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Baltic Dry Plunges At Fastest Pace Since Lehman, Hits New 29 Year Low
The Baltic Dry Index dropped another 3% today to 590 - its first time below 600 since 1986 and not far from the all-time record low of 554 in July 1986. Of course, the absolute level is shrugged off by the over-supply-ists and the 'well fuel prices are down'-ists but the velocity of collapse (now over 60% in the last 3 months) suggests this far more than some 'blip' discrepancy between supply and demand - this is a structural convergence of massive mal-investment meets economic reality.
The Baltic Dry Index drops even more... new 29 year lows...
The fastest 3-month plunge since Lehman...
Over-supply...
Or under-demand...
Charts: Bloomberg
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29 year low.
Ramming speed?
green shoots people.........wtf?
This is gonna be really fucking bad people!
Prepare!
Green shoots? Now one said B-Cups was coming back
You don't need shipping containers to send "Facebook Likes". It's the new economy duh!
Exactly. I'm establishing a new corporation that will manufacture witty tweets about celebrity news events and sports scores. I expect to make a fortune, with minimal investment in infrastructure. This is the new economy.
It's all OK, because according to BLoomberg, Americans are splurging their "windfall" from cheap gasoline:
“We’re finally starting to feel like we’re back in the middle class,” Cheryl Saul said.
http://www.bloomberg.com/news/articles/2015-02-02/how-we-re-spending-our...
at 65yrs after a refreshing shower i sometimes stand in front of the mirror and contemplate a descending baltic dry
Could be bad news for Somali pirates....
To paraphrase henny youngman:
Take my container ship, please.
I told the doctor I broke my leg in two places. He told me to quit going to those places.
Henny Youngman
If you're going to do something tonight that you'll be sorry for tomorrow morning, sleep late.
Henny Youngman
Wife said she wanted to go somewhere she'd never been before, I said try the kitchen.
classic. that one never gets old (and always gets me in trouble - lol).
Yeah, and Vegas trips just to throw it back.
LOL... but Bloomterd never bothered to interview Cheryl or people like her (who felt pushed out of the middle class) until now. No propaganda in 'Merican media. None whatsooooevah...
And what did these 56 year olds spend their windfall on? "In October, they visited Disney World, their priciest vacation in ages." Just sad.
Due to their $80/mo windfall over a few months, they spent $3,000 on a vacation.
What's really gonna be hilarious is when the the BDI crosses under that record low at the same time the S&P hits another record high. Hard to believe both of those things could happen at once. But, I have been assured by top govt regulators and fed officials that the markets aren't manipulated so it can't be that.....
I think it's fair to say that if you're not in the immediate oil and gas industry, the lower oil and gas prices will cushion the impacts of a parallel domestic and/or global abrupt slowdown, for the first quarter or so.
In which case you may get a slow entry to a later steep fall, or a slow fall where the hydrocarbon price cushioning and deflation keeps it as a slow fall for 2 to 3 quarters.
It's the longer-term 4 to 5 years of global macro trend sliding that worries me more, it isn't going to stop soon.
When is your IPO?
Higher productivity = lower prices = higher standard of living.
They tell us lower prices are bad. That's why they keep printing
Is this why some of the shippers stock prices shot up today cause it is looking so great???? 2 x WTF?
Since 1986, you say? Fantastic. This should be quite bullish for the s&p. We gotta try harder though, and get that bitch into the 500's. That'd be something to be proud of.
I suspect that we're going to start hearing about more and more ship disasters at sea. Bermuda Triangle, mystery explosions, loss of all hands, etc. It happens every time shipping rates drop below profitable.
Might be a good time to make a "few cents on the dollar" offer on one of those things. They're probably over-leveraged like everyone else in the New Normal. Someone has to make all that spice flow, right?
All I know is LA port is backed up, I have 2 containers in port waiting to offload since Jan 19th. Still no word as to when it will be offloaded.
Customs
No. Recovering from the 2014 port strike...most people don't build any excess capacity in their systems now. So the port is clicking away but can't catch up....rerouting containers to the east coast to try and easy the burdern.
it means nothing.... WE'RE IN A FUCKING RECOVERY GODDAMN IT!!!!!!!
"Welcome to Costco I love you"
go to finviz and scoll over the commod futures. see the pattern.- anupside down hockey stick. 6 month til chaos. all indicators flashing red. you name it. dr. copper. electicity usage, baltic. i don't need to go any further to know the shit is starting to spray a fine gritty mist for everyone to consume.
green is drug use to escape, but unreported...
denver boom town frac up crack pot central -ya mon, good shit(while holding my breath) ha, ...
edit. oh and treasuries, hello, brightest red light flashing -flight to hide somewhere..
BDIY has been on my list of "things to watch" for a long time now. Gonna have to up the DEFCON status here.
Just remember: due to the magic of margin calls, gold goes DOWN in price during crashes :)
less ships running the seas less oil they use too
The index would be wetter if I took my shirt off.
First over supply then under demand.
So bullish. Dow Jones 20k or bust! BTFD!
who cares...
the dow just went green again...!
Funny how all these numbers all collapse to pre- 1990s levels. It's almost as if all the leverage from that era forward needs to be wiped out in order to purge the system. Even the market wanted to find it's natural floor around S&P 450 before the fed finally caught the falling knife at 666.
capitalism is dead. New era will begin, but first we need to go back in history, because we make a mistake.
Capitalism, never existed. There are no such thing as bail outs or "too big to fails" in a capitalist system. In a capitalist system you are rewarded by markets for your success and punished for your failures.
Holy shit, someone nailed the definition!!!
+1 Dr.
Capitalism is dead because the federal reserve and US gummint killed it
Not surprisingly, the FED was also worried about deflation (strong dollar) back in 1986. They goosed the markets ahead of Greenspan's rate hike in Aug. 1987. The rest is very predictable.
1980s levels will only be the first pit-stop on this devestating unwind centuries in the making. We are living in historic times.
and Point72 Cohen is hiring college grads in their 20's. Those kids were not even contemplated by their parents back in mid 80s.
They have no clue how FUGLY things could get -
NoVa
"We don't hire brokers, we train brokers. You can leave."
-The Boiler Room
Can't up arrow you enough Doc.
Recall, world population was about 2 billion less in 1990 than today.
But...this should all work itself out O-Tay!
I think gas consumption is pre-80s at this point. Labor participation rate, as well.
It's like we hit rock bottom and kept on digging.
TRANSITORY.
Could be in for interesting times.....
Once cheap oil has killed a bunch of oil production and all the old rotting ships have been scrapped, where will any 'recovery' come from?
If production starts to increase, the cost of moving shit around will be prohibitive.
Maybe it will force producers to produce closer to their markets - could take a while, though.
BDI goes to infinity - nothing moves.
JIT delivery? LMFAO
"BDI goes to infinity - nothing moves. "
The two corollaries to this are :
Supply goes to zero, nothing moves.
Demand goes to zero, nothing moves.
Buncha' ZH'n Doomsdayers is what'cha all are:
http://www.marketwatch.com/story/what-the-market-hacks-fail-to-grasp-abo...
What does the ZH crowd say to this???
Welcome to the revolution?
Malinvestment any one? buncha free money thrown around at overpriced overproduction spells DOOM.
I say I'd like to buy him for what hethinks we're worth and sell him for what he thinks he's worth. Krugman too.
It's funny to me that him and draghi talk about inflation not happening under QE as some predicted, while none of their growth / escape velocity predictions from QE have happened either.
I think it's an obvious hit job... an attempt to quash any alternative thinking and to ridicule Austrian-economics. The elitists always show you who they fear by trying to ridule them first. "You're buying gold? Well, you must be a real freak!"
Oh, inflation? Don't get me started. That fuck obviously doesn't have 3 growing young hockey players living with him who drink gallons of milk a week and eat tons of food daily. People like that are complete asswipes.
Another High Priest of Financial Fraud!!!
"Simply put, we live in a world in which there is too much supply and too little demand. The result is persistent disinflationary, if not deflationary, pressure, despite aggressive monetary easing."
Too much supply is the epitome of a higher standard of living, and this fraudster tells us that the CB's are working overtime to steal those gains from the plebs. Monetary easing means counterfeiting, a productivity tax.Funny how htere wasn't one word about demographics.
Now that the baby boomer bulge has gone throught the garden hose and their spending has slowed because they have everything, This accounts for the global slowdown and it cannot be picked up without a major increase in the birth rate. emerging markets will help but without the finances they cannot pick up the slack.
This baby boomer reality should have been predictable.
Harry Dent predicted it.
Money printed to cover bank losses is not inflationary.
This is very easy to explain. All countries are now self sufficient and have no need to import or export products/materials. Wait, actually, all goods are now delivered via air and rail so nobody needs sea shipping resources anymore. My bad as in reality, 3D printing/production has taken over the world as everyone can simply print what they need in their own home or business. Or, better yet and while we were all sleeping at the wheel, StarTrek technology is now a reality with the invention of the Global Transporter and all goods/products can simply be beemed anywhere in the world at any moment.
Just preparing everyone for the endless reasons on why the BDI rate is decreasing from MSM and TPTB as one thing will be for sure in their responses. It has nothing to do with the real economy.
http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm
How much lower can the Baltic Dry go?
to zero
its in limbo for sure
That thing has seemed to hit "new lows" almost daily for as long as I've been halfway paying attention to this stuff.
And, here's why.
http://www.rba.gov.au/publications/bulletin/2013/dec/images/graph-1213-2...
so glad these idle ships arent creating that dangerous co2
deadly co2
dastardly co2
Pure poison !!!
I mean the trees HATE CO2, yessir!
During the day trees take in CO2 and convert some of it into sugars using photosynthesis.
At night they emit CO2
The difference between the two is, pretty much, the tree.
Wonder what tree farts smell like?
Falling commodities are messing with a lot of shipping. Countries can deny shipment of produce for instance that is only a day old and they're exercising this option A LOT, wreaking havoc for producers that are left empty handed.
Well, it's clearly time to reform this outdated measure, and create something better suited to accurately reflecting the health of today's robust "markets".
Would that be a BDI "Hedonics" measurement of the economy?
Who needs goods when you can have financial paper notes?
who can't eat a financial note, know what i'm sayin'
oversupply and some decreased demand but mostly oversupply. Means next to nothing regarding the rest of the world economy. BDI is prone to wild swings and Jan and Feb are the slowest months every single year.
101 businesses NEED to ship dry bulk. There are 100 ships = huge price spikes (it costs more if your bulk doesnt shipped, youd rather pay up)
99 businesses NEED to ship dry bulk. There are 100 ships = huge price declines (no fleet operator wants to have the ship without a charter)
"Over supply...or under demand?"...I say both. Convergence bitchez. shit, and i thought 666 was the happy low#
Well new Air Freighter Orders are just amazing <<<ZERO>>>
YES!!! The ship shipping ships are back baby ! Stack 'em high.
Doesn't matter. We're a "service" economy now..
an article from 2003 in Slate? haha.
Six years later, Business Insider had a 180 degree perspective on that.
http://www.businessinsider.com/the-cost-of-global-shipping-is-a-lousy-ec...
I agree with the Slate article, BTW.
Correlation:
http://www.investmenttools.com/images/wfut/crb/bdi_sp_log.gif
Sure it does not correlate anymore, because BDI is not manipulated.
The worlds economy is slowing down and the BDI shows it. The only difference is the Stock market is being propped up, but for how long i don't know. All i can say is the next collapse will be far worse than the last. Try to be as self seficient as possible. If the dollar goes into the shitter, it's gamve over and life as you know it will change drasticly almost overnight and most people won't know what hit them.
The BDI has been used since 1744 and can be used as a precursor of a slow down. This also tells me that GDP is being fudged.
this is not correct. You do not understand the supply dynamics in the current shipping cycle.
Fed buying ships now to shore up this segment as well. Nothing to see here.....
It is high time that this archaic dinosaur Index gets modernized to more accurately reflect the real picture regarding movement of goods across the planet.
Seasonal adjustments need to be factored in, and the large number of maritime drug shipments and white slave rings operating at sea need to be included as well. Those high-value charters would help the Baltic reflect the real economy much better and show that we are actually in a roaring expansion.
... yep
Ahhh, you mean like the good ole usofa, adding copyrights, trademarks, songs, and books (hookers and blo) to the GDP; not to mention the fake CPI and Labor numbers, just wonnerful'!
Ok if the world is in a ROARING expansion. Please explain this.
http://www.gfmag.com/global-data/economic-data/worlds-unemployment-ratescom
And explain why there were 24 million on food stamps in 08'and now there are 46 million?
i think he/she was being sarcastic( the part with the drug shipments and white slaves).but ya never know around here without a <sarc> tag
Best thing about BDI is it is fairly resistant to manipulation.
Keep your beady eye on the BDI!
Why Becky Quick is that you???
This! ^^^ The Baltic Dry Index is telling, isn't it. When all the world's sovereign DEBT governments, give each other worthless fiat, what could go wrong?
Lemme see now . 1986 you say.
I had just got myself some bridging finance for two years to get into some hot real estate ; well, a farm in NZ
The interest rates on the consecutive 180-day bills went . . . 26%; 22%, 19% ; 17.5%.
And what happened shortly after? I'm not likely to ever forget, even though I survived that round.
Geez... I've been watching this site for quite a few years, and decided to join up because it's like a slowmotion trainwreck that I can actually comment on. In the last 3 months, I've seen nothing but permabear myophathy, and voodoo correllations. There are some actual gems and useful insights on things such as employment and debt. In the meantime, I'm up big on being a bull. Well, up for a long time, to be honest. Maybe I should see get out now because some boats are in drydock, or MOOAAARR, or TPTB, corporate Murica, TBTF, or whatever people here say to feel better and stay poor? Or should I continue to bet on an economy driven by the worst savers in the world?
this is for you, enjoy: http://rationalwiki.org/wiki/Zero_Hedge
Now I understand why I like this site so much.. Great Job Guys!!! Thanks for the link to understanding the "Zero Universe".
Gold bitches...not to be confused with "Gold, Bitchez!!"
Is that a Shipping Ship Shipper Shipping Ships?
(after the Judges' article I had to, please don't Judge me.)
after reading that..i ship my pants
ship for brainz...
Oh ship!
ship in your mouth
hey 37 - you missed one....i believe the original was a "shipping ship shipper shipping SHIPPING ships."
(just in case you give a ship)
Can any other language besides English construct such a sentence? :>D
Who is responsible for accurately presenting this index? Hard to trust any stats anymore.
Place a call to 5 shipping companies.
Ask the going rate for say 100 tons of - fill in blank - from - fill in blank - to - fill in blank -
Add 'em all up, divide by 5
not too hard to check out, I don't think.
so..do you need to be a plutocratic institution or hedge fund to buy derivatives on the BDI?
If its REAL, drop it like its hot and buy the fucking ponzi dip..... and sell it just as quick.
It's real, but so easy to check for accuracy that dirivitives on it would make absolutely no sense.
The lower lows on that chart are pointing to a new low dry dock index at 499, or less.
https://www.youtube.com/watch?v=w7RIgs3eygo