Baltic Dry Plunges 42% More Than Seasonal Norm To Start The Year
Whether it is an over-abundance of ships (mis-allocation of capital) or a slowing global growth story (aggregate demand), the crash in the Baltic Dry Index has been significant to say the least. Seasonals are prevalent (and Chinese New Year impacts) but to try and clean up that perspective, we find that so far this year the Baltic Dry has fallen 42% more than its seasonal normal and is down by more than 50% since 12/30/11. Nothing to see here move along.
and on a log scale, this is indeed an impressive drop...
Chart: Bloomberg
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From these levels a plunge like this is an absolute indicator of a trade war.
MAYDAY MAYDAY
https://www.youtube.com/watch?v=gh5xu35bAxA
WE ARE SINKING!! WE ARE SINKING!!
on the other hand... currency war, trade war, REAL war. the question is WHEN?
For the layman: http://en.wikipedia.org/wiki/Baltic_Dry_Index
First time, in 08, it signalled the death of globalization. Ever since, it's been a sea of digital liquidity keeping global trade alive. It's pretty crazy howmuch money is being spent in India (F1 is here, Paris Hilton was here, Oprah just came and left)....to make people buy t-shirts and mugs...
No natural markets left for this end-gasp of the sell side world. All pump pump pump. Engines of export and import are both blowing thick, black smoke.
We are probably weeks away from something really nasty.
ori
/watershed-day-may-this-pour-through-
Another nail in the coffin for Greece. Stick a fork in em.
Something, somebody, somewhere is going to pull the plug on this ponzi.
Would you like to play a game? How about, Global Thermal Nuclear War.
Gotta keep the secrets a secret. Must not let people understand money. Must make it seem like something else.
Harpex (tracks changes in freight rates for container ships) also has an interesting trajectory
http://www.harperpetersen.com/harpex/harpexRH.do?timePeriod=Years5&&data...
ORI, are you a web bot watcher?
Occasionally they get the release language prediction correct, though it's not what people expect.
Now predicting near continuous and increasing release beginning in March 2012. In past instances, the release language always declined over time.
Make of it what you will.
http://webbotforum.com/content.php?257-Article-Submissions
yup flattrader, long termer here. I like it, zany and brilliant and the premise works for me, really well actually.
opri
Its hard to say its really a demand issue in the context of the massive oversupply of ships, which if I remmeber correctly will not stop climbing for another year or two before scrap and new ships even out. Good freight rates help importers, but commodity prices (fuel and cargo) have offset a lot of it. Shippers were already in the red before the last down leg, I cant imagine what theyre doing now.
gracias
While the World situation is so turbulent I watch in amazement, and thank God everyday to be living in such interesting times. No fear here baby, just excitement for what we are witnessing and living through is a birth.
Like a woman having contractions, one part of World screams in pain, then another. The contractions grow closer together, and any father knows what that means, get off the golf course and hurry to the hospital.
We all await to see what this new birth will bring.
Will it bring a revival of the human spirit where the real producers (people who work for a living) finally demand the non-producers (parasite bankers, trial lawyers, welfare riders) to pull there own weight? Or put more simply; No real work, no food.
Or might it bring the opposite. Maybe the non-producers will overwhelm the system and strip the productive of their hard earned wealth? Will farm lands be seized to provide for the State? Will your small trucking company be forced into servitude to carry goods to those that demand it? And if so how long can that last before someone has to produce?
Will the Christians remember that the events leading to the execution of Christ included him throwing money changers from the Temple? Are we about to toss them to street yet again, and what will be their response if we do?
Will the American electorate wake up and realize that voting for substance is more important than voting for style? One can only hope.
Will science save us? Will new energy forms break through to keep the World working and fed, or will the black gold run out forcing us back to a simpler life style? Would that be all bad?
Many sense a huge creative destruction on the horizon, but what? Jubilee? World War? Dark Ages?
Is it possible that what lies ahead, after some pain, could be the birth of a new reality where the scales are actually balanced as they should be? Could we be close to shedding the efforts trying to force utopia, thereby accepting that the World is not, and never will be perfect and fair for all? Trying to force this goes against the laws of nature and only causes wider spread suffering.
If we ever grow up and face that reality, we can move forward and develop an existence where freedom allows the producers to earn and thus willing provide through charity (And by that I mean giving more than 1% of your income or an embarrassing $369) to provide for the truly needy.
Believe it or not, we still have the power to chose our direction.
Remember this: The Republicans are not necessarily right, they are simply less wrong.
The Republicans are completely fucking wrong on almost everything....Their fecklessness is responsible in no small measure the shitshow we are now experiencing...
The Democrats are a party of no good ideas, the Republicans are a party of bad ideas.
The "lesser of two evils" is still part of the same game. Give people a false choice and make them think that their vote means something... that they are free. It's a charade. Wake up.
I realize that my friend, but what choice does one have? Vote for a party you know is destructive, a candidate that can not win, or a party that is not quite as bad as the other (although still pretty bad).
Simply making the best choice of several bad choices.
BS!
What choice does one have? Well for starters, don't be a pawn. You are a pawn. You provide the fuel needed to keep the charade alive.
That's more of the same. It's part of the scam to keep the sheep corralled. Divide and conquer. You're smart... I know a lot of smart people just like you who vote D. If I wanted to carve out a rational sounding position to support the notion that the D's are the better of two bad choices, I could. I could make equally rational sounding arguments for both sides... and that's the game. The people pulling the strings watch the needle... move it back and forth... just enough. It's easy.
No one that is smart argues one party over the other today except shills who are in on it.
I disagree. I know lots of smart people who aren't "in on it" who are trapped. Deprogramming isn't easy.
@kridkrid - Again... I recognize that... but as yet no one has provided a reasonable solution.
Your point is similar to the Monday morning quarterback club when they snipe, "the coach called the wrong play" but refuses to suggest the proper play call.
What you suggest sounds like not even participating in the game, then we all lose. I know I don't control the rules, and that the game is rigged. I have loathing for those elected (on both sides) and respect for the electorate. So until you snipers propose a real workable solution: I STAND BY MY STATEMENT.
As soon as the People don't participate in the game, then we all win. You and Flak's pathetic desperation in getting people to keep showing up is telling. The shills lose. The shills always lose!
http://youtu.be/O5epuPMf-7Y
Don't you have to run and check the temperature of your bath water??
Do you have any more nuggets of scientific understanding that you would like to share with us??
I haven't laughed like that in a long time...
So taking the temperature of the Earth is equal to taking the temperature of water in a bath tub? Yes, I am embarrassed by my scientific understanding.
Flak, Let's talk about you for a second. You apparently squirrelled away over a million dollars worth of gold over decades of making money through the government research grant con game and now you pretend to believe in part of the government con game. You are like someone who invested with Madoff for years then cashed out while continuing to tell people to invest in Madoff. No one does what you've done and still believes in the con game. You are a shill on par with any con artist at Goldman Sachs or Congress.
I went from academia to Wall St....
Personally invested in long dated oil futures back in 2005... (my analysis showed the Peak Oil was rumbling down the pike...)
Made a fucking killing and am now retired (at 48) working on getting my handicap to single digits...I do some wealth management on the side....
That's my story... Deal with it and go learn some science....
Went from one con game to another. Won the lottery. Now have to justify good fortune. That's even better. Who knew all scientific knowledge came from lowering your handicap? How much time did you actually spend at the bench? Did you go to Wall Street because someone tried to duplicate your data and your grants started to get denied? This is truly a fascinating story.
Yeah, yeah, you made money because you figured it all out. Keep telling yourself that.
I do detect more a just a bit of jealousy on your part....
Ta-Ta for now....
Haha! Where do you detect jealousy in what I said? Right.
Hey, did anyone try to duplicate your results? Are you afraid of even checking? Is your time at the bench something you'd like to forget?
And here I thought the follow up post would be predicting the creative destruction event. Instead the anarchist are bitching about a rather benign statement about Republicans being a mushroom on a Democratic turd.
The opposite of tyranny is liberty not anarchy. Only someone in on the con would make the argument that we must choose between levels of tyranny or suffer anarchy while ignoring the liberty option.
My friend by dropping out and sitting around while your dreadlocks grow, you are inviting tyranny.
One day everyone in fight club will learn - Don't fuck with Chief. He punches really hard.
"One day everyone in fight club will learn - Don't fuck with Chief. He punches really hard."
Are you joking? Only kittens brag about how hard they hit online.
There you go... see, we can agree on a few things....
All you are doing is receiting things that you've heard said, over and over. You've heard it so often that it must feel like warm blanket.
A solution to what? What is the "problem" for which you demand our politicians create a "solution"?
@kridkrid - Try to keep up son. I do not propose politcos provide any solution. I am simply requesting you make a play call rather snipe at mine.
It is easy to say everyone is wrong and take no position. It is also cowardly.
Take a position on what? See... here is the game they are playing with YOU. They have created a false choice for you. You must choose A or B... if you don't choose A or B, your are coward. Right? That is what you are telling me. And you are asking for a solution... I think these are your words, not mine... "So until you snipers propose a real workable solution"
You are trapped in a box of their design.
So... my questions for you are simple...
he plays the game of "lesser of two evils" (A or B)
you call him an idiot and tell him not to participate in their game
he then asks you what you solution is to the system because simply not participating in the A or B game will not solve our problems
I vote against incumbents, especially lawyers disguised as judges.
Switching costs, bitchezzz.
At this point it seems quite a lot of ZH readers/commenters agree that the system is broken and that a vote for either Obama or a republitard is a vote for more of the same. Even though Ron Paul has some great ideas and would be less of the same, I simply don't see him being electable.
With that said, it also seems that many of us are aware or think that some sort of endgame is approaching for both the world and America. Who knows what the timeline of this endgame is, Kyle Bass thinks 3-5 years for America and I think I agree, I'll say it'll be 4 years, by the end of the next election cycle. Hopefully Americans will be completely fed up by that point and be ready to vote for real change. Hopefully a candidate will emerge by then to deliver.
So my question at this point is: Will it be Obumma or one of the republicans that brings us to the endgame (whatever it may be) the quickest?
I tend to think that either Mitt or Newt will accelerate all that is wrong with America and bring us to the endgame faster. Big changes are ahead that WILL happen and NEED to happen, so I say vote Republican and get this over with. Then in another 4 years, after 16 years of serial dissatisfaction with both parties, hopefully we'll be able to have some REAL change in this country.
Well... we need to define what the end is. It could be peak oil, or the end of dollar hegemony, or both. The "end" for both is purely mathmatical and fast approaching. Something new lies on the other side. I don't think our current political debate effects the timeline for either. Here is a fantastic hour of enlightenment, when you have the time: http://www.goldmoney.com/video/martenson-presentation.html
Making no choice is making a choice. Simple.
This is where we are. The Reps and Dems are reduced to saying:
Democrat shill, 'The Democrats are the party of the opposite of good ideas, the Republicans are the party of bad ideas.'
Republican shill, 'No! The Republicans are the party of the opposite of good ideas, the Democrats are the party of bad ideas.'
The Dem vs Rep bs has jumped the shark.
People. When you choose the lesser of two evils: YA STILL GET EVIL!
I down voted you. While I didn't agree with all of what you wrote, I was on board with most of what your wrote... until your very last sentence. The belief that either party provides a path out is part of the box that keeps us in. Wake up.
Oh man! What a giant turd on an otherwise great statement. The upvotes probably didn't make it to the giant turd at the end.
Amen Chief ... like yer soap box , when used rightly pain can become gain right ??
John Galt would have utter contempt for the Republican Party, I would think. Crony capitalism and finance fascism... that's what both parties offer. He destroyed an otherwise reasonable post by suggesting that the R's deserve your support.
Another way to put it...
Name one bit of major legislation with Republican sponsers in the past 40 years that has not led to a disaster?
Gramm-Leach?
Gramm and the CFTFC act?
Deregulation of the Media?
Patriot Act???
Deregulation of almost any industry? (Enron anyone??)
No Child pushed ahead??
TARP??? (Remember it was Paulson that came begging)
-----
Look piss on the two parties but face facts, the Republicans have been absolutely feckless.... whereas the Dems have been incompetent...
I don't think people don't understand how our regulatory bodies work or what they are designed to do. Our gov't is captured by our corporations. There isn't a party who does anything other than provide lip service to an idea that this is wrong. Look at the picture of the all of the rich dudes smiling away as BILL CLINTON signed the Banking Modernization Act. And the "compromise" that pushed the bill ahead... another win for the banking oligarchs, providing another stream of debt creation with the CRA (privitize the profits... eventually make loses public). CFTC - If I'm not mistaken... Sen Tom Harkin was one of the sponsers. Frank and Dodd???? Ring bells? Patriot Act... NDAA.
American politics is EVIL. Not feckless or incompetent... EVIL. Both side, equally.
This is where we differ, the Repubs take the cake when comes to screwing the middle class...
Clinton may have signed it but it was written and pushed through Congress by Phil Gramm. Phil Gramm will be mentioned in the same breath as John Law in any future History of Economics books...
Anyway, if you guys think that this is somekind of backhanded defense of the Dems, you are mistaken. Republican policies and ideology has led to the greatest generation of kleptocrats ever seen....And the Democrats were too fucking stupid to see what was coming....
Phil Gramm - Clearly evil. But the belief that he acted alone is completely naive. I would put Chris Dodd on equal footing with Phil Gramm any day of the week.
IMO... the two parties are both wolves... but depending on how you are aligned... they are in sheeps cloathing. The R's provide the right rhetoric to connect with the segmented part of the population inclined to see them as virtuous. The D's provide the right rhetoric to connect with the segmented part of the population inclined to see them as virtuous. And so it goes.
Yes... there are corrupt and "evil" Dems....
I was going to qualify my statement about stupid Dems to be that some fraction were too stupid to see what was going on, some fraction were complicit and the the ones that saw it coming were shouted down with slanderous arguments....
You are wasting your time with Flak. Most if not all of his arguments are disingenuous.
My word.... coming from you, that is absolutely fucking hilarious....
Why don't you go off and fantasize about your make-belief world while the rest of us take a hard pragmatic look at the real one....
So I'm being disingenuous? Do you know what disingenuous means?
Yes....
Fair enough, you may not be disingenous, that requires a modicum of understanding, which rules you out...
I need to document this. You admitted you were wrong on something.
flakmeister = one angry dude
>>>providing another stream of debt creation with the CRA<<<
What horseshit. The worst actors in this debacle like Countrywide weren't subject to CRA.
A few sub-prime mortagage originators (Countrywide) signed on to community lending agreements to sucker low-income people into their operations and steer them away from banks that had bonafide programs and loans that weren't for shit.
Do some homework. Get a clue.
I've done my homework. I'm not the neaderthal who wants to blame poor people and the CRA for what has transpired. In fact, housing is merely one of the rungs in the global fiat ponzi scheme... not the catalyst for collapse that people want to make it out to be. My point was... even what appears to be "compromise" isn't compromise. It's called regulatory capture. Every card played benifits the few at the expense of the many. Do you really think someone like Barney Frank gives a sh-t about poor people? Please. Do you think the president is driven by altruism?
Total bias against the Repubs and for the Dems.
One Dem bad idea was LBJ's "Great Society". Difficult to quantify, but certainly in excess of 12-13 Trillion and some estimates are "tens of trillions". It destroyed the black families and ruined major cities (like New Orleans). Certainly without this program alone the U.S. of A would be a far better place.
A pox on BOTH their houses!
I am biased against BOTH the Repubs and the Dems.
It took a team effort to totally ruin this country and much of the world.
Go Back to your cabins (or, if you wish, to stay in the corner by the lounge).
http://www.youtube.com/watch?v=gXV1uSb-5_c
And yet all people care about is green stocks. I never believed it would be THIS easy to pull off the greatest transfer of wealth in history...people can be bankrupted, foreclosed on, and fired, and they dont mind as long as their 401K is green. Apparently.
I suppose if everyone became day traders it would be problem solved.
As the sheep sleep,
the new world order creeps.
with apologies to the Limerick King. :-)
the masses are motivated by hunger, fear of emminate death or total loss
we are nowhere near this yet in America (on a large scale), thus it is still up to "sheep dogs" to protect the flock from the wolves and not to abandom the flock to danger or to become a wolf as well.
Don't you need trade for that?
It looks like a reflection of the collapsing Euro market economies.
some fools will try to down play this and make it out to be rosie
Gold you're a bad bad girl...bad!
I meant; I blame pirates.
Which one's? The Pirates of the Carribean or the Pirates of Penzance?
Ice Pirates!
http://www.youtube.com/watch?v=0KcTCRSZBUU
Space herpes!
Remember that shipping fuel prices have been sky-rocketting, definitely an effect on the baltic dry index. I need to overlay these to see what it looks like
Please do and post, I was thinking the same thing. One wonders why shipping can not become more efficient by making sure all ships are packed to the max, but even this might not be enough considering that you still only get a fixed amount of energy out of the fuel. By yes, is this really a reflection of less demand, poor management, or simply the thermodynamics of it all.
well you can add another level of oarmen to the Triremes so they can paddle faster.
Bulk shipping is fairly inelastic because it is always the cheapest way to move low margin materials.
And, all shipping contracts have "fuel surcharge" clauses that allow them to cover their costs over the life of the contract. Of course, increased shipping costs have some impact on quantity shipped, but in this case, it would be the decision to ship or not ship.
I'd say that this large swing in the index, along with the moderate drop off in containers in LB, LA point to less stuff being shipped here.
You would think that higher fuel costs would increase the BDI, aside of course from any fuel sur-charges.
From a report this morning, it looks like the L.A. port is losing business to South Carolina and Virginia ports. So some of thier unused capacity may be to competition instead of global activity. That is why L.A. is fighting the widening of the Panama Canal. Apparently some ships are too big to go through and must unload in L.A.
I believe it was Virginia and South Carolina anyway. The gist of the report was that they are both clamoring for federal money to deepen thier ports. I guess everyone wants to be able to handle the bigger boats.
I am a 747 cargo pilot based in Shanghai.
We came into Pudong this morning at 0500 from Anchorage.
I have NEVER in my 25 year career seen so many ships parked offshore in the East China Sea as this morning, at least 250 large vessels. Could be New Years build up and they are waiting to offload/load, I don't know - or the DBI is accurate.
Our air freight loads to the USA have been decent but I understand the yields are very low and my carrier (a Chinese SOE) is losing 10-12 million USD per month right now and has been since last fall.
Thanks for posting. Sometime in the very near future, posts like yours will be the only source of news available (and the future may actually be now).
Months before the 2008 Baltic drop, land transport (sales of trucks and heavy trailers) dropped as well, in Europe falling Scania truck sales were a leading negative indicator. When transport goes down so swiftly and so deep, trade by sea - a high percentage from China, Japan and India on one side, from South Americas on the other - is a leading indicator of trade downturn.
If the BDI is so far underwater, at some point it must become wet? No?
lol, well said.
Who's manning this vessel? Can it be Francesco Schettino?
dunno about harsh real world economics like trade..
...but this is probably very bullish stocks and T-bills
Back to deranged institutionalised induced euphoria please, let's not prick Bernanke Bubblenomics
Leading index?
That is one confusing graph.
When the Baltic rates fall sufficiently you'll see a sudden rash of maritime "accidents". An amazing coincidence.
why don't they just park them in the desert like jetliners???
oh wait