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.

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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.


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.

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.

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).

Racer's picture

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

Sudden Debt's picture

At least BAC is back up and running :)

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. 

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.

IQ 145's picture

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

Squid-puppets a-go-go's picture


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

papaswamp's picture

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

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."

gwar5's picture

Slow boat to China alright.

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


goldsaver's picture

Damn, the American Airlines business model!

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."

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.

Cdad's picture


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.

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.

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??


SheepDog-One's picture

I dont 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.

Cdad's picture



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.


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>


Biff Malibu's picture

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

sunny's picture


(tc chatroom???)


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'.

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.

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.

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.

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!

ExistentialSkeptic's picture

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

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.

CrazyCooter's picture

I got this for my oldest nephew:

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.



SheepDog-One's picture

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

TheProphet's picture

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

DoChenRollingBearing's picture

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

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.

hedgeless_horseman's picture

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

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!

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.


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)...

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.

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.

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.

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>

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?

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.


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?