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The World's Best Known Global Shipping Index has Crashed To Its Lowest Level Ever
Having fallen for 47 of the last 51 days, The Baltic Dry Index (tracking the cost of shipping dry bulk from iron ore to grains) has been collapsing in a well-documented manner by Zero Hedge (though not the mainstream media). With Cramer having told investors of its importance previously, it will be hard to ignore the fact that, as of this morning, the index of global shipping costs has never (ever) been lower at 554. We leave it to readers to decide what they think this means (but we already know what it means for shippers and ship-building companies).
Recovery? "Crisis has passed?" You decide...
On the back of the total collapse in Chinese imports and exports, is this any surprise?
Of course, stocks know best...
Charts: Bloomberg
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OMFG!!!!!! can obama save us or not?
get ready for WAR BITCHEZ
Best Known Global Shipping Index
Hold on....it will come to me.
"Where No Man Has Gone Before"
Trek fans unite.
The Baltic Dry Index is one of the few economic series that cannot be directly manipulated by the Feds, nor can banksters write derivatives against it (no trading market). So it does tell us that all is not well in Obamaland, and globally.
you underestimate the power of the dark side
The darkside underestimates the power of nature.
Bush's faut, he's an oilman
Strongest economy EVER!
EVAR!
Technological progress is lowering the price of shipping. No big deal.
I was told not to worry?
http://www.forbes.com/sites/etfchannel/2011/01/31/are-shipping-stocks-the-best-value-play-of-2011/
Heh, the FED could help the Baltic Dry index....
They are said to be considering QE Astroglide.
If you have problems with Baltic lubrication, you’re not alone! Many factors, including fracking, central bank rate hikes, administration interference, and geopolitical stress can affect shipping production.
Life is too short for high shipping costs. If you’re experiencing Baltic dryness, the FED QE lubricants can help make shipping wetter, more profitable and more satisfying.
lowest ever? new record? must be global warming.
Bailout plan. Move everybody into subprime cargo containers. Teh Goldmans can finance the LBO of container ship owners, by a big cruise line..preferably Carnival.
Vacations will never be the same.
Nature underestimates the darkside of power.
What was the index during 2008 at its finest?
Precisely. It also tells us that the crash in crude isn't an attack on Putin.
From Dead Malls in USSA to Ghost Cities in China, it's the curse of malinvestment.
Now, the malinvestment has become clear, there has been gargantuan "demand destruction", and the global depression is well on its way.
With more EZ money hanging around and less goods flowing... the consequence is left as an exercise for the reader.
So the banks and corporations have access to easy money, but the plebs don't. Demand destruction and deflation among the plebs leads to less consumer goods being imported, but corporations have cheap credit so they keep investing in production. Fewer dollars abroad leads exporters to sell US Treasuries in order to debase their currencies and keep their export prices low or fund the shortfall of low oil prices. US sells treasuries to deficit spend and pay interest on the debt. Too many treasuries on the market means that...
"but corporations have cheap credit so they keep investing in production..."
some of that, but a good bit of just pocketing the money (bonuses and increased salaries and such) since their buddies rig the graphs on wall street showing how well the copmpany's stocks are performing... just blatant theft, chalked up as public debt.. same as it ever was
tightening the shackles 'round grandma's neck.... "but we earned it, we studied finance and economics.."
What's the point of getting bailed out if you put the money at risk? They're all using it to "cash out".
tightening the shackles 'round grandkids necks
FIFY. Granny only has another 20 years... supplied by public debt.
this is going down long before it gets to our grandkids. jus sayin'...
2 wise you are 2 wise you B I see you are 2 wse for ...
Excellent observation.
So the current state of the BDI "... tells us that the crash in crude isn't an attack on Putin."
I'm not saying that it is or isn't, but how do you arrive at that conclusion?
If crude oil were dropping while everything else hummed along nicely then we could start mentioning the oil weapon.
The crude crash is all about a demand crash over all.
Not as much malinvestment as a genuine lack of capital expenditure across the board. The United States' infrastructure, for example, borders on being Third World-level at this point.
The US government is just planning ahead.
Hell, if we are going to be Third World, might as well do it right?
pods
My bet is you have never been to a third world country
I have. I live in Houston. its now little Mexico
TPTB could easily have seen that goods demand was falling and would impact the commodity market at some point thereby using it to their advantage against the destruction of the petrodollar but saying it was entirely market driven doesn't explain why oil producers didn't slow production at all to slow the drop (they need to get something from the deal). Then we continue to see oil prices bottom out and rally while demand is continuing to drop again a big disconnect there too. Sounds like we have a perfect storm brewing now (political interests coupled with cratering market demand) and it should be here just in time for the next president to deal with.
It also tells us that the crash in crude isn't an attack on Putin.
And that somehow includes the fact that at the same time the Saudis aren't cutting down on production?
Surely a privately produced index is easy to manipulate, just got to take the right person out to lunch. Data in white is hard to spot on most spreadsheets.
You are abolutely correct and thei index portends a global collapse right before it occurs. Just like it did in 2008.
~"The Baltic Dry Index is one of the few economic series that cannot be directly manipulated by the Feds, nor can banksters write derivatives against it (no trading market)"~
And do you remember when you thought it was bad at 750? Five-Five-Four, bitchez. So much for central government-planned economies, eh?
Rap it up bitchez!!!
https://www.youtube.com/watch?v=yiRjywbypLA
Back on the previous low, didn't something follow in the stock market?
Wolf of Wall Street popped up after the 87 fire in the hole.. The next creature to emerge from the upcoming ashes of Vallhalla Street will probably be oriental looking and packing a shitload of gold.
@ cog:
"Where No Man Has Gone Before"
Trek fans unite.
Analysis, Mr. Spock?
It appears that we are trapped in a general economic dampening field that is sapping the energy from the warp engines of the economy, Captain.
Mr. Scott, what can you do about it?
Well, Captain, perhaps me and Mr. Bernanke COULD rig up some type of makeshift printing press down in engineering...
Will this 'printing press' cause the B.D.I. to rise, Mr. Spock?
Negative, Captain. The inflation effect would only be temporary. Without a gold or silver backing...
What about it, Scotty?
The Vulcan's right. I canna change the Laws of Economics...
Why the Chinese exports and imports are down?
Why nobody asks this important question?
The important question surely is "why weren't the previous numbers revised down, making the current turn positive"?
Steve LIESman: "This just doesn't make sense, the fundamentals are strong"
Gotta put sumptin in dem ships. Mightnswell be dem troops.
When goods stop crossing borders, troops do.
Which war are we going to lose now?
Negative Rates... Sarc tag please (as he cleans up around the face and computer)
war is hell
but so is austerity
War isn't hell, war is war
How do you figure ?
Easy Tell me who goes to hell ?
Sinners, I believe.
Exactly, there are no innocent bystanders in hell...
MASH
Keep Calm. It was only due to "a shipyard worker* dropping a cigarette".
* From Donetsk
"We ship wrecked some folks"
Demand for commodities is low despite the increase in liquidity by central banks around the world. So much for that QE = inflation theory.
Why not just use the ships to haul various currencies around the world. Stop the madness of computer digits representing money and print the real thing. That should fill at least 10 Ultra Large Container ships in just USD alone.
yep, no inflation, bacon is $6 a lb and was $3 a lb two yeras ago.....spot on ANALysis there, sport!
Inflation in the things you need, deflation in the things you own, to include your labor.
The lie (and it is a big one) is that the QE is designed to create inflation or at least prevent deflation when we know from last 30 years of Japan experiment that it creates deflation - say one thing do (does) another.
NOT...well unless you are a billionaire...then he can print you what you need...or loan you unlimited at -2%
Obama can't and won't save us but Brian Williams has a few days off so there is hope.
You don't need ships to move the only export the US produces...digital fiat debt.
Ships burn oil, Oil is down, shipping cheaper yet no demand.......???? But, But But
I am sure I heard that the crisis had passed and demand will resume and its all priced to perfection and Apple rocks.
Time to buy Shipping stocks...... The the Moon, Alice
Of course, stocks know best...
SAYS IT ALL! BUY!
btw, how many $100 bills can a VLCC carry? BUY!
who?
(second?) :)
time to taper.
Tom Waits - Train Song
https://www.youtube.com/watch?v=C5HTx758IpE
Drymmberrrrrrrrrrrrrrrrrrrrrrrrrr!!!!
stateside
Kinda what happens when Supply (more ships) increases and demand decreases.
Calling all Kensians. Please report to nearest TV studio for explanation.
Now don't knock Keynesians. Keynes advocated a government surplus in the good times. The MSM tells us it's the good times. So where's the surplus?
We should order Mr. Henry some coffee. He's going to have a busy day managing the 'Invisible Hand'.
Yea but the HARPEX has been screaming upwards. http://www.harperpetersen.com/harpex/harpexRH.do?timePeriod=Years2&&data...
May merely be witnessing a shift in shipping method. Certainly Asia is shipping as much crude as they can get their hands on.
I wouldn't call this screaming: http://www.harperpetersen.com/harpex/harpexRH.do?timePeriod=Years10&&dat...
But what do I know?
Great minds think alike. ;)
screaming, "look out below"
Well above the 2 yr...approaching the 5 yr. I agree over the 10'yr span it is epically weak, but with the BDI bottom falling out at the same time Harpex is rapidly rising, COULD merely be a shift in shipping method. Or as I stated it could merely be due to Asia shipping crude as fast as it can in order to secure a large stock of crude before price rise begins.
Harpex is for container ships. Crude doesn't ship in containers.
The 10 Year (and 2008 was 7 years ago) looks like an amusement ride I took.
Tower of Terror it was named.
I've been down so long it looks up to me.
Crap thats bad, as bad as it gets
Look at the 5 & 10 year - relativity
it is approaching the 5 yr ave.
When the last five years have been epically shitty, that's not saying much, is it?
Screaming higher? It is at about 50% of the long term mean and the long term chart looks like it is currently dragging along the bottom.
Edit: I'm obviously slower than the two above me.
Floating storage for unsold oil
Yeah, yeah. Keep it off the market so that then...
IT WILL BE WORTHLESS!
Wrong harpex has been flat. A little uptick as Asia dumps inventory.
I was thinking little uptick as Asia banks crude.
Whatever papa, bottom bouncing is still a fair description of the overall chart. Having said that, I agree with you, the BDI hysteria discounts the more accurate HARPEX .
no...harpex is phase lagged w.r.t. bdi. bdi better leading indicator.
Nice timeline selection.
Agenda much?
The 2yr chart is the default on the HARPEX site. Call them if you dont like it. Has nothing to do with agenda merely putting out possibilities which apparently isnt popular today.
Don't sweat it. Thanks for sharing.
Indeed always good to hear a different perspective!
The index began in 1985. That's the the entire timeline since the beginning.
Here comes QE4
Buffet not yet bought DRYS , no bottom !!
Winter is back ...
The really bad news is spring is coming.......and I think we all know what that means.
Fawns? Crocuses (or is it croci)?
A lot worse that that..
Allergy season!
Use excess capacity to start shipping accountants between banks?
It's a historical repeat.
It's all based on debt and there's too much of it.
Corporations have arbitraged wages and wages cannot sustain the current debt levels.
Too many people worldwide willing to work for just a sustainable wage.
Half right.
"Too many people" ..... covers it.
It's not sustainable wages that are the problem but no much better-paying jobs available, nor will there be, globally. How you are doing depends more on your individual entity.
Its purpose that is lacking not work nor hands to do it.
This is an important comment (above). I'll twist it just a hair, and contend that there is not lack of natural resources, there are NOT too many useless eaters, not too many farts in the air. There is plenty of real estate, a whole universe full in fact. What there is, is very poor leadership. The cream rises to the top? ... and turds float
Unfortunately we have been inundated with the turd variety of Demoncraps and Repugnicans floating to the top of the political cesspool.
The shadowy evil, bankster impresarios have won this round......But they shouldn't make the mistake of counting their money while we are still sitting at the gaming table. We outnumber them millions to one.
End The FED!!!!!
Seems it would indicate low demand for dry goods due to global slowdown.
It's ok, soon those ships will be loaded with tanks, guns and ammo. It's today's commodities.
There is certainly always a market, or you can create one overnight.
Don't we have to wonder of U.S. factories full of illegal aliens and America-hating muscums are going to be producing reliable American weapons?
<--- Just a snowstorm
<--- Kondratiev Winter
Enjoy the colors before the leaves fall.
We leave it to readers to decide what they think this means
It means everything is great according to Govts around the world.
It means we will get more Obama's face on TV telling us how everything is great.
It means we will get a huge comex take down in gold & silver.
It means the DOW, S&P, and DAQ will rip higher.
It means Cramer will ignore it forever more.
The central planners are looking for a huge war to increase demand by massive destruction.
They'll be hiding in their secure compounds in the southern hemisphere. These are the hideous criminals.
The Triad has pretty much neutralized them recently. My bet is those bug-out compounds are to escape & hide from the angry mob.
What's the Triad?
http://en.wikipedia.org/wiki/Triad_%28organized_crime%29
Think of them in terms of neutralizing the NWO/Agenda21/Rothschild Regime.
I'd appreciate it if you could elaborate on this, or point to further analysis. Thanks.
Chinese mob is going apeshit recently. Considering the recent executions of the mobster businessmen, links like the two below get shown in a while new light.
First link is Reddit conspiracy. Please bear with me on this.
Anonymous Chinese blogger made a time-stamped post warning Chinese people to not fly with Malaysian companies, as a Chinese gang (which purportedly brought down the first Malaysian plane) was actively working to undermine that countries corporate travel corporations. Which didn't make sense to me at the time. Why would a game want to undermine a corporation? Makes sense if a CEO/big cheese is involved.
http://www.reddit.com/r/conspiracy/comments/2qneik/someone_in_china_warn...
Second link of the original bog post.
http://bbs.tianya.cn/m/post-worldlook-1339619-1.shtml
Roughly translated:
This was thirteen days before the Air Asia crash on 12/28/14, just for the sake of thoroughness.
But I have a feeling that he's talking about "the dragon family." Short and skinny on that- An Asian wing of the NWO, which is supposedly bickering with the other groups. I've seen this on the real fringe conspiracy sites recently.
Reduce taxes by 10%. That would put about 300 billion in the economy. Why waste it on war
Thank god the stock market is at an all time high otherwise I might be concerned about the economy right now.
Well, let's at least have empty freighter races and Wall St. can sell derivatives on that basis and push the DJIA over 20K....
Throw in a few USSA and Russian attack subs, televise it live, get Ladbrooks & Vegas in on the action, sell lots of merch. (maybe some little freighter captain action figures for Tommy) and a major psyop industry is born.
It's the weather.
Maybe arms shipments to Ukraine will help boost the index.
Bloomberg counters ZH
http://www.forbes.com/sites/timworstall/2015/02/05/why-you-shouldnt-worr...
the drop is from an oversupply of ships, not lack of demand of commodities or products. So there 'excitable' ZH, its good news because some folks ordered too many ships and had them built. Never mind the BDI is also considered one of the least 'manipulatable' indices out there
the drop is from an oversupply of ships
The makeup girl came up with that one....
Mmmk, and as ZH points out, China's crashing import and exports are because of...?
Too many ships, silly.
Public Holidays maybe or Lack of interest or ....wait I have it
everyone stockmarket gambling and not working
It is obvious there are too many ships. No one is shipping anything on the ships that make up this index. Hence, an excess of ships.
building ships is bullish, I got it.
People, the Baltic Dry is down primarily due to the looming strike at west coast U.S. ports. No one wants to ship goods when it will not be unloaded at its destination!!
HARPEX is up, so doesnt quite fit. BDI is more raw materials ( copper, steel etc). Alot of either finished goods and/or crude being moved. Possible a rush to ship before the strike hits.
There is an article in Britain's "The Independent" newspaper stating that Putin intends to invade the Baltic states. Perhaps the index has been dropping in anticipation of this coming invasion. This newspaper is a well known long-time participant in Operation Mockingbird, a CIA operation.
No news in the US is allowed unless vetted by the Secret Government.
Isn't the BDI a measure of WORLD data.....not just a measure of the performance of U.S. Left Coast criminal morons and their dupes?
Oh dear.. the Americans thinkers think The World revolves around the west coast.
Only Kadshians ass matters
Krugman says people have substituted dry goods for wet ones.
Pretty soon hookers will be dropping their rates.
Happy days are here again.
Is there an Ass Index?
Yes, the Yellen "exit only" dictum.
I think that is just because it is Winter in the US and we don't need any more shipments of 10000 foam swimming noodles right now.
Buy Stocks!!
The baltic dry index is an assessment of the price of moving the major raw materials by sea. What if the declining index is not a lack of demand but because the cost of moving these goods has fallen due to the recent declines in the cost of oil? If this is the case, then the QUANTITY OF DEMAND is shifting due to increased supply (via plentiful cheap fuel). This is not the same as lack of demand and can only be perceived as a good thing for US importers (barring any strike from dock workers of course).
https://www.youtube.com/watch?v=jKohUlfC2lo
I think this is why it's very important not to only understand the index's but also the underlying reasons why they move. There is a difference between a shift in the supply/demand curve and a shift in the quantity demanded due to increased supply.
Are there other reasons to be concerned about the economy? Yes absolutely. Just look at labor participation, national debt, median average income, margin debt, and of course derivatives exposure. All of these technicals say that a very bad day is coming for the majority of people. But sadly, too many people don't care. We had a chance in 2008 to address the systemic risk in the market and all the powers that be did was double down on a system that is drunk with risk.
They were drunk in the 1930's as well. History is destined to repeat itself because humanity repeatedly forgets the lessons from the past.
J
p.s. The price of oil is hurting shale companies but is a tremendous opportunity for BIG OIL via mergers and acquisitions. With oil at these prices, they are able to snatch up these shale producers with pennies on the dollar. Good for big oil while putting pressure on Russia... seems to me like the US oligarchs know exactly what they are doing. Let us hope is doesn't backfire on them.
>>>
...recent declines in the cost of oil
<<<
Good idea but the oil fall is a more recent thing?
Watson
If anything says "renal shutdown" coupled with "cardiac arrest" for the World's economies This is it!
TERRIFYING!
Looking at the chart the answer is easy - QE 4, 5 and 6!!!
:-)
Harpex if for container ships, not tankers. Looking at the numbers, it appears that the recent price for smaller vessels has remained constant while that for the alrger vessels has increased.
Things will improve after WW3 is over or the Obama show gets cancelled.
Battlestar Tellus and WW III show will start shortly!
From a link in the main article:
>>>
Shipping analyst Peter Sand at shipping organisation Bimco said 2015 looks set to be dull on the demand side, whereas the supply side is likely to provide the same amount of new capacity as in 2014. “Such a development will not improve the fundamental market balance,” he wrote in a note.
<<<
_Such a development will not improve the fundamental market balance..._
Peter Sand is clearly a master of understatement.
His remark approaches the (very) high standard set by Emperor Hirohito, just after Japan was nuked (twice):
"The war situation has developed _not necessarily to Japan's advantage_".
About equal to the English military guy in the Korean war who, when asked by his US boss about his troops situation, remarked that they were in a 'sticky situation'. His US boss thought nothing of it, actually the English troops were fighting back-to-back...mind you, thinking about the US friendly fire reputation...
Watson
Nice interpretation.
Wonderland is less confusing.
Who's been fracking the Baltic Dry?
To prevent some from claiming the chart's scale is rigged, it may be best to state the changes as a percent of increase or decrease from the end of QE3.
WTI: -37.2%
30Y TSY: -28.7%
Baltic Dry: -49.1%
But.... S&P +1.4%