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The Baltic Dry Index Is Down 60% Year-To-Date; Worst On Record

Tyler Durden's picture




 

The Baltic Dry Index - so admired when it is soaring and supportive of all things great and good about credit creation and rehypothecation - has collapsed over 60% year-to-date. At $867, the index is at one-year lows and hovering near post-crisis lows as the hope-strewn surge of last year now lies torn asunder by the reality of China commodity ponzi probes and a 'real' slowing global economy.

 

The Baltic Dry is hovering near post-crisis lows...

 

With the worst first-half of the year on record...

 

 

 

Of course, we will hear the echo chamber of 'over-supply' of ships rather than any 'under-demand' of actual aggregate product argument but the circularity of this argument is entirely lost on status quo huggers who viewed rising dry bulk commodity prices as indicative of growth (and built more ships) as opposed to the ponzi-financing scheme it really was... mal-investment writ large once again in a manipulated (and mismanaged) world.

 

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Tue, 06/24/2014 - 15:36 | 4890418 madcows
madcows's picture

Bah.  Anectdotal.  BTFMNMW... buy the f-ing market no matter what.

Tue, 06/24/2014 - 15:39 | 4890434 ilion
ilion's picture

This will end well.

Tue, 06/24/2014 - 15:46 | 4890465 Say What Again
Say What Again's picture

Everyone needs to remain calm.  Kevin still has 15 minutes to hammer VXX and juice ES. 

Trust me -- really.

Tue, 06/24/2014 - 15:53 | 4890484 Soul Glow
Soul Glow's picture

Diminishing returns....

Tue, 06/24/2014 - 16:11 | 4890513 ZerOhead
ZerOhead's picture

Nothing a trillion dollar global fleet consolidation IPO by JP Morgan couldn't turn around pretty quickly by creating investor value through scrapping half of the ships.

Tue, 06/24/2014 - 16:01 | 4890520 knukles
knukles's picture

The Wole Global Economy Stinks
Liquidity Trap

 

Hell, anecdotally, a lady relative of mine's boy friend who has a rather responsible job at "the" local hospital just got cut back from full to part time....
Next is bennies will disappear.
Thanks, Great Leaders.
And a special thanks to ObieDon'tCare .... Hospitals left and right are cutting back.
See, socialized medicine for all its worth.  Staffs cut in response to lower payments by insurers, the insurers raise premiums and pay CEO's fuck all monster wages in exchange for campaign contributions for INSURANCE CARE

Screwing the little man every day in every way

Tue, 06/24/2014 - 16:14 | 4890565 assistedliving
assistedliving's picture

so true.  my little company just had a 20% INCREASE last year and i just got a letter from AETNA to get ready for 26% more....and i voted for the f#@ker...

forget semi-automatic; FULL AUTO BABY!

memo to PRISM:  just kidding

Tue, 06/24/2014 - 16:57 | 4890750 max2205
max2205's picture

Giant drones will replace ships....that and teleports

Tue, 06/24/2014 - 17:00 | 4890767 msmith9962
msmith9962's picture

Isn't it because everyone is printing shit with their 3d printers?

Tue, 06/24/2014 - 15:48 | 4890476 TheRideNeverEnds
TheRideNeverEnds's picture

In fairness, it's so low it has no place left to go but up therefore the bottom is in; BTFD.

Tue, 06/24/2014 - 17:25 | 4890860 Theosebes Goodfellow
Theosebes Goodfellow's picture

The whole discussion reminds me of something attributed to Casey Stengel. When asked about the lack of fans in the stands he described them, (the fans), as "staying away in droves". Kind of fits those businesses that would ship dry bulk goods.

"Stayin' away in droves."

Yup, that covers it.

Tue, 06/24/2014 - 15:39 | 4890432 the not so migh...
the not so mighty maximiza's picture

holy shit, think of all that pent up demand, dow 100,000

Tue, 06/24/2014 - 15:42 | 4890439 Dr. Engali
Dr. Engali's picture

Perhaps the index is hovering near post crisis lows because we never made it out of the crisis to begin with. QE to infinity anybody?

Tue, 06/24/2014 - 15:42 | 4890443 ptoemmes
ptoemmes's picture

How much space do re-hypothecated commodities and metals take up?  How much do they weigh?

I suspect we don't need no stinkin' ships.

Tue, 06/24/2014 - 17:41 | 4890897 Oldwood
Oldwood's picture

Exactly! There are no manufacturing profits. The only money is in selling make believe shit back and forth to one another and continually marking it up. I will promise to buy from you at eight if you promise to buy it back at nine, infinitum. For the markets to rise, someone has to buy, right? Who would do that unless they were pretty damn sure there was a buyer.

Numbers designed to deceive.

Tue, 06/24/2014 - 15:41 | 4890446 Grande Tetons
Grande Tetons's picture

Send me my iron ore via fedex. 

Tue, 06/24/2014 - 15:43 | 4890451 Soul Glow
Soul Glow's picture

Not a leading indicator.  Move along.....

- Yellen

Tue, 06/24/2014 - 15:42 | 4890452 potato
potato's picture

this is what economists call "noise."

move along now

Tue, 06/24/2014 - 15:44 | 4890454 Soul Glow
Soul Glow's picture

jinx

And "noise" is the new "transitory", so ZH gets a whole new joke to play with.  Thanks Yellen.  Don't know what I'd fucking do without you.

Tue, 06/24/2014 - 15:43 | 4890456 tmosley
tmosley's picture

Can someone explain to me exactly what this number means?  Can I go rent a cargo ship and host a massive party/cruise around the world for the index price/day?

Because that would be pretty awesome.

Tue, 06/24/2014 - 15:56 | 4890498 NOTaREALmerican
NOTaREALmerican's picture

Re: Can someone explain to me exactly what this number means?

You could rent 2 cargo ships for the price of one.   Don't forget to invite me. 

Tue, 06/24/2014 - 17:44 | 4890900 Oldwood
Oldwood's picture

If they get cheap enough maybe a multifamily unit? Afloat at sea I wonder what taxing entity it would fall under. Somali pirates?

Tue, 06/24/2014 - 15:44 | 4890462 Silverhog
Silverhog's picture

This is like passing Exit 293761530011     

Tue, 06/24/2014 - 16:06 | 4890542 knukles
knukles's picture

Ya know, you miss exit 293761530011 and you wind up in Barstow in mid-August, the outskirts of Hell.

Tue, 06/24/2014 - 15:45 | 4890464 hegemony
hegemony's picture

You gotta love cnbc     

Dow drops triple digits as Iraq fears undo data cheer
Tue, 06/24/2014 - 15:55 | 4890493 Soul Glow
Soul Glow's picture

Too bad the media doesn't use sound logical reasoning.  For the average sheeple anyway.  Poor sheeple.  Poor, poor sheeple.

Tue, 06/24/2014 - 16:19 | 4890580 knukles
knukles's picture

What's to fear about Iraq?
All the media said today that Kerry and Shiek Wango Abdul Whatzhizname agreed that they could get US aid to fight the "rebels" if they made an agreement to form a new Kubmbaya government of Peace and Love before July1 so as to forestall the pending civil war.

Seriously, that's what they said today.
Welcome to the New Caliphate, Disbeliever.

 

Y'all ever read shuch horseshit in your lives as the current media?

Tue, 06/24/2014 - 17:46 | 4890906 Oldwood
Oldwood's picture

But it is specially designed speech to make us feel better. Don't you feel better?

Tue, 06/24/2014 - 15:45 | 4890466 hegemony
hegemony's picture

I forgot to mention that's why oil stocks are the worst acting group

Tue, 06/24/2014 - 15:54 | 4890487 JailBank
JailBank's picture

Was this seasonally adjusted? Has the weather been accounted for?

Tue, 06/24/2014 - 15:54 | 4890489 ebworthen
ebworthen's picture

I have been seeing a lot of 75% off sales lately.

Tue, 06/24/2014 - 15:59 | 4890514 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

I've noticed that choices are down to... and they try to hide that fact by bringing more of the same inventory to the shelves.

Tue, 06/24/2014 - 21:38 | 4891691 kareninca
kareninca's picture

Yes, plenty of sales, except for real food.  I just spent $2.69/pound for organic dried beans; good god.

Tue, 06/24/2014 - 15:54 | 4890491 I Am Not a Copp...
I Am Not a Copper Top's picture

This cannot be happening.  IT'S TUESDAY FOR CHRISTSAKE!

Tue, 06/24/2014 - 15:57 | 4890504 Fix It Again Timmy
Fix It Again Timmy's picture

Yah, too many ships!  I'm building a SuperTanker in my Iowa, USA backyard in my spare time...

Tue, 06/24/2014 - 16:01 | 4890516 NOTaREALmerican
NOTaREALmerican's picture

You should fill it with one pair of every commodity on the planet.    Call it Noah's Baltic Ark.   We'll have Russel Crow play you.   Hey,  have your people call my people, lets do lunch. 

Tue, 06/24/2014 - 16:19 | 4890594 quasimodo
quasimodo's picture

Good gawd don't go saying that, we've had enough rain lately here it might even float down the Missouri to the Mississippi.

Tue, 06/24/2014 - 16:27 | 4890625 Dr. Engali
Dr. Engali's picture

You laugh, but in my youth I had a friend whose dad built an amazing handcrafted boat in his basement only to discover that he had no way of getting it out. His original plan was to widen the doors that led outside, but he didn't calculate for the height and angle to get it out.

Tue, 06/24/2014 - 15:57 | 4890505 Bunga Bunga
Bunga Bunga's picture

Looks like China's commodity warehouses had been "filled up" with empty ships. Now that scam was exposed, shipping rates will be a disaster.

Tue, 06/24/2014 - 15:58 | 4890507 NOTaREALmerican
NOTaREALmerican's picture

The Baltic Dry Index (BDI) is a number (in USD) issued daily by the London-based Baltic Exchange. Not restricted to Baltic Sea countries, the index provides "an assessment of the price of moving the major raw materials by sea. Taking in 23 shipping routes measured on a timecharter basis, the index covers Handysize, Supramax, Panamax, and Capesize dry bulk carriers carrying a range of commodities including coal, iron ore and grain."[1]

No wonder it's going down.   Did they include the new short-cut route over the northpole for iPhones going to europe?   That's where all the ships are. 

Tue, 06/24/2014 - 16:55 | 4890746 Oldrepublic
Oldrepublic's picture

question to  NOTaREALmerican:

so why are the Chinese building a new canal in Nicaragua?

Tue, 06/24/2014 - 17:48 | 4890915 Oldwood
Oldwood's picture

Fishing. The Chinese like fishing.

Tue, 06/24/2014 - 17:59 | 4890953 hidingfromhelis
hidingfromhelis's picture

How many of the new ships are being built with glass bottoms, so the "windows" can be broken easily?  Remember, destruction stimulates the economy!

Wed, 06/25/2014 - 02:52 | 4891245 Bunga Bunga
Bunga Bunga's picture

To ship non-existent commodities. Let's dig out another canal to let newly built and empty ships use it back and forth. Creates growth and jobs, Krugman did approve it.

Tue, 06/24/2014 - 15:58 | 4890508 Rainman
Rainman's picture

China got 1647 shipyards.....projected to shut down 30% of them 

http://www.rina.org.uk/article1335.html

Tue, 06/24/2014 - 17:50 | 4890923 Oldwood
Oldwood's picture

Are these ghost shipyards or real living ones with people in them? Just wondering. Anyone ever think they may have deliberately created redundancy in everything so when the shit storm hits they have backups already in place?

Tue, 06/24/2014 - 16:21 | 4890593 papaswamp
papaswamp's picture

HARPEX is up above 2yr average. So why the disconnect between raw materials and finished product? Someone is buying a lot of something and shipping it somewhere. Might explain the huge difference in Account balance.

Of course in context... Its still brutal ugly.
http://www.harperpetersen.com/harpex/harpexRH.do?timePeriod=Years10&&dat...

Tue, 06/24/2014 - 16:20 | 4890601 Bemused Observer
Bemused Observer's picture

This Brave New Economy doesn't require the actual shipping of bulk commodities. How messy and old-fashioned! Why, you need laborers to do that, and you've got to pay them! Plus, they get all...sweaty and stinky. How uncouth!

Better to leave all those dusty relics right where they are, and create derivatives of them that we can trade neatly and cleanly on those wonderful little smartphones.

*SIGH!*

Tue, 06/24/2014 - 17:07 | 4890792 msmith9962
msmith9962's picture

True.  When I run out of paper I just have a friend fax some to me.

Tue, 06/24/2014 - 17:57 | 4890943 Bemused Observer
Bemused Observer's picture

Yep. That's how it works these days. Right now I'm off to my 3-d printer...gotta get some beer and wings for the big game...

Tue, 06/24/2014 - 16:22 | 4890608 Rockerchic
Rockerchic's picture

Well, I guess that would explain why half the shit I try to order online lately is "out of stock".

Tue, 06/24/2014 - 16:24 | 4890613 davidalan1
davidalan1's picture

"They no NOTHING, NOTHING"- some bald headed guy

Tue, 06/24/2014 - 16:27 | 4890620 GrinandBearit
GrinandBearit's picture

Notice how the market is red on Tuesday's now.  

Wednesday is the new Tuesday. 

Da boyz have everything under control.

Tue, 06/24/2014 - 16:29 | 4890627 Mitch Comestein
Mitch Comestein's picture

tHIS CHART IS BULL SHIT.  tHERE WAS A HUGE CRASH IN 2008. tHAT IS NOT EVEN on the chart.  There YOY change chart shows a gain.  

 

HEY ZH...IS YOUR CHART SEASONALLY ADJUSTED OR ARE YOU MANIPULATING THE DATA?????

Tue, 06/24/2014 - 16:30 | 4890634 Its_the_economy...
Its_the_economy_stupid's picture

Bullish! No incomikng ijunk, no trade deficit, stronger dollar, all the better to buy ijunk with!

Tue, 06/24/2014 - 17:01 | 4890766 Squid Viscous
Squid Viscous's picture

ooooh more scary ZH stuff, I'm going "all in" TZA and VXX tomorrow wish me luck!!

Tue, 06/24/2014 - 18:25 | 4891054 MeelionDollerBogus
MeelionDollerBogus's picture

vxx is only -4x to the market. hvu is -11x as is uvxy. HVU is really cheap share prices compared to both too.

Tue, 06/24/2014 - 17:09 | 4890804 kurt
kurt's picture

I'm still waiting for my Eggwave microwave egg cooker from As Seen On TV.

Tue, 06/24/2014 - 17:30 | 4890873 TWFTG
TWFTG's picture

It is only a little noise !! Recovery is on and hot !!

Yellen.- 

Tue, 06/24/2014 - 18:19 | 4890985 MeelionDollerBogus
MeelionDollerBogus's picture

Wasn't long ago an article made mention of the CLMI...

http://scharts.co/UHrsnW

Wed, 06/25/2014 - 05:43 | 4892353 Otto Zitte
Otto Zitte's picture

So the junk on amazon is down 2% across the bored... meaningless. This is like being a 2 dimensional entity on a balloon, that expands and contracts when the sun hits it or is obscurred. The proportions of the topology remain the same, the rest is PT Boredumb. 

You need to work harder to replace me. I would like you to succeed, so I can retire. Loooosers...

Wed, 06/25/2014 - 06:17 | 4892379 AdvancingTime
AdvancingTime's picture

Much of the economic landscape is beginning to look like something out of  "Alice And The Looking Glass" A bizarre  and unrecognizable land, a land that is distorted and papered over by ream after ream of paper. This paper has been rolling off the printing presses of central banks all across the world in an attempt to mask reality.

Peter Schiff says, printing money is to the economy what taking drugs is to a drug addict. In the short term it makes the economy feel good, but in the long run it is much worse off. What was once the "long run" or "distant future" may be getting much closer. More on this in the article below.

http://brucewilds.blogspot.com/2013/01/what-happens-after-momentum-ends_...

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