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The Baltic Dry Index Collapses To 18-Month Lows; Worst July Since 1986

Tyler Durden's picture




 

The bulls will ignore it, shrugging that it's merely over-supply of ships that the resurgent world economy will quickly soak up as it 'recovers'... However, World GDP growth expectations are collapsing, trade volumes are slowing, and the Baltic Dry Index has continued to slump to its lowest since the start of January 2013 (a holiday period). For some context, this is the lowest July level for the Baltic Dry since 1986... "noise"

 

There's this...

 

 

and then there's this...

 

Which is the worst July level for the global shipping index since 1986...

*  *  *

And if you think the market is just ignoring this... think again... The bonds of CMA CGM - France's largest world wide shipping firm - are tumbling...

*  *  *

Of course - H2 will be great and this is just a 13-month dump of noise...

 

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Tue, 07/22/2014 - 17:53 | 4990285 NOTaREALmerican
NOTaREALmerican's picture

For God sakes, there's a drought on.   How can you ship stuff with weather like this. 

Tue, 07/22/2014 - 17:59 | 4990324 SWRichmond
SWRichmond's picture

Recovery is strong!  Jobs growth!  Woo-Hoo!

Tue, 07/22/2014 - 18:02 | 4990344 Rainman
Rainman's picture

Who the hell cares about charts when Turbo Tuesday gots you back ?

Tue, 07/22/2014 - 18:31 | 4990483 BuddyEffed
BuddyEffed's picture

Remember "A thousand points of light"?

How about a thousand flying dutchman ships?  Don't they park them somewhere over in Indonesia in some kind of floating graveyard?

Tue, 07/22/2014 - 18:47 | 4990539 kaiserhoff
kaiserhoff's picture

The Baltic Dry measures actual goods, being transported, to people who want them..., and can pay for them.

Sooooo Twentieth Century.

Tue, 07/22/2014 - 19:01 | 4990602 Keyser
Keyser's picture

President Obama touts STRONG US ECONOMY - 2 days ago

http://www.breitbart.com/Breitbart-TV/2014/07/19/Obama-Touts-Americas-St...

 

Tue, 07/22/2014 - 20:01 | 4990836 El Oregonian
El Oregonian's picture

Weee! It is official: We now live in "If it is bad news, then it must be good news!". That means officially it must be OPPOSITE DAY!!!

Tue, 07/22/2014 - 22:44 | 4991447 Keyser
Keyser's picture

I posted it as satire, considering that the earth is on fire while Obama is oblivious... 

 

Tue, 07/22/2014 - 22:15 | 4991360 BlindMonkey
BlindMonkey's picture

Cash or Letters of Credit?

 

What the hell am I saying.  NOBODY uses cash anymore.

Tue, 07/22/2014 - 19:43 | 4990769 Panafrican Funk...
Panafrican Funktron Robot's picture

"The BDI contains route assessments based only on time-charter hire rates "USD paid per day per Metric Ton".

Now consider that the BDI is a nominal measure, not a real (inflation adjusted) number.  In real terms, we are way, way below 1986.

Tue, 07/22/2014 - 18:31 | 4990487 espirit
espirit's picture

Didn't everyone get the memo that oceans have dried up due to global warming?

Rail between continents is the future, baby.

Wed, 07/23/2014 - 00:22 | 4991680 mt paul
mt paul's picture

baltic dry

another name for.... 

 

zero hedge yacht club ...

Tue, 07/22/2014 - 17:54 | 4990290 franzpick
franzpick's picture

The Baltic Dry-Dock Index.

Tue, 07/22/2014 - 18:18 | 4990426 Stuck on Zero
Stuck on Zero's picture

No dry dock.  Can't afford it.  Mysterious sinkings with insurance payouts, yes.

 

Tue, 07/22/2014 - 17:54 | 4990294 ekm1
ekm1's picture

As I said early 2013, Quantitative Easing was designed to harm USA and World Economy in order to make large banks live another day.

 

We are here now and only solution left is: VIOLENCE

Tue, 07/22/2014 - 17:58 | 4990317 NOTaREALmerican
NOTaREALmerican's picture

Don't forget, the first step is ALWAYS bullshitting the dumbasses.    They need somebody to attack.

Tue, 07/22/2014 - 18:02 | 4990343 ekm1
ekm1's picture

No need for that.

We'll see lobbies assassinating each other members.

 

I'm talking about bloodshed violence between competing lobbies now.

Tue, 07/22/2014 - 18:14 | 4990391 TeethVillage88s
TeethVillage88s's picture

Yeah, the 2008 Global Financial Crisis just won't go away.

Just Look at this

1) Workforce Participation crashing
2) Consumption Crashing
3) Housing Still in Slumps except for Foreigners or Others working
4) Debt Rates way high, USA not quiet to the UK Level yet, India Debt, China Debt, China needs for expanding Credit is unbelievable, US needs for expanding Credit is out of sight
5) US Federal Budget is like Fascist Italy or Fascist Spain
6) US Shadow banking is apparently the Same as in Europe & London, OUT OF CONTROL
7) Modern Manufacturing seems to mostly lay in China as most UK, Spain, French, USA factories have not been upgraded or retooled for 30 years
8) Immigrants pour into USA & Europe, but don't have Skills, creating kinetic energy for Civil Unrest
9) All Politicians suck and never reveal the full picture of corruption, bribery, and Economic Malaise
10) No one person Really sees the whole Global Economic picture when taxes, subsidies, social programs, manufacturing, debt, credit, bank linkages, insurance swaps, and derivatives are included
11) How can the world Trust US Financial Markets after it caused the Global Crash
12) How can the world Trust the USA when it bails out Banks, allows them Bonuses, Gives them Free Money in ZIRP, QE & TARP... with no punishment, no loss of banking advantages, no investigations, no CEO Firings, No Fraud Found, No US Public Executive Responsibility, and No "NONE" Clean up of Financial System Regulations & Accounting.

13) US Reputation is Ruined. But we pretend we are superior. Fascist USA. But mostly Fascist Executives and Leadership and Institutions.

14) We ignore the shortages in Pensions, Social Security, MEDICAID, and University & Municipal Trust Funds... but we want new wars, more immigration (spending bill for amnesty), and we want to give more money to TBTF Banks even if we have to have Bail-Ins.

http://ellenbrown.com/2014/07/16/did-the-other-shoe-just-drop-black-rock...

The people are great though.

Tue, 07/22/2014 - 18:18 | 4990427 dracos_ghost
dracos_ghost's picture

Shut up dude. Kimye is pregnant again. That's all that matters.

Tue, 07/22/2014 - 18:33 | 4990491 espirit
espirit's picture

Junk in the trunk...

Tue, 07/22/2014 - 18:19 | 4990435 doctor10
doctor10's picture

all are "engineered" distractions -assembled by the .1% who are desperate to find annonymity among them in the coming mess.

Tue, 07/22/2014 - 18:24 | 4990454 Escrava Isaura
Escrava Isaura's picture

TeethVillage88s,

Let's make it easy:

You print, print, print, then go to war - Marc Faber

Wed, 07/23/2014 - 02:48 | 4991816 Colonel Klink
Colonel Klink's picture

Shhhhhhhhhh, you'll spook the sheep!

Tue, 07/22/2014 - 18:21 | 4990442 Escrava Isaura
Escrava Isaura's picture

ekm1 "As I said early 2013"

Wow! We're so impressed that you realized something few months back

 

Tue, 07/22/2014 - 18:28 | 4990474 caShOnlY
caShOnlY's picture

QE, by design, protects the wealthy at everyone else's expense.   QE saves the banks and the markets while creating higher costs for everyone.   Higher costs = lower purchasing power, thus BDI index dropping out like rock.  

Tue, 07/22/2014 - 18:48 | 4990536 ekm1
ekm1's picture

QE by design protects only and only and only INSOLVENT bank lobby oligarchs, and harms oil and industrial lobby oligarchs, as well as, now, Military complex.

 

At this point this is no longer rich vs poor.

The game is a lot simpler:

 

Insolvent Rich vs Solvent Rich.

 

Hence "suicides".

Assassinations to follow soon, if QE continues. We'll see, most probably, bankers and executives shot down in plain light.

Tue, 07/22/2014 - 20:15 | 4990906 caShOnlY
caShOnlY's picture

makes absolutely no sense.  

Where do you think the "SOLVENT RICH" keep their money? in their sock drawer?  THEY ARE ALL VESTED IN MARKET and STOCKS of their COMPANIES IN THE MARET!!!!  AND THE MARKET CANNOT SURVIVE WITHOUT BANKS and QE!!!   The INSOLVENT RICH aren't INSOLVENT at all, in fact they are richer today than they have ever been!! The banks (corp) may be insolvent but they know the FED/GOV will NOT let them go under and risk a total collapse. 

Tue, 07/22/2014 - 20:49 | 4991054 icanhasbailout
icanhasbailout's picture

This raises an important issue - what kind of trade is most profitable when a banker dies?

Tue, 07/22/2014 - 21:56 | 4991293 doctor10
doctor10's picture

The Organ Trade?

Wed, 07/23/2014 - 02:50 | 4991819 Colonel Klink
Colonel Klink's picture

When we trade them to Satan!

Tue, 07/22/2014 - 23:04 | 4991508 Escrava Isaura
Escrava Isaura's picture

ekm1,

You said: "Insolvent Rich". That's a correct point, in my view.

Then you said: "QE by design protects only and only and only INSOLVENT bank lobby oligarchs, and harms oil and industrial lobby oligarchs, as well as, now, Military complex.

That's not correct. Here's why:

How would lower oil prices help oil oligarchs?

How would fewer taxes help the Military complex?

Please NOTE that I am not in favor or against QE. The right solution should have let the banks failed in the 80's and 90's. And the very least, nationalization in 2007/08.

Tue, 07/22/2014 - 17:57 | 4990314 DIgnified
DIgnified's picture

<Recovery!

<Planned deindustrilalization 

Tue, 07/22/2014 - 18:35 | 4990499 espirit
espirit's picture

Moar like de-globalization.

Tue, 07/22/2014 - 19:03 | 4990610 Keyser
Keyser's picture

Moar like de-humanization...

 

Tue, 07/22/2014 - 17:58 | 4990322 nosoeawe
nosoeawe's picture

Oh who gives a fuck.

According the Feds, Americans dont need food or energy (or their bill of rights and/or that barbaric relic, no not gold, the constitution).

 

Signed,

Yellen is still a cunt

Tue, 07/22/2014 - 17:59 | 4990327 Hindenburg...Oh Man
Hindenburg...Oh Man's picture

What does this equal in Gartmans?

Tue, 07/22/2014 - 18:07 | 4990371 The Most Intere...
The Most Interesting Frog in the World's picture

I will give you a thousand Gartmans for a hamburger. Deal?

Tue, 07/22/2014 - 19:04 | 4990613 Keyser
Keyser's picture

Is that in yen or euro terms? 

 

Tue, 07/22/2014 - 18:01 | 4990337 Bear
Bear's picture

Who in the world would want to ship anything dry to the Baltic? Maybe it should be zero

Tue, 07/22/2014 - 20:01 | 4990849 stormsailor
stormsailor's picture

yeah, maybe they are shipping everything with vermouth

Tue, 07/22/2014 - 21:43 | 4991258 Bear
Bear's picture

I'll drink to that

Tue, 07/22/2014 - 18:03 | 4990348 walküre
walküre's picture

Holy Fuck!

Tue, 07/22/2014 - 20:19 | 4990917 Vendetta
Vendetta's picture

no its ho li fuk, BDI, wei tu lo

Tue, 07/22/2014 - 20:56 | 4991074 Burticus
Burticus's picture

Sum Ting Wong

Tue, 07/22/2014 - 18:03 | 4990351 25or6to4
25or6to4's picture

Come on guys! Everybody knows the Baltic is still frozen over this time of year. Why, just wait until September............

Tue, 07/22/2014 - 18:06 | 4990365 The Most Intere...
The Most Interesting Frog in the World's picture

BDI chart reminds me of currency velocity. Ships built, money printed, but not being used...yet! The promised land is just around the corner. The next corner. Not that corner, the next corner. Here it comes around THIS corner. No not that corner....

Tue, 07/22/2014 - 20:09 | 4990878 Iam_Silverman
Iam_Silverman's picture

"Ships built, money printed, but not being used...yet!"

This explanation could be the most correct one yet.  Based on the prediction of runaway inflation, those idle vessels will be needed to transport shiploads of money to our trading partners for those items we desire.

Tue, 07/22/2014 - 18:11 | 4990393 Spungo
Spungo's picture

Lower shipping costs = bullish

Tue, 07/22/2014 - 18:13 | 4990401 ebworthen
ebworthen's picture

C'mon.  Just a Summer lull.  Transitory.  1986 was a good year.

Slackened shipping over fear of hurricanes, and sharknadoes.

Tue, 07/22/2014 - 18:23 | 4990448 virgilcaine
virgilcaine's picture

Put this 0ne out to pasture with the vix.

Tue, 07/22/2014 - 18:30 | 4990479 monopoly
monopoly's picture

But none of it makes any difference. Until it does.

Tue, 07/22/2014 - 18:29 | 4990480 kurzdump
kurzdump's picture

No vessels needed anymore, it's all about glass fibres now.

Eat more iPads!

Tue, 07/22/2014 - 18:46 | 4990537 mastersnark
mastersnark's picture

Nowhere to go but up...right?

Tue, 07/22/2014 - 18:48 | 4990542 Let them eat iPads
Let them eat iPads's picture

I'm sure this is another foolproof Zero Hedge indicator that the sky is falling.

Tue, 07/22/2014 - 18:59 | 4990595 SickDollar
SickDollar's picture

Blame the heat!!!

Tue, 07/22/2014 - 18:59 | 4990596 SickDollar
SickDollar's picture

Blame the heat!!!

Tue, 07/22/2014 - 19:12 | 4990650 swass
swass's picture

None of this matters when we have the Fed and a lot of ink jet cartridges.

Tue, 07/22/2014 - 19:23 | 4990687 firstdivision
firstdivision's picture

Still above par, so not a collapse. Wake me when they're below 90.

Tue, 07/22/2014 - 19:27 | 4990700 Fuku Ben
Fuku Ben's picture

No problem. War will fix it.

Tue, 07/22/2014 - 19:46 | 4990787 logicalman
logicalman's picture

Just sink a shit load of ships.

BDI should go up pretty quickly at that point.

 

Tue, 07/22/2014 - 19:47 | 4990796 orangegeek
orangegeek's picture

yellen???  krugman??

 

....nevermind

Tue, 07/22/2014 - 20:07 | 4990867 Iam_Silverman
Iam_Silverman's picture

Surely this is merely just a reflection of Amazon.com's decision to use a fleet of drones for delivery of everything, no?

Tue, 07/22/2014 - 20:10 | 4990885 NEOSERF
NEOSERF's picture

You think this MJ legalization is some sort of easing for taxes?  No, it is a very conscious retreat by the government looking to quell dissent amongst 18-30 yr old males.  Sitting on your couch, obese, xbox distracted and high as a kite makes for few riots.

Tue, 07/22/2014 - 20:14 | 4990898 GotGalt
GotGalt's picture

Unless I'm reading that bond chart wrong, CMA CGM are trading at 104 which is above par, right?  Not exactly the definition of tumbling or impending doom.  Having said that, I generally avoid investing in shipping as it is a money sink hole most times.

Tue, 07/22/2014 - 20:21 | 4990933 imbrbing
imbrbing's picture

I want to know what happened in 1987 :)

Oh I remember    http://en.wikipedia.org/wiki/Black_Monday_%281987%29

Tue, 07/22/2014 - 20:24 | 4990942 rosiescenario
rosiescenario's picture

Of all the indexes which could use some adjustment, the BDI could.

 

It needs to be adjusted for available cargo carrying capacity, otherwise it cannot really be used to measure trade volume. For example, one could have a large increase in trade taking place, but if there is a glut of ships, the BDI would still be down.

Tue, 07/22/2014 - 20:31 | 4990972 o2sd
o2sd's picture

Actually, ship builders do overbuild during trade booms, and the early noughties was the mother of all trade booms. I don't doubt that dry volume is also decreasing, but a ship takes 2-5 years to build, so there were still ships coming online last year that were commenced in 2008.

Iron Ore shipped from Port Hedland hit a record in volume this year, so I am inclined to say that the continuing decline in BDI is probably more due to an oversupply of ships than a material drop in dry volume shipped. 

Tue, 07/22/2014 - 20:37 | 4990996 HeavydutyMexica...
HeavydutyMexicanOfTheNorthernKingdom's picture

Alabama Mexicans Bitchez!

Tue, 07/22/2014 - 20:49 | 4991055 are we there yet
are we there yet's picture

Washington BS, egos, and lies could fill up a few container ships.

Tue, 07/22/2014 - 21:04 | 4991102 nathan1234
nathan1234's picture

Dont worry BDI

Comex ( backed by the Fed * SEC) is coming to fix things up.

They soon start trading for you and in no time there will be a boom in your index.

And as for growth- even better as Krugman will be your consultant

 

 

Tue, 07/22/2014 - 21:06 | 4991109 Aussiekiwi
Aussiekiwi's picture

Hockey stick recovery.....just around the corner.

Tue, 07/22/2014 - 21:40 | 4991238 Golden Showers
Golden Showers's picture

Um, you are retardz. This is the Baltic Dry Index.

This isn't fucking Facefuck or else it would be called Facefuck.

You like your facefucked. Good for you. Fuck you. Fuck your face. Your are stupid assholes.

I hate you. Go and pretend.

You are telletubbies.

Go to hell.

Wed, 07/23/2014 - 20:02 | 4995774 ForTheWorld
ForTheWorld's picture

I love you. Go and be real.

Tue, 07/22/2014 - 21:58 | 4991302 Magooo
Magooo's picture

THE PERFECT STORM (see p. 59 onwards)

The economy is a surplus energy equation, not a monetary one, and growth in output (and in the global population) since the Industrial Revolution has resulted from the harnessing of ever-greater quantities of energy. But the critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel. http://ftalphaville.ft.com/files/2013/01/Perfect-Storm-LR.pdf

 

Nothing else matters

Wed, 07/23/2014 - 03:39 | 4991868 smacker
smacker's picture

Indeed. Tullett Prebon are good at this analysis.

Something that is not widely discussed "yet" is that Western systems of government - all that accountable democracy stuff and rising State spending on welfare to buy votes etc - have been constructed and operate on the basis of rising economic growth, more jobs, higher wages and more wealth.

All predicated on the back of a plentiful supply of cheap energy.

The political elites have milked this without a thought for the future.

As we witness the end of cheap energy with no replacement in sight, these systems of democracy are breaking down because it is a system that can only exist and operate in the "good times".

They are now being replaced by "law of the jungle" and "grab what you can" mindsets. Government itself is becoming ever more criminal and operating outside of the Rule of Law,  banksters are carrying out massive frauds and the big corporates are ripping people off at unprecedented levels. Collectively, they are all becoming fascist.

It looks like the tipping point is getting close which will lead to [ insert here what you think will happen ].

Tue, 07/22/2014 - 22:13 | 4991352 Raging Debate
Raging Debate's picture

No you're mistaken. This is "less noisy". Get it right!

Wed, 07/23/2014 - 07:37 | 4992076 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_...

 

 

Wed, 07/23/2014 - 08:29 | 4992215 Goldbugger
Goldbugger's picture

7 years of LIES and manipulated numbers  but the Baltic tells whats really going on.

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