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Baltic Dry Collapses To Worst Start To A Year On Record

Tyler Durden's picture




 

If you listen very carefully, you will still hear absolutely nothing from any talking-heads of the utter collapse that the last few weeks have witnessed in the Baltic Dry shipping index. The Baltic Dry has dropped 12 days in a row and plunged back to $1061 - its lowest since August 2013. This is the worst start to a year on record... must be the weather.

 

The Baltic Dry has dropped 12 days in a row and is now back to its lowest levels since August 2013... and almost post-crisis lows...

 

Which is the worst start to a year since records began 30 years ago...

 

The last time we saw a year start like this was 2012 which saw massive concerted co-ordinated central bank easing in Q3 to save us all... it seems that is not coming anytime soon this time...

 

Data: Bloomberg

 

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Wed, 04/09/2014 - 10:49 | 4639188 LawsofPhysics
LawsofPhysics's picture

When real goods and services stop crossing borders, troops will...

 

Can I interest you in a financial "product" of mass destruction?

 

Tick tock motherfuckers...

Wed, 04/09/2014 - 10:54 | 4639211 ArkansasAngie
ArkansasAngie's picture

It's those dad gum Chinamen.  They are hoarding their plastic doodads.

Inventories are rising because companies are hoarding too.

screw'em

Wed, 04/09/2014 - 11:08 | 4639262 Headbanger
Headbanger's picture

And damn!  It just keeps raining in the Baltic too!

So no wonder their dry index keeps falling. 

Sheeesh..  It's the weather again..

Wed, 04/09/2014 - 11:11 | 4639272 Big Slick
Big Slick's picture

Honestly, in the 1st chart, I don't see a change in either the Index level or cyclic activity that goes back quite a ways that warrents this alarmist conclusion

The 2nd chart is unclear if previous years' levels are YTD for all (i.e., early April levels for every one) or full year data for each and YTD for 2014.

A better case needs to be made for the conclusion you make. 

Wed, 04/09/2014 - 11:11 | 4639280 Headbanger
Headbanger's picture

Indeed.

But shirley you jest.

It's all global warming and Al Gore's fault for causing it.

Wed, 04/09/2014 - 11:13 | 4639286 Big Slick
Big Slick's picture

Indeed it is... and stop calling me Shirley

Wed, 04/09/2014 - 11:14 | 4639289 ParkAveFlasher
ParkAveFlasher's picture

Here comes my 19th nervous breakdown!

Wed, 04/09/2014 - 11:29 | 4639356 25or6to4
25or6to4's picture

@headbangef
Don't be silly! Everybody knows the Baltic freezes over in the winter time thus no shipping can get through. See, simple explanation. Long icebreakers!

Wed, 04/09/2014 - 13:02 | 4639754 yogibear
yogibear's picture

And they keep ramping the market up.

Wed, 04/09/2014 - 11:14 | 4639269 Big Slick
Big Slick's picture

:)

Wed, 04/09/2014 - 10:54 | 4639214 LetThemEatRand
LetThemEatRand's picture

Don't ask for whom the bell tolls; it tolls for Jamie.

Wed, 04/09/2014 - 10:57 | 4639225 fonzannoon
fonzannoon's picture

Tyler I hope you put up the Santelli Segment that is on right now with Biderman where he is discussing not only how bullish he is but how he is planning on going long right after April 15th.

You would at least think with all these bankers suiciding themselves this guy would have done it a long time ago.

Wed, 04/09/2014 - 10:57 | 4639226 BandGap
BandGap's picture

Just like Bud Dry, why ask why?

I guess we're out of life boats and preservers?

Wed, 04/09/2014 - 16:59 | 4640806 Catflappo
Catflappo's picture

Wow!  It's back to its lowest level since January 2014, and July 2013, and January 2013!  And September 2012!  Oh, and January 2012!!!

Yawn.

 

Wed, 04/09/2014 - 10:49 | 4639192 101 years and c...
101 years and counting's picture

i think its time to start blaming el nino.  

Wed, 04/09/2014 - 10:57 | 4639228 Sudden Debt
Sudden Debt's picture

or el putin or el bush or el.... yellen...

Wed, 04/09/2014 - 11:07 | 4639261 SilverIsKing
SilverIsKing's picture

it's la yellen

Wed, 04/09/2014 - 10:50 | 4639194 Hindenburg...Oh Man
Hindenburg...Oh Man's picture

That should be good for a 2-3 minute market decline, then some dip buying...

Wed, 04/09/2014 - 10:51 | 4639200 Quinvarius
Quinvarius's picture

Our economic leaders just pooped a little bit.

Wed, 04/09/2014 - 10:55 | 4639216 Sudden Debt
Sudden Debt's picture

yeah, over the railing from a 50 story building... wear a hat..

 

Wed, 04/09/2014 - 10:58 | 4639235 BandGap
BandGap's picture

Hat won't stop a turd missile from 500'. Just sayin'.

Wed, 04/09/2014 - 10:53 | 4639202 buzzsaw99
buzzsaw99's picture

The probrem is that china can't deliver moar ships on time. [/sarc]

Wed, 04/09/2014 - 10:53 | 4639203 q99x2
q99x2's picture

De-globalization bitchez.

Interesting.

Wed, 04/09/2014 - 10:54 | 4639206 1stepcloser
1stepcloser's picture

Round Eye need buy moar shit they not need!  

Wed, 04/09/2014 - 10:54 | 4639207 Sudden Debt
Sudden Debt's picture

ANOTHER GREAT FACT!!!! TITANIC DID SINK AND WAS NOT UNSINKABLE!!

God managed it afterall so it seems...

Wed, 04/09/2014 - 11:06 | 4639258 Quinvarius
Quinvarius's picture

Some say the real Titanic did not sink.  There is some evidence to suggest the damaged sister ship was renamed to the titanic and sunk on purpose in a case of insurance fraud.  The real Titanic sailed on for decades.  Just thought I'd throw that out there in this age of discussing the morals of bankers.

Wed, 04/09/2014 - 11:09 | 4639268 SilverIsKing
SilverIsKing's picture

Are you telling me that I wasted $10 seeing that movie?

Wed, 04/09/2014 - 11:15 | 4639291 ParkAveFlasher
ParkAveFlasher's picture

That $10 movie got me laid!

Wed, 04/09/2014 - 12:08 | 4639528 forwardho
forwardho's picture

The fact that you Did waste your money is not contingent on the truth.

Sometimes, the movie just sucks.

;)

Wed, 04/09/2014 - 10:55 | 4639219 HRamos_3
HRamos_3's picture

So we're taking metrics into account now?

When did that happen?

Wed, 04/09/2014 - 11:01 | 4639245 A_Nejad
A_Nejad's picture

Seriously speaking, most of the world run on Metrics so..

Back to the subject, could have the direct correlation with China's mess, but man it looks bad.  Better catch up with an old friend at Mærsk soon..

Wed, 04/09/2014 - 13:23 | 4639863 Iam_Silverman
Iam_Silverman's picture

"Seriously speaking, most of the world run on Metrics so.."

Yeah, no shit.  I had to head on over to Harbor Freight the other day and buy a metric Crescent wrench just to work on my new Chinese bicycle!

Wed, 04/09/2014 - 10:58 | 4639231 Bunders
Bunders's picture

Must be the fracking bonanza has lowered the cost of marine diesel to such an extent that the cost of shipping things has dropped such that it looks like there is less activity when in fact, as can be seen from the S&P500, the economy is roaring along.

(sarc)

Wed, 04/09/2014 - 10:59 | 4639238 Spungo
Spungo's picture

Fuck the dry index. Tell me about the wet index. Does it breast feed?

Wed, 04/09/2014 - 11:02 | 4639247 A_Nejad
A_Nejad's picture

LOL...I see what you did there Spungo!! :)

Wed, 04/09/2014 - 11:38 | 4639400 toadold
toadold's picture

The Wet Index depends on how many ships Putin sends into the Baltic Sea. 

Wed, 04/09/2014 - 11:01 | 4639243 Quinvarius
Quinvarius's picture

How in the heck did we make money outsourcing when that thing was at 80,000?

Wed, 04/09/2014 - 11:23 | 4639325 Kirk2NCC1701
Kirk2NCC1701's picture

Store Cash+PM for liquidity. 

Get and store everything else for Living & Bartering: e.g. Food, Water filtration, Tools, Parts, Meds, T/Paper, Toiletries, 80 Proof stuff, etc.

Form or join a good sized group of like-minded people, who are willing to solve problems and work together, not hide from them or splinter into irrelevance.  And beware of those with belligerent and extremist views of the universe (no matter what banner they fly) -- just because some sheep-shagging, semi-literate, smelly guys from hundreds or thousands of years ago said so. 

Hate to tell you this, but there is no "Big Daddy in the Sky" looking after you, in case you still need that fable to behave like decent human beings, or to sleep at night.  There's just us chickens, and there is No Fate, but the one we make.  Sorry.  In the meantime... "Religion is what keeps the poor from killing the very rich who are assholes".  It is also what provides a nice lifestyle for its best purveyors/salesmen, as they work hand-in-glove with the rich & powerful, and have done so ever since Emperor Constantine became a Christian an the First Pope (who was responsible for the New Testament as we know it).  Kirk out.

Wed, 04/09/2014 - 11:59 | 4639490 Boxed Merlot
Boxed Merlot's picture

Store Cash+PM for liquidity…Form or join a good sized group of like-minded people, who are willing to solve problems and work together…

 Hate to tell you this, but there is no "Big Daddy in the Sky" looking after you, in case you still need that fable to behave like decent human beings, or to sleep at night.  There's just us chickens, and there is No Fate, but the one we make.  Sorry. 

"Religion is what keeps the poor from killing the very rich…”

 

 

I suspect you don’t “hate” to tell anyone who’s listening there is no Ultimate authority you may be held accountable to for your conduct.  You choose to deny it and instead rely on what power you do have to sustain your personal temporary existence and perhaps create offspring in the process that may inherit some of your genetic material but who can only be thankful for your efforts as you are for those who did the same for you.

Not that I disagree with your sentiments regarding prudent savings and free association, in fact I even may concede “religion” contributes to maintaining republic ideals in society, it’s just that my choice to believe in an afterlife is what gives meaning to the 70-80 orbits of my own personal being.  

So yeah, I’m guilty of being even more selfish than you.

 

I'm also hoping the rule of law prevails as I'm beneficiary of deeded mineral rights with known reserves.  It's the next best thing to knowing where your boat went down in your tragic accident.

 

 

Wed, 04/09/2014 - 12:15 | 4639550 logicalman
logicalman's picture

Kirk only believes in one less god than you, give him a break!

Wed, 04/09/2014 - 12:22 | 4639577 LooseLee
LooseLee's picture

No, you are more FEARFUL, which can only exist in 'relation' to something. That 'something' is your 'self'....Fear is what keeps humans from 'enlightenment'. The 'me' (e.g. 'self) is what your Jesus said you must 'pass through' before meeting the 'Father'. Unfortunately, Christians have missed this metaphysical perception due to 'FEAR'. Instead of embrasing life and learning about these 'other things', the Christian dwells on 'his/her' own demise---which brings about the 'need' to create a 'savior'. There is no 'Savior', only self-knowledge...

Wed, 04/09/2014 - 11:28 | 4639350 TheFreeLance
TheFreeLance's picture

My own personal window on economic activity is tanking as well. I've been tracking the prices of vacation properties in the Blue Ridge for some time now, both for generational and banking sector data. Since the 2008 crash there have been several can-kicking false dawns which set up Spring 2014 as the run-for-the-exits moment. In other words, miss this selling season and you'll have to pay another year of property taxes in the fall. But you are out of money. Completely. Well, the rout looks to be on.

Wed, 04/09/2014 - 11:36 | 4639385 Bunga Bunga
Wed, 04/09/2014 - 11:38 | 4639401 22winmag
22winmag's picture

This Baltic Dry thingy sounded really scary back in 2012 but to my knowledge, nobody lost any fingers or toes.

Wed, 04/09/2014 - 12:01 | 4639494 forwardho
forwardho's picture

Unless they had any connection to the shipping or processing of raw materials.

If so they have lost their asses.

 

Wed, 04/09/2014 - 11:58 | 4639479 Alananda
Alananda's picture

Someone tell Brandon Smith!!

Wed, 04/09/2014 - 12:13 | 4639542 agstacks
agstacks's picture

Looks like the Baltic Dry Index needs to be re-claibrated to the "modern" economy.  Can't we change a denominator somewhere to fix this?

Wed, 04/09/2014 - 12:21 | 4639570 alangreedspank
alangreedspank's picture

BDI perfectly matches the two bubble eras of early 2000s. By lagging or trending, can't exactly tell from that chart.

http://en.wikipedia.org/wiki/File:BDI.png

Wed, 04/09/2014 - 12:26 | 4639595 Uber Vandal
Uber Vandal's picture

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=A103600001&f=M

This is an even scarier chart.

Must be due to all of the fuel effecient vehicles,  the raging success of cash for clunkers, and green initiatives such as carpooling and bicycle paths; or perhaps people have gone ultra green, and gotten the newest mustang which has 1 horse power and 4 legs.

Can't be that people are working less hours or no longer have a job to drive to.

Wed, 04/09/2014 - 14:33 | 4640088 Boxed Merlot
Boxed Merlot's picture

This is an even scarier chart...

 

 

Am I spending too much time on ZH and archived Firesign Theatre performances?  Why haven't I seen this touted anywhere?  The US is reduced to purchasing one third the amount of gas we've been buying per month on average for over 30 years?  Is it because it's being reported by a US agency?  Even so, surely the US Energy Information Administration hasn't sunk as low in credibility as to be as scorned as our beloved "security" agencies.  That information is nothing short of incredible.

 

jmo.

Wed, 04/09/2014 - 15:18 | 4640318 Uber Vandal
Uber Vandal's picture

ZH covered this a year ago, and it has inversely improved.

http://www.zerohedge.com/news/2013-04-06/these-charts-better-not-represe...

 

Thu, 04/10/2014 - 01:52 | 4642250 Boxed Merlot
Boxed Merlot's picture

inversely improved...  ???

 

From the 2013 article: As the chart below shows, the US economy, whose GDP we are led to believe has never been higher, now has the same total consumption of all petroleum products (red line) as it did... back in 1997!

 

The most current month's consumption reported is at 17,963.3K per day whereas the 1997 monthly average, best I can tell on a back of napkin estimate is 61,000!

This is a crazy important number and point of reference when considering and analizing the US current state of affairs imho.

 

What am I missing?  (and price per gallon is hovering around frn 4. per gallon locally)

Fri, 04/11/2014 - 19:26 | 4649464 Bobportlandor
Bobportlandor's picture

Dear Abby

Going along with your chart US average production is down 9% from 2005 to 2013.

Q. With all the fracking shouldn't US Production be going up?

Looks to me fracking is just helping slow the depletion and not adding.

Conclusion, the lack of consumption is what is contributing to the impression were closer to self sustainability. 

 

http://www.eia.gov/totalenergy/data/monthly/pdf/sec3_3.pdf

 

Here's another thing.

US Nat Gas consumption 2013 is 26.034 Bcf, but we produce 24,280 Bcf. So how is it we have any to spare to send to Europe?

http://www.eia.gov/totalenergy/data/monthly/pdf/sec4_3.pdf

Tue, 04/15/2014 - 09:14 | 4660301 Debt-Penitent
Debt-Penitent's picture

It is the scariest chart I've seen in a while.

 

Come to think of it, when was the last time you waited in line for fuel? 

Even during a holiday?

Wed, 04/09/2014 - 12:35 | 4639638 rosiescenario
rosiescenario's picture

Yellen: the face that un-launched 1,000 ships....

 

....with the BDI you never know if it is too many ships or not enough demand for what they more....or both.

Wed, 04/09/2014 - 12:36 | 4639648 logicalman
logicalman's picture

Keep a beady eye on the BDI.

 

Wed, 04/09/2014 - 12:42 | 4639681 Fuh Querada
Fuh Querada's picture

dry as a bush monkey's bumhole.

Wed, 04/09/2014 - 15:53 | 4640520 kurt
kurt's picture

as bright as a Mandrill's ass.

Wed, 04/09/2014 - 13:31 | 4639900 Iam_Silverman
Iam_Silverman's picture

The spinmeisters always point to newer, more efficient ships coming on line as the real reason behind the lowering BDI.  I wonder how much of that is true?  Is there any way to see what the shippers margins are?  If their margins are flat (in the face of lowering revenue) then they should still break even.  If the "more efficient" line is true, then the shippers can be profitable even if revenue drops.  Economy of scale can work in some instances.

The real tell is to look at the number of idled ships.  I would also love to see an overlay on the BDI chart of actual tonnes shipped versus the cost.

Wed, 04/09/2014 - 14:20 | 4640068 TheInfoman
TheInfoman's picture

Not for nothing, but I am an importer of Asian steel products and my mills can't get space aboard outbound ships in order to ship ontime.  Especially goods from Vietnam.

Wed, 04/09/2014 - 14:37 | 4640094 novictim
novictim's picture

Want to feel alarmed?  Check out the HARPEX index... http://ycharts.com/indicators/harpex

When you review the chart you will see the:

1) post 2008 reexpantion from March to June of 2011

2) then the second collapse in consumer demand hiting bottom in Feb 2012

3) and then the "dead cat bounce" of May 2012

4) followed by a "fake-overy" in May of 2013 and then the steady exexorable slow collapse of what remains of consumer purchasing power.

 

People, the revolution WILL NOT BE TELEVISED.  Reality and TRUTH are in these charts and no amount of bullshit and lies will change the downward pattern of world consumer demand.  

People are broke and you cannot squeeze blood from a turnip.  There is no magic fix to this pattern.  The monopoly game is coming to an end and the "winners" are going to be staring at a VERY angry public.

Wed, 04/09/2014 - 16:05 | 4640571 kurt
kurt's picture

Reverse psychology here folks. Look at the 10 year BDI. See the "Half Dome" crash? This article is about a tiny little gyration, background radiation. The thing is on life support, very little brain activity. It's already clinically dead, comatose, undead, zombie. It's probably a true representation unlike all the other financial propaganda.

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