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.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
madcows's picture

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

Say What Again's picture

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

Trust me -- really.

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.

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

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

max2205's picture

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

msmith9962's picture

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

TheRideNeverEnds's picture

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

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.

the not so mighty maximiza's picture

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

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?

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.

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.

Grande Tetons's picture

Send me my iron ore via fedex. 

Soul Glow's picture

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

- Yellen

potato's picture

this is what economists call "noise."

move along now

Soul Glow's picture


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.

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.

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. 

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?

Silverhog's picture

This is like passing Exit 293761530011     

knukles's picture

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

hegemony's picture

You gotta love cnbc     

Dow drops triple digits as Iraq fears undo data cheer
Soul Glow's picture

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

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?

Oldwood's picture

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

hegemony's picture

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

JailBank's picture

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

ebworthen's picture

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

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.

kareninca's picture

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

I Am Not a Copper Top's picture

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

Fix It Again Timmy's picture

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

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. 

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.

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.

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.

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. 

Oldrepublic's picture

question to  NOTaREALmerican:

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

Oldwood's picture

Fishing. The Chinese like fishing.

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!

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.

Rainman's picture

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

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?

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.

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.


msmith9962's picture

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

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...