Baltic Dry Plunges Back Below $1000 - Lowest December Since 2008

Tyler Durden's picture

Just a few short months ago, investors were "buy buy buy"-ing the fact that The Baltic Dry Index had resurged off multi-year lows 'proving' China's renaissance and that world economic growth will re-approach Nirvana. Simply put, with collapsing commodity prices (iron ore for instance) and massive fleets of credit-driven mal-investment-based vessels, it should surprise no one that the shipping index just plunged back below 1000, now at its lowest for this time of year since 2008. Furthermore, the seasonal bounce always seen in Q3 was among the weakest ever. But apart from that, buy stocks...

 

Nothing like the normal seasonal bounce in Baltic Dry this year...

 

leaving it at the lowest for December since 2008...

*  *  *

Quite a recovery...

Charts: Bloomberg

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rocker's picture

Looks like a Head and Shoulders.  Oh Boy, this should be good

H H Henry P P P Paulson's picture

Not even Head and Shoulders will cure this dandruff.  DRYS down -17%

NoDebt's picture

I was told 5 years ago its because they had simply over-invested in the number of transport ships.  Amazing they haven't fixed that in the last 5 years.  Almost makes you wonder if that wasn't the real problem.

 

Kprime's picture

they are working on it.  rumor has it the cut off the "bulbular bow things?".  A little more trimming and they will have everything back in balance.

cowdiddly's picture

looks like a heart monitor right before the patient has a cardiac arrest and you hear beeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeep

Dead.

El Oregonian's picture

Is this is a "Recovery" like when you have the recovery of the dead during and after a disaster event?

... That kind of recovery?

Uber Vandal's picture

For some reason, when I read recovery of the dead, I immediately thought of zombies.

Then again, this "economy" is a zombie apocalypse of sorts.

Most Retail. Most commercial real estate. Most..... EVERYTHING!!

 

 

DoChenRollingBearing's picture

As far as we can tell in Peru, both imports (their economy is slowing) and exports (Chinese buying less Peruvian exports like copper) are both down.

We seem to seeing that in "less than containerload" and containerload quantities.  Rates for small shippers are not down yet.

DoChenRollingBearing's picture

 

 

Here's an easy way to see current Baltic Dry Index:

http://stockcharts.com/h-sc/ui?s=%24bdi  (ticker symbol is $bdi at stockcharts)

highly debtful's picture

DCRB, are fluctuations in your line of business representative for the larger picture, i.e. if your bearing business slows down significantly, is that a reliable prognosis of economic turmoil? I suspect yes, because everybody needs bearings, but I'd like to hear it from the specialist. 

In a former life, I have worked quite a long time for a major temp force company (global player) and we felt trouble or improvement long before it clearly manifested itself in the system. Companies tend to fire their temps first when they feel bad times are coming and start hiring temps first (before hiring permanent collaborators) when things are picking up again.

The reason I want to know, is that this isn't the first time the BDI "imploded" in these past few years, so I wonder how reliable the index really is. 

seek's picture

Just more evidence the depression we never left is deepening further, along with the negative retail numbers.

Of course in fantasyland markets, everything is fine.

Wish I knew when the collapse will finally come. I definitely think the timeframe is shrinking.

rocker's picture

Amen, they like to call it the great recession, like it's over. LOL on that thought.

spinone's picture

I like to call it the Long Depression

Philo Beddoe's picture

I am in sales. I am going to keep selling Air Conditioners and Sun Tan Lotion to the Eskimoes until they wise up.  No sarc. 

cowdiddly's picture

Me not Eskimo, Me Indian, Me trade you all Manhattan island for pretty beads. No Indian giving though, you  keep-um.

Philo Beddoe's picture

Give me the girls in your avatar and you can have the entire east coast. 

cowdiddly's picture

Humpf. paleface womans not for trade. Have good teeth, chew many, many buffalo robe. good many beaver too.

scrappy's picture

A buddy of mine is a tugboat captain.

He pushes and pulls mostly oil barges, sometimes coal.

He told me the big guys like Meark cut off those bulbular bow things that save fuel at a certain speed. They see into the future better than most, steaming slower to save fuel, though maybe they will regret it temporarily with this massive oil price drop.

https://en.wikipedia.org/wiki/Bulbous_bow

Bullish!

Philo Beddoe's picture

Hey, what the fuck ever happened to Ebola? That fucking bit was more annoying than the Tanya Harding charade.  I probably stand a better chance being clubbed to death by a fat assed white trash figure skater than I do by dying of Ebola. 

Theta_Burn's picture

 

 

17,800 cases
6,331 deaths

 

http://fluboard.rhizalabs.com/forum/viewtopic.php?f=5&t=13067

 

 Creepy that they estimated 20,000 cases by the end of Dec. on deck to be exactly that number... whats even more creepy is that its not even news worthy anymore..

 

NoDebt's picture

I believe the quoted number floating around ZH was 1 million cases by the end of the year.

We misunderestimated some folks, apparently.

 

Shhh dont wake the VIX's picture

The reporters that were being sent out to cover the story were getting infected with Ebola too.  That may have something to do with it.

Uber Vandal's picture

Well, there are now 35 hospitals set up for it in the US:

http://www.usatoday.com/story/news/nation/2014/12/02/35-ebola-hospitals/...

And that number of 17,800 cases is on track with projections:

http://investmentwatchblog.com/theoretical-ebola-spread-and-death-based-...

Mar, 2014 - Infected: 104 Dead: 62
Apr, 2014 - Infected: 194 Dead: 116
May, 2014 - Infected: 360 Dead: 216
Jun, 2014 - Infected: 670 Dead: 402
Jul, 2014 - Infected: 1,247 Dead: 748
Aug, 2014 - Infected: 2,319 Dead: 1,391
Sep, 2014 - Infected: 4,313 Dead: 2,588
Oct, 2014 - Infected: 8,022 Dead: 4,813
Nov, 2014 - Infected: 14,921 Dead: 8,953
Dec, 2014 - Infected: 27,753 Dead: 16,652

Hint, if these numbers pan out, Labor Day 2016 is going to be very slow.

joego1's picture

Yeah but the dutches of Cambridge if hobnobbing with Obloarang.

Buckaroo Banzai's picture

Our "Ebola Czar" stamped out Ebola...reporting.

The disease? Not so much. Still going strong in Africa.

http://raconteurreport.blogspot.com

Spitzer's picture

In other bubble news, the National Hockey League is seriously wanting to expand a team to Las Vegas

PTR's picture

So is Major League Soccer.  Must be a top.

tarabel's picture

 

 

Who in the hell ships stuff to the Baltic anyhow? I'm surprised the index isn't hovering around 2.

wide mouth kid's picture

ha ha ha; coffee just came out of my nose

ChiefToledo's picture

The problem isn't just dry bulk. Most post Panamax containerships I've been seeing are loaded to less than 35 feet, 33 being the average. These vessels should be running at 37 to 43 feet. At a couple thousand tons per inch immersion, well you get the picture. Dry bulk has been steady but not gangbusters. Most ships are slow steaming and using the extra hulls to maintain schedules.

yogibear's picture

Quick, more Federal Reserve printing!

QE to infinity.

franzpick's picture

The Baltic Dry Dock Index is the leading indicator.

rocker's picture

In today's world, so is copper, (used in most industrial manufacturing needs.) Platinum, (most likely the most expensive to mine and inventories are somewhat low), and then the mother load, Oil, (one that the rich like to use as a tool to regulate the activity of all populations of all nations).  

Truly a sad time for real economic growth since oil prices against the masses have depleted all their resourses of money. Mission Accomplished Koch Brothers and the like.

firstdivision's picture

Leading indicator of what, more QE?  Nothing that has been a proven ecnomic indicator is worth shit since '08 and the great wizards working their magic.  QE5 will be to monitize barges. 

q99x2's picture

It is a triple W recovery. Expect some green shoots.

Stimorolgum's picture

Green shoots are starting to grow on those ships.

swmnguy's picture

The bad part of the BDI graph is the low peak this summer.  That's when all the cheap plastic shit made by Chinese slaves should be flooding American ports for the Christmas orgy of commercialism.  The peak this summer was lower than most years.  That means retailers ordered less shit to sell to the masses on credit.  They knew, or at least predicted, a bad shopping season.  That the BDI is low now is less meaningful than it might appear.  Even though shipping times have sped up incredibly over the past generation or two, BDI and others are still very much leading indicators.

Like the guy who works for a large professional temp agency, I work in a sort of "barometer" industry.  I produce corporate events.  What I'm seeing is a freaking bonanza.  The second half of 2014 was far busier for me than I had anticipated, and already I see 2015 shaping up to be the busiest and most lucrative year I've ever had; perhaps better even than 2007-2008.  Of course, in October of 2008 when the markets imploded, but more particularly when an employee of the St. Regis resort outside LA scanned and sent to the New York Times a $25,000 spa bill racked up by 12 AIG executives, I lost about 75% of my business going forward for 2009.  That was a bad year.  So whenever I see a peak coming, I anticipate the valley.  Corporations are rolling in cash right now, and spending it to whip up the troops.  That's great for me right now.  But it does imply a crash, based on my experience, within 12-18 months.  Were I a gambling man, I'd put a nickel on mid- to late- 2016, right before the Presidential election, as a good time to pucker up.

PTR's picture

If you look at the 5yr chart of the BDY, this is within the sideways range it's been in (minus the upside spikes.)  

http://www.bloomberg.com/quote/BDIY:IND/chart 

 

This downward movement did break down past the 6-month uptrend that was in motion.

 

Always worth noting, but as it seems to always be, the headline is made by focusing on the short-term movements and not the bigger picture.  

 

Nothing new.  All is still FUBAR.  And now back to the show!

gwar5's picture

I did not know the BDI had gone back over 1000. That must have been a rally of sorts. Exsqueeze for not noticing or sending up fireworks. I have given up on the BDI when it died two years ago.

Al Tinfoil's picture

The BDI hit its all-time high on May 20, 2008 at 11,793 then fell to 663 on Dec 5, 2008, a 94% drop.  Up and down repeatedly since, but never near its all-time high.  Hit 4,661 in 2009 and near 4,200 in 2010, but hit all-time low of 647 on Feb. 3, 2012.  Has been relatively low over the last 2 years, hitting spotty highs over 2,000 but mostly being below 1,000.  Ships cannot be returning much if any operating profit at 1,000.