Baltic Dry Plunges By Over 8% Overnight, Most Since 2008

Tyler Durden's picture

It has been a while since we looked at the Baltic Dry Index, which when normalizing for the excess glut in dry container ship supply (such as right now - 5 years after all the excess supply in the industry - has long been normalized), continues to be one of the best concurrent indicators of global shipping and trade. We look at it today, moments ago it just posted an epic 8.2% plunge, crashing from 900 to 826, or the biggest drop since 2008! Of course, conisdering the collapse in global trade confirmed in past days by both Chinese and US data, this should not come as a surprise, although we are certain it will merely bring out the BDIY apologists who tell us that supply and demand here (like in every other Fed-supported market) are completely uncorrelated.


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kridkrid's picture

Nope. Austerity is the opposite of what they want and need to do. People who clamor for the government to live within its means either, 1) do not understand how our monetary system works or 2) understand how the system works and are in the "let's crash this sucker already" camp.

Aggregate debt must expand or the system collapses. The system doesn't care who takes on the debt; corporations, consumers, or the govt, only that debt expands. 2008 was, give or take, the breaking point for the system. What we've been doing since then is allowing the govt to backfill. Austerity is the opposite of this. "austerity", loosely translated shoud read, "the forced reduction in services in order to squeeze the remaining life out of the system in the form of interest payments on debt that can never be repaid, while still expanding said debt". It doesn't fit on a bumper sticker, sadly.

DonutBoy's picture

The last option is for the Fed to extinguish all US debt they hold by decree.  That's flatly illegal but there'll be no option.  It'll be the swan song for the Fed.  That should be pretty much it for the dollar I would think.  It will be hard to stick one's head in the sand after that.

SmallerGovNow2's picture

"that the emperor has no clothes..."

Don't we already know that?

exi1ed0ne's picture

Depends on if you consider a cockring and a light coat of oil clothes.

eclectic syncretist's picture

Which is exactly why we are going over the fiscal cliff.  Raising taxes helps sustain the illusion that the imaginary debt the Fed creates has real value.

NEOSERF's picture

Statistics that are in conflict with le Stabilitee shall not be discussed.  Only the potential of more printing which shall keep the tide from ever going out is important. 

SheepDog-One's picture

QE457 awaited! YAY!

But wait, I thought QE was now a negative? 

wagthetails's picture

so if Jan 02 is any indicator, get ready for explosive upside!!  I predict the index to rocket to the moon as the Fed from aroudn the global begin to ship container ships full of their worthless money to each other in an attempt to manipulate this index.  No one F's Ben Bernake, Ben Bernake does the F'ing. 

Caviar Emptor's picture

Relax, this is all because of the fiscal cliff. As soon as that's fixed this economy will go right back to it's 'winning ways'

The Reich's picture

Supply/Demand scale has become very sensitive lately, but you ain't seen nothing yet, bitchzes.


This is not rock bottom!!

Caviar Emptor's picture

Wait...demand is relevant? Benny sez if we just print the money to pay for stuff, then bizness is good...

SheepDog-One's picture

It's now improved, Braver and Newer style!

LawsofPhysics's picture

When goods and services stop crossing boarder, troops will...

same as it ever was.

fonzannoon's picture

This global devaluation poker game is going to be interesting when everyone else cashes out and Ben is sitting at the table by himself.

LawsofPhysics's picture

I maintain my original hypothesis;  Once all the real wealth and physical assets have been claimed by the TBTF conglomerates around the world and the real owners have their tribes in order.  A universal police state society, much like the current chinese state, will be imposed on the earth.  The real power brokers in China and America have been on the same page for quite a while and have learned many things from each other.  Regarding all the paper promises and debt, all the central banks (who really serve as the control points for the owners) will get together and re-negotciate everything, effectively evaporating derivatives and any debt or risk that they had on their books.  You will still be reasponsible for your debt of course.  The good news is there will be numerous dead-end, debt-slave, government/coroporate-sponsored positions for you to work the rest of your life at.  The true power brokers know exactly what they can get away with from the experiences of people trapped in the toy/tech factories of china and the prisons of America.

Personally, I am in capital preservation mode, not hiring, not firing, trying to produce the minimum product and save on the maintenance costs for my equipment so we can simply stay in business.  It takes real commodities and energy to keep this equipment running.  Tell me Mr. Bernanke, what is inflation in these areas dumbass?

fuu's picture

"A universal police state society, much like the current chinese state"

Lol, look around you. The police state already circles the globe.

That slope has already been slipped down.

GCT's picture

Agree LOP.  Greece is the heart of the experiment on how much the people will tolerate misery before they have a real rebellion.  TPTB will learn from this experiment and implement this globally.   They must first continue to kick the can down the road while they transfer all the wealth to the CB's and the global elite. Buy up all the tangible assets and move on to the next herd of people.

Those with clear titles to land may actually win and keep there small holdings.  Those with tangible assets like PM', fiearms and ammo better be good at hiding them.

The takeawy from all of this is to stop playing the debt game altogether.  This does take time, but once your debt free the feeling is wonderful. Living within ones means is really not that hard if you actually plan long term.  Of course the sheeple on goveernment handouts may in the end along with alot of us get culled as currently the system is not sustainable with the current population.  Syria is the next spot for the USA military and of course our stupid politicians backing people that basically want us dead.

We cannot have all those trained military people home when the naive people actually start to wake up.  

SheepDog-One's picture

And it will only take the FIRST player to announced he's cashin in his chips. Who will it be I wonder? Last time all it took was 'overnite electronic run on the banks'.

Jafo's picture

The real economy is stalled and the people know it.  The Fed is trying to make believe that this is not the case by pumping the financial economy while praying that somehow there will be a contagion effect from the financial economy to the real economy. 

Hope is NOT a strategy.  Hasn't anybody told them that?

GetZeeGold's picture



Hope got elected......twice.

wagthetails's picture

perhaps a 3rd term is necessary

GCT's picture

Wag so 2016 is when the real shit hits the fan!

buzzsaw99's picture

to a junkie the next hit is always the strategy

BurningFuld's picture

Bush had the right idea....checks for everyone!!!!!!  Oh wait everyone is already getting checks...never mind.

LongSoupLine's picture

Ships aren't needed to export inflation.

Fuck you Bernanke. Eat shit.

Caviar Emptor's picture

Dunno why this didn't get more coverage :

Japan Enters Recession

Oh..guess we know why MSM hushed it

pokrova's picture

See what happens when we stop making/shipping Twinkies!

GetZeeGold's picture



Don't joke.....I'm down to my last Ding Dong.

Tsar Pointless's picture

Your last one? I've only ever had one ding dong my entire life.

Don't know why that would be such a problem for you.

Oh, wait - are we talking about the same thing here?

toomanyfakeconservatives's picture

Pay no attention to the epic plunge behind the curtain.

mayhem_korner's picture



Are by-camel shipments of gold from Istanbul to Tehran included in BDI?  If so, we should see a big jump soon and all will be well once again...

Glass Seagull's picture

And in unrelated news: "Fed to begin printing money in order to buy ships and freight futures."

Sigep0612's picture

Our government with their lemmings (Media) keep pushing back the day of reckoning.    You really have to ask yourself "What's the point?"   Does Obama really believe that water doesn't flow downhill?   Is he really trying to defy gravity?  

"A good portion of speaking will consist of knowing how to lie"  -Erasmus   

oby11's picture

BULLISH!!! QE2infinity. Keep the zombie news coming. The real economy died 5 years ago. Hope and QE 4ever.

Village Smithy's picture

Baltic Dry is no longer relevant, things are so prosperous that companies are just using air freight.

Albertarocks's picture

Yup!  And even though the costs for constantly having to clean those planes loaded with coal have risen sharply... they seem to be able to afford 'em.

helping_friendly_book's picture

Horizontal drilling has put a dent in coal demand.

I can see a huge difference when I drive over Afton Mountain and I don't see and smog. I can actually see 20 miles. Big difference in the last few years.

China is building a nat. gas pipeline from Kazakhstan and will convert more power plants from coal to nat. gas.

It's even effecting CSX bottom line. 

Village Smithy's picture

To whoever junked me, stick around a bit and you'll see that sarcasm is one of our main forms of communication here in the ZH forum.

falak pema's picture

 u mean canada dry humour on the rocks?

Iam Yue2's picture

Why the Harpex Index is a betting guide than the Baltic IndeX!


Boilermaker's picture


ES now crashing.  It's only up 3 handles and rising slower than normal!!!


SheepDog-One's picture

'Reality' is uncorrolated in this world.

forwardho's picture

Sheepdog, in this case, brevity is the soul of wisdom.

Nothing more need be said.


rsnoble's picture

So is this about the time the stock market reverses and goes down a 1000 points in 3 days so we can have 6 months of mini-rallies and nothing but bad news is good news to come right back to where we are now and convince everyone everything is booming?  Funny how fkd up people's brains are.  This circus is coming to an end.

SheepDog-One's picture

Or maybe this time they just pull the rug out and say 'Sorry all your moneys and 401K's and whatnot seem to have been 'Corzine' sorry suckers, welcome to the new order of the world'. 

drivenZ's picture

maybe, but not because the BDI is down 8%. doesnt mean anything.