Here's Why The Baltic Dry Index Is Collapsing (In 1 Image)

Tyler Durden's picture




 

If ever there was a better indication of the malinvestment boom created by an interfering Fed, this is it. As demand for shipping collapses on real slowing in the global economy - markets have "told" shipbuilders to "build it and they will come"... here is a ship-shipping ship, shipping shipping ships.

 

h/t @NMMGreenwich

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Wed, 05/14/2014 - 18:23 | 4760811 Dorelei
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Iceberg ahead !!!!

Wed, 05/14/2014 - 18:26 | 4760819 unrulian
unrulian's picture

you've got to be shipping me

Wed, 05/14/2014 - 18:28 | 4760826 NotApplicable
NotApplicable's picture

I can't imagine the size of the cranes required to do that.

Wed, 05/14/2014 - 18:33 | 4760844 zaphod
zaphod's picture

As messed up as things are today, mankind's industrial capability is amazing in the scale we can build today, but most people don't ever see these feats of engineering. 

Wed, 05/14/2014 - 18:37 | 4760861 franzpick
franzpick's picture

That - is The Ship of Fools.

Wed, 05/14/2014 - 18:40 | 4760869 Looney
Looney's picture

Holy Ship! ;-)

Looney

Wed, 05/14/2014 - 19:34 | 4761052 knukles
knukles's picture

+++++++ for the Firesign Theater, Tyler, if my uh memory serves uh...
me

uh  
what?

 

 

heydidju order the pizza?

Wed, 05/14/2014 - 19:55 | 4761108 StychoKiller
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"Yeah, I'd like a large pizza and no anchovies..."

Wed, 05/14/2014 - 20:34 | 4761191 old naughty
old naughty's picture

I don't get it...

Hadn't they invented BDI after they stacked them steelcases atop one another, high?

You mean it was all for "nothing"...

Oh, what's with the "no" anchovies?

Wed, 05/14/2014 - 21:03 | 4761269 ss123
ss123's picture

I dunno but after seeing that image, I immediately SHIPPED MY PANTS!

Wed, 05/14/2014 - 21:27 | 4761322 Pool Shark
Pool Shark's picture

 

 

Skipper: "That has got to be the second biggest stack of ships I've ever seen."

 

 

Wed, 05/14/2014 - 21:59 | 4761396 franzpick
franzpick's picture

You can't make this ship up?

Wed, 05/14/2014 - 22:30 | 4761454 Mistress Raindrop
Mistress Raindrop's picture

Yet the shopping malls are still filled to the rafters with people.  Go figure.

Wed, 05/14/2014 - 23:17 | 4761530 naughtius maximus
naughtius maximus's picture

Not in Marion Ohio at least, maybe Dayton...

Wed, 05/14/2014 - 23:30 | 4761550 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

Oh, I get it now! This is that alien thing that floated to the surface at the end of The Abyss (Special Edition).

Thu, 05/15/2014 - 06:57 | 4761863 tonyw
tonyw's picture

I hear it is also capable of carrying one average-sized American

 

Thu, 05/15/2014 - 08:07 | 4761968 old naughty
old naughty's picture

b,b,but them tri-angular, not rect-angular, no?

Wed, 05/14/2014 - 20:18 | 4761148 Stuck on Zero
Stuck on Zero's picture

Am I wrong or is that a picture of the new Carnival Cruise ship?  Guaranteed lifeboat space for everyone.

 

Thu, 05/15/2014 - 00:35 | 4761651 zerozulu
zerozulu's picture

Don't ship me bro......

Thu, 05/15/2014 - 02:49 | 4761732 Doña K
Doña K's picture

It looks like they are headed for the scrap yards. Tax deductible including loss of potential income. Broken window falacy on steroids

Thu, 05/15/2014 - 00:12 | 4761619 PlausibleDenial
PlausibleDenial's picture

Nick Danger says high.... he is still in Nairobi:)

Wed, 05/14/2014 - 19:47 | 4761087 aVileRat
aVileRat's picture

You know it's getting stupid when you can buy a tramp on Ali Baba for 50% off plus insurance.

Personally waiting for another 1985 style blowout where ships are going on sale for 40% of scrap value. Old man Onassis/Morgan Stanley made a killing back then turning hulks into bunkers and floating fridges.

Wed, 05/14/2014 - 19:07 | 4760975 bjfish
bjfish's picture

A Tower of Babel 

Wed, 05/14/2014 - 19:08 | 4760979 BrosephStiglitz
BrosephStiglitz's picture

Inception Ship(tm)

Wed, 05/14/2014 - 19:15 | 4761008 Diablo
Diablo's picture

Too bad that pic is OVER TWO YEARS OLD.

http://www.dailymail.co.uk/sciencetech/article-2158305/Thats-load-ships-...

 

crack reporting as always tyler!!!!!!!!!

ROFLMAO zerohedge has become a joke.

 

 

Wed, 05/14/2014 - 19:30 | 4761039 MrPalladium
MrPalladium's picture

The fact that the picture is two years old does nothing to alter the fact that the Baltic Dry is collapsing. The picture is a warning that the collapse is not necessarily due to falling trade volumes, but also because of oversupply of ships - an indicator of irrational exhuberance in recent years and a serious over estimation of demand for goods. Overproduction of ships would not occur unless commodity consumers and goods producers were not also wildly optimistic and built what is now excess capacity. The stacked water craft in the picture (which actually look like large sea faring barges) is merely a convenient graphic illustration of a much larger problem.

Wed, 05/14/2014 - 19:42 | 4761074 The Blank Stare
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Bullish Moet & Chandon, someday, in a galaxy far far away

Wed, 05/14/2014 - 21:32 | 4761334 James_Cole
James_Cole's picture

The picture is a warning that the collapse is not necessarily due to falling trade volumes, but also because of oversupply of ships - an indicator of irrational exhuberance in recent years and a serious over estimation of demand for goods.

Irrational markets? Whaaaaaatttt?? 

In other news, some serious ship porn:

http://i.dailymail.co.uk/i/pix/2012/06/13/article-2158305-13936DB6000005...

Wed, 05/14/2014 - 23:36 | 4761561 Creepy Lurker
Creepy Lurker's picture

Thats truly amazing.

Wed, 05/14/2014 - 21:45 | 4761366 Son of Loki
Son of Loki's picture

Mr Palladium has a point. The oversupply of almost everything is astronomical. For example, walk into almost any retailer and the isles are packed with clothes stacked up to the ceiling all discounted 60% ... no ... 70% ... no ... 80%..NO!...90% off!!! and yet few peeples are buying.

YET, thousands of ships loaded with a flood of clothes wait offshore from China ... Vietnam ... Bangladesh ... Cambodia, Honduras and on and on ready to release more Flood of acrylic, rayon...you name it on top of the mountains of textiles we already cannot sell.

Massive backlog portends a scary ending as the global economy sinks deeper into recession some say.

Wed, 05/14/2014 - 22:07 | 4761408 franzpick
franzpick's picture

'the isles are packed with clothes'

A few hours after the street rioting and looting begins, that inventory problem will be eliminated. 

Wed, 05/14/2014 - 22:12 | 4761420 QQQBall
QQQBall's picture

 Iagree with oversupply ovreall, but in stores I am seeing "faced" shelves 1 item deep. Any supply chain disruption and store inventory could become pretty thin.

Wed, 05/14/2014 - 19:34 | 4761056 NotApplicable
NotApplicable's picture

Guess what? It's still perfectly applicable today, as those ships are the very definition of the higher order capital goods where malinvestment occurred in advance of the collapse of the consumer goods industries that were originally supplying an unsustainable demand driven by a credit-fueled crack-up boom.

 

Wed, 05/14/2014 - 21:29 | 4761330 disabledvet
disabledvet's picture

You've stranded all your capital to pay for a trillion dollar ten man Army.

Hmmm.
Ummm..."we'll just print out way out of this?"

Can you even get a handle in Vegas these days?

Sure "they bet on everything there"...ten dollar slots are the way to go?

Wed, 05/14/2014 - 19:38 | 4761065 ebworthen
ebworthen's picture

2012 - so what - the FED gravy train to perdition began in 2008.

Besides, they'll make great troop and armament carriers for China when the time comes.

Wed, 05/14/2014 - 20:41 | 4761208 Zirpedge
Zirpedge's picture

The picture is there for dramatic effect. The OP is not saying the baltic dry is collapsing because of this picture, you had to reach for it.

Aside, I was on a ski lift with some shipping folks earlier this year. About six of those "shipping ships" go missing every year. It's thought that a rogue wave is to blame, but nobody misses the crew and the whole thing is just a write off. When your shipping a sweater made by Bangladeshi slave children for $.12 and the shipping costs are $.02 and you can sell it to some rich westerner for $25.00 on sale, who cares?

The decadent west needs to be brought down to parity with the rest of the world before we can have a world community and government to serve us all as equals.

Wed, 05/14/2014 - 21:18 | 4761297 Quantum Nucleonics
Quantum Nucleonics's picture

So the key to nirvana is to have everyone live in abject poverty?  Gee, that's uplifting.

Wed, 05/14/2014 - 21:59 | 4761398 Quentin Daniels
Quentin Daniels's picture

Abject poverty is going too far.  I think the poorest in the world and the richest can meet somewhere in the middle, perhaps a bit closer to the bottom than the top.  It certainly doesn't change the fact that the west achieved it's wealth mostly by borrowng from future generations.  Stealing, actually, since there really wasn't any intention to repay.

Wed, 05/14/2014 - 22:49 | 4761497 Zirpedge
Zirpedge's picture

@Quentin Da

Yes, we must enforce equality and make everyone meet somewhere in the just south of middle. First you play opposing forces against eachother, then you come in with the solutions. The force is strong in you.

Thu, 05/15/2014 - 02:04 | 4761709 Debugas
Debugas's picture

what is the point for the rich to uplift the poor ?

There is absolutely no point in doing it

The official policy of the rich as stated by the queen is to reduce world population down to 1 bln or even less

Thu, 05/15/2014 - 02:56 | 4761737 Quentin Daniels
Quentin Daniels's picture

I'm not talking about the 'rich uplifting the poor', nor any form of imposed wealth redistribution.  I certainly don't think that people who have earned their wealth should have it confiscated to give to those who haven't.  IMHO, charity, while socially admirable, should always be voluntary.

I'm currently travelling through Australia, and here more than most places I've been, people draw a pretty clear distinction between the wealthy who earned their wealth, generally held in high public esteem, and those who didn't, who aren't.

In spite of generalisations and jokes to the contrary (and I'm as guilty of this as any), the reality is that people aren't that stupid.  They can pretty readily tell whether someones wealth is earned or not.  Much of the wealth that resides at the very upper end of the scale was not earned honestly.  So much of it has been accumulated through theft, both overt and covert, in some cases over the course of centuries.  The wealth redistribution that I anticipate won't be a government program.  It will be those who have been stolen from forcibly reclaiming that which was stolen.

There are limits to how unbalanced a system can become before it collapses in order to return to a more stable state.  I have a feeling that Her Magesty's Wealthy Looters Club which has only existed for a few hundred years (not long in the scheme of things) is going to find out that their activities are driving society to become too unstable, and it will all fall apart too soon to allow them to carry the plan through to completion.

This thought gives me hope.

 

Wed, 05/14/2014 - 22:24 | 4761442 nmewn
nmewn's picture

Apparently the key to "personal nirvana" is hanging out on the ski slopes with shipping magnates, discussing the decadent west...or sumpin ;-)

Wed, 05/14/2014 - 22:42 | 4761481 Zirpedge
Zirpedge's picture

@Quantum Neucleonics *sheesh

Nirvana? Who said you earned it?

Wed, 05/14/2014 - 21:44 | 4761362 Mike in GA
Mike in GA's picture

"...The decadent west needs to be brought down to parity with the rest of the world..."

What the hell were you doing on a ski lift, practicing looking down on people you propose to join? 

Your man Obama is bringing us down as fast as he can and if you really think that any government will ever "...serve us as equals..." you are beyond hopeless.

Sheesh!

Wed, 05/14/2014 - 22:33 | 4761453 BrosephStiglitz
BrosephStiglitz's picture

No no.. you misinterpret what he is saying:

By "decadent West" he means the Western peasantry and their decadent spending. How DARE they have disposable income. Buying new clothes?  Only your betters can, and should be able to afford new clothes.  Wear your rags serf.

And obviously this was a a ski-lift for the aristocracy to nonchalantly defecate onto the serfs below, while swilling champagne and eating beluga caviar.  It always runs downhill.

Wed, 05/14/2014 - 22:47 | 4761491 Zirpedge
Zirpedge's picture

@brosephstiglitz

In the summer we prefer, " A rising tide lifts all boats."

The winter it's "Shit runs downhill."

Guess who controls the weather?

Thu, 05/15/2014 - 00:28 | 4761639 mt paul
mt paul's picture

zirpedge

 

guess who controls 

the shit...

Wed, 05/14/2014 - 22:44 | 4761485 Zirpedge
Zirpedge's picture

@Mike in GA

I guess your more equal?

Thu, 05/15/2014 - 06:17 | 4761832 omniversling
omniversling's picture

< Stacking

< Bulk boating accidents

Wed, 05/14/2014 - 20:09 | 4761131 Kirk2NCC1701
Kirk2NCC1701's picture

Michael rowed his boat ashore...

Damn, that's some fancy rowing, Micheal!  Oar is it?

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