actually counts as a trade barrier; the cheap Chi-Com crap would still be on Wal-Mart shelves, there'd just be a market for American-made goods as well.

I can't see the wisdom in attempting to become China through deregulation and have no desire to live in brown clouds at ground level to save a buck.

Yeah, I think slavery, censorship, and oppression are definitely in the bad/unnecessary quadrant. I'm not convinced of USA good of late, but I know what it could be.

Wed, 12/22/2010 - 11:03 | 823738 snowball777
snowball777's picture

If you find yourself feeling the sting too often, you might try other, preferably smaller, retailers in your area. China makes the big-box stores big.

 

Wed, 12/22/2010 - 11:48 | 823855 Julia
Julia's picture

And it makes all the Dollar stores bigger too.

Wed, 12/22/2010 - 11:58 | 823887 Vendetta
Vendetta's picture

Good for you and all who do the same. I rarely buy stuff these days except food and am looking for another way to fight back besides with PMs.

Wed, 12/22/2010 - 12:27 | 823974 DoChenRollingBearing
DoChenRollingBearing's picture

Name like Vendetta probably means guns & ammo would be a good option...

Wed, 12/22/2010 - 12:03 | 823910 Drag Racer
Drag Racer's picture

I live in an area that is highly supported by tourism. Many small stores selling the basic tourist trinkets. One doing quite well has a big sign out front reading 'Not Made in China'

Wed, 12/22/2010 - 12:52 | 824052 Id fight Gandhi
Id fight Gandhi's picture

I've been doing the same thing. Nike, coach bags, Harley davidson, ugg boots. All things demanding premium prices made in china at slave labor.

Why should I pay for this? I have the family doing the same.

If it's Chinese, get cheap online or used.

Wed, 12/22/2010 - 10:53 | 823710 Dr. Copper
Dr. Copper's picture

This is just like the ghost fleet of ships sitting out in the ocean that was supposed to portend doom for the economy.

Wed, 12/22/2010 - 11:39 | 823835 SheepDog-One
SheepDog-One's picture

True, all is well...continue credit card buying spree of cheap Chinese crap.

Wed, 12/22/2010 - 10:54 | 823711 Stuck on Zero
Stuck on Zero's picture

Simple solution:  The Fed can start buying hundreds of container ships and sink them.  Demand for container ships will then go up and voila, all is right!

Wed, 12/22/2010 - 11:03 | 823718 hedgeless_horseman
hedgeless_horseman's picture

War, huh, what is it good for?

http://www.youtube.com/watch?v=h__zgVz9fN4

Wed, 12/22/2010 - 11:54 | 823873 snowball777
snowball777's picture

I've been wondering how they planned to deep-six all that Maiden Lane paper.

Wed, 12/22/2010 - 12:24 | 823960 the grateful un...
the grateful unemployed's picture

and then claim the insurance money, (AIG) and when AIG is broke, bail them out, perfect!!

Wed, 12/22/2010 - 10:58 | 823721 Jason T
Jason T's picture

Must be the lack of copper demand.

Wed, 12/22/2010 - 11:04 | 823736 Dr. No
Dr. No's picture

Perhaps, like back in 2008 (oil), JPM will lease ships off shore to store the copper.

Thu, 12/23/2010 - 00:11 | 825548 snowball777
snowball777's picture

Paging Somalia...

Wed, 12/22/2010 - 10:59 | 823725 RobotTrader
RobotTrader's picture

SunTrust and many of the other banks are still rocketing.

SPY priced in Euros hitting yet another high, still going parabolic.

Macro traders relying on stuff like the BDI continue to get steamrolled by this huge bull market.

Wed, 12/22/2010 - 11:08 | 823747 snowball777
snowball777's picture

Sweet...there'll be something for the conservators to work with.

Wed, 12/22/2010 - 11:13 | 823761 Careless Whisper
Careless Whisper's picture

watch out for that STI rocket, robo, it may go kaaaboom;

http://www.ebaumsworld.com/video/watch/647046/

 

Wed, 12/22/2010 - 11:19 | 823783 thepigman
thepigman's picture

>Macro traders relying on stuff like the BDI continue to get steamrolled by this huge bull market.<

Not even sure anyone is buying anything

aside from the PDs. Where do they

offload? Some Caribbean dark pool

off balance sheet subsidiary of the fed?

 

Wed, 12/22/2010 - 11:02 | 823729 RobotTrader
RobotTrader's picture

U.S. Dollar still rocketing up, even though we had some horrid new home sales again.

Wed, 12/22/2010 - 11:18 | 823772 Internet Tough Guy
Internet Tough Guy's picture

Oil still rocketing despite talk of it being 'bludgeoned, blowtorched, blasted'. No oil chart? lulz

Wed, 12/22/2010 - 11:41 | 823837 SheepDog-One
SheepDog-One's picture

Robo havin trouble postin charts on the bus.

Wed, 12/22/2010 - 11:52 | 823869 geminiRX
geminiRX's picture

Thinking the same thing you were.......enjoy peak oil robo:)

Wed, 12/22/2010 - 12:02 | 823908 Vendetta
Vendetta's picture

Rockets go up then come down after its QE fuel is burned

Wed, 12/22/2010 - 22:39 | 825443 innertrader
innertrader's picture

I like your analogy..!

Wed, 12/22/2010 - 11:01 | 823734 Miramanee
Miramanee's picture

BDI is fine as a short term indicator of demand and the ability to secure short term letters of credit. But we know from the past 2+ years that using the oscillations in the BDI as an indicator of long term contraction is erroneous. That said, if the index reaches the lows that it reached in its decent from june 2008 to december 2008, people WILL suffer.

Perhaps we need to create a human toll and suffering index.

Wed, 12/22/2010 - 11:07 | 823737 virgilcaine
virgilcaine's picture

This doesn't bode well for commodities.  I wonder when GS and JPM will offload their capesize vessels full of crude, floating in the Mediterranean.. lol

Wed, 12/22/2010 - 11:22 | 823789 gookempucky
gookempucky's picture

 I wonder when GS and JPM will offload their capesize vessels full of crude, floating in the Mediterranean.. lol-I'll add all the oceans.

BTW dont put it past these slimballs to deep 6 those cargoes- keeps up the appearance of demand.

Wed, 12/22/2010 - 11:05 | 823744 RobotTrader
RobotTrader's picture

JPM about to break out to fresh, new 6-mo. highs.

Meanwhile, big cap gold stocks like GOLD continue to get monkeyhammered.

PigMen win again!

Wed, 12/22/2010 - 11:19 | 823779 Internet Tough Guy
Internet Tough Guy's picture

Monster truck drivers monkeyhammered by high oil price. You got a 30 gallon tank, robo? lulz

Wed, 12/22/2010 - 11:25 | 823801 Careless Whisper
Careless Whisper's picture

are you. out. of. your. mind.

the 5 yr chart of JPM looks like crap. the 2 yr is crap. the 1 yr is crap. the only jpm chart that looks good is the 2 day, and that will probably end tomorrow.

the 1 yr of BTU gets me hard, the 2 yr makes me pop.

 

Wed, 12/22/2010 - 11:42 | 823815 SheepDog-One
SheepDog-One's picture

All is well Robo, practically springtime for Hitler!

Wed, 12/22/2010 - 13:49 | 824210 the rookie cynic
the rookie cynic's picture

JPM is still as broke as it was in 2008. Extend and pretend...bailout, extend and pretend...bailout, extend and pretend...bailout. We'll see how long (to use Janet Tavakoli's jargon) "fraud as a business model" will continue.

As an aside, 3 new Chase banks went up in my zip code in the past 6 months. The little guys are gettin' eaten.

Wed, 12/22/2010 - 22:35 | 825439 innertrader
innertrader's picture

That's interesting!  I saw the same thing happen in Chicago back in the 80s!  The banks that got bailed out were expanding like crazy a few years later!  Sick shit!

Wed, 12/22/2010 - 11:08 | 823746 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Shipping rates are also affected by supply of cargo vessels. New vessels are coming onto the seas, ordered during the boom years and only now finished. So the BDI is probably not as good an indicator as it was if you have to factor in that shipping rates are depressed because of more shipping capacity coming online.

Personally, I am more worried about how Chinese banks are trading.

Wed, 12/22/2010 - 11:12 | 823757 Dr. No
Dr. No's picture

In Sep it was 3000.  In dec it was 2000.  A 33% increase in productivity due to addtional ships comming on line?

Wed, 12/22/2010 - 11:25 | 823799 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

I wish I could remember where this was analyzed (shipping capacity as a monkey wrench in the indexes accuracy).

If I can find the article (maybe I saved it) I will post it.

 

Wed, 12/22/2010 - 11:19 | 823777 Charlie
Charlie's picture

I agree. Actual volume of world trade would be more interesting and relevant.

Wed, 12/22/2010 - 11:21 | 823792 TheGoat
TheGoat's picture

+1

Wed, 12/22/2010 - 23:36 | 825510 IQ 145
IQ 145's picture

 Wrong.

Wed, 12/22/2010 - 11:10 | 823756 TheGoat
TheGoat's picture

Some of the support for this index is now gone. Record grain shipments from Australia were completed  in the 3 months to 30 Nov. We needed the storage space for a bumper harvest which is now arriving at local silos, the record high prices were also a good driver to empty as much storage as possible.

Wed, 12/22/2010 - 23:37 | 825515 IQ 145
IQ 145's picture

 Present situation negative for the AUD.

Wed, 12/22/2010 - 11:16 | 823768 MGA_1
MGA_1's picture

Seriously.. the feds got our backs !

Wed, 12/22/2010 - 11:21 | 823778 doggis
doggis's picture

Due to the egregious derivative plays from NATURE, i have unilaterally decided to repeal the laws of GRAVITY. TD you have been co-opted as my media mouthpiece of choice to educate the world of this change. this means nothing - ABSOLUTELY NOTHING - falls, which conversely means that everything - ABSOLUTELY EVERYTHING FUCKING FLOATS!!!!

now i suggest to all of you geniuses located in the financial ivory towers of lower Manhattan to go to your hermetically sealed, floor to sealing 40 storey windows - smash said windows open, and JUMP.....i guarantee to you all - you will ALL FUCKING FLOAT!!!!

 

Wed, 12/22/2010 - 11:20 | 823782 Liars Poker
Liars Poker's picture

What do you guys think about www.nacocapital.com, I signed up....

Wed, 12/22/2010 - 11:21 | 823791 Bokkenrijder
Bokkenrijder's picture

Couldn't it also be that more capacity is added to the market?

 

I'm an airline cargo (!) pilot and I know that the company I work for is saying that demand is great, but competitors are adding capacity again which was previously parked in the desert, resulting in dropping yields.

Wed, 12/22/2010 - 23:39 | 825517 IQ 145
IQ 145's picture

 NO. it researchable; it didn't happen.

Wed, 12/22/2010 - 11:25 | 823804 Don Birnam
Don Birnam's picture

<< Baltic Dry Free Fall Accelerates >> Just buy the effin' dip.

Wed, 12/22/2010 - 11:44 | 823846 SheepDog-One
SheepDog-One's picture

Might have to start scoopin the poop, as a part time business!

Wed, 12/22/2010 - 11:44 | 823848 tmosley
tmosley's picture

Soon enough, I'll be renting cargo ships to take me around the world.

It's the only way to travel.

Wed, 12/22/2010 - 11:26 | 823806 virgilcaine
virgilcaine's picture

Probably not a 08 type crash since we are at much lower supply levels but could be a decent 20-30% 'correction'. But alot of hopium is priced in the Mkt also .

Wed, 12/22/2010 - 11:32 | 823812 snowball777
snowball777's picture

Curious to see if we replicate the Jun '08 drop in BDI of -18% in < 2 weeks.


“Before I draw nearer to that stone to which you point,” said Scrooge, “answer me one question. Are these the shadows of the things that Will be, or are they shadows of things that May be, only?”

Still the Ghost pointed downward to the grave by which it stood.

“Men’s courses will foreshadow certain ends, to which, if persevered in, they must lead,” said Scrooge. “But if the courses be departed from, the ends will change. Say it is thus with what you show me!”

Wed, 12/22/2010 - 11:42 | 823824 SheepDog-One
SheepDog-One's picture

Theyve conditioned the sheeple americans that stock markets=economy, thats why their only concern is the market pump machine. They know they cant afford ANY market correction here or the people lose it.

I think its so cute theyre trying desperately to restart 75% Borrow to Consume credit nation...yea I say theyre fucked.

Live by the sword, die by the sword. Real catch-22 theyve built for themselves.

Wed, 12/22/2010 - 12:18 | 823944 Fix It Again Timmy
Fix It Again Timmy's picture

OK, Apple, you need to introduce iPhone3,421 and a new cross-eyedPad.  Because of you slackers, the BDIY is in the doldrums!  Here in Atlanta, the CSX Intermodal railyard is looking very bare...

Wed, 12/22/2010 - 13:09 | 824100 haskelslocal
haskelslocal's picture

Pretty sure the baltic dry doesn't measure container ships but....

Wed, 12/22/2010 - 23:41 | 825519 IQ 145
IQ 145's picture

 I'm pretty sure too; the name is quite indicative; it's an index of lease costs for bulk shipping; bottoms; eg. iron ore; wheat; etc. not containers involved.

Wed, 12/22/2010 - 13:13 | 824102 Kali
Kali's picture

All the intermodal railyards by seaports on West Coast I have seen in the last 3 years have been EMPTY.  Used to have the containers stacked 4 or 5 high before that.

RRs are still storing excess rail cars of all types in the boonies and desert.  Heard UP is attempting to resign a contract to store a bunch of them for another couple of years in a small county I sometimes work in.  They have already been there for two.  The cars are rusting/not being maintained, but worse yet, the RR beds underneath them are eroding and they won't be able to get them out anyway.

I tell the locals to get blow torches and start cutting them up for scrap metal, the RRs dumped them there for good.

When I see the intermodal shipyards fill up and these abandoned RR cars in the boonies removed, then I'll believe recovery is here.

Wed, 12/22/2010 - 23:43 | 825524 IQ 145
IQ 145's picture

 Correct. all the classical measures of economic performance indicdate that this is a dead cat bounce.

Wed, 12/22/2010 - 12:27 | 823972 the grateful un...
the grateful unemployed's picture

you have to believe there is a ton of overcapacity, in just about everything, even credit, which is at the top of the list. Then of course no one wants credit. Then it all flows downhill from there. The lull in shipping traffic may only reflect this reality, America saying, thanks we already bought our Christmas presents, but you there, with the crude oil, come on in. Not good when discretionary income goes for food and energy, and your economy runs on discretionary income.

Wed, 12/22/2010 - 13:55 | 824235 BearishFeijoadaSushi
BearishFeijoadaSushi's picture

as in copper, maybe it's just jpm hedging its silver position with some ghost supramaxes

Wed, 12/22/2010 - 17:12 | 824780 mt paul
mt paul's picture

Hindenberg Cruise lines.... 

slow boats to China are fine 

but blimps are sublime...

 

Wed, 12/22/2010 - 19:00 | 825049 jimbo
jimbo's picture

One point not mentioned....the rise in consumption intra Asia is offsetting declines in the rest of the world. Take a look at automobile sales in China - higher than USA. A few years ago, that would have been unthinkable. So, less finished goods being exported to the rest of the world, is offset by more finished goods consumed within China.

 

Wed, 12/22/2010 - 23:45 | 825527 IQ 145
IQ 145's picture

 No. not offset. do your homework; look up the numbers.

Wed, 12/22/2010 - 19:24 | 825101 Bob Sacamano
Bob Sacamano's picture

One day, one month and one year charts always make we want to look at the bigger context.  Looking at last 10 years and overlooking the 2007-08 run up to 11,800 and crash to 663, an 1,800 reading is low but not shockingly low.  It has spent lots of time in the 2,000 - 4,000 range.

Context matters.

Wed, 12/22/2010 - 23:48 | 825530 IQ 145
IQ 145's picture

 And while you're looking at these one year charts, you never look at the rate of decline or increase? Maybe your right; but for the present; the BDI is a powerful anti-consensus indicator.

Do NOT follow this link or you will be banned from the site!