Will The Baltic Dry Bounce Off Satan's Bottom?

Tyler Durden's picture




 

Dante would be proud; the Baltic Dry Shipping Index has now plunged through at least eight levels of hell on its way to record lows as it drops to 666 today. This is the lowest since Feb 2012's Chinese New Year lows and is a stunning 55 percentage points lower than the normal seasonal shift in the global aggregate trade indicator (and down 69% from its Oct 2011 swing high). Whether its over-supply, under-demand, or too many Chinese New Years, it is unarguably the next level of hell for the global economy - that will surely bring all the bottom-callers out as this time is different.

 

 

and if you thought it was just the Baltic Dry... here are the Cape, Banamex, and Supramax Indices... noneof which receovered at all from the 2008/9 crush in global trade...

 

Source: DryShips

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Mon, 09/10/2012 - 08:47 | 2777973 LawsofPhysics
LawsofPhysics's picture

Maybe, depends how much stuff will need to be shipped during WWIII.  Growth is dead and there are 7 billion unfunded or at least underfunded liabilities walking around and all eCONomic and monetary systems depend on growth to sustain debt - FAIL.  Get out of debt and get physical.  Can we get a chart going back 100 years?

Mon, 09/10/2012 - 08:54 | 2778001 MillionDollarBonus_
MillionDollarBonus_'s picture

This is bad news for peak oilers. Shipping capacity is well in excess of demand for oil. The oil price looks like it's about to drop off a cliff, especially with the very real competition provided by green technologies like wind farms and biofuels.

Mon, 09/10/2012 - 09:00 | 2778020 dbomb12
dbomb12's picture

Not as long as the oil is priced in dollars

Mon, 09/10/2012 - 09:04 | 2778024 reload
reload's picture

Conflict....or the prospect of likely conflict in the ME changes the dynamics of the oil price. Its not only about current supply/demand but about what happens the instant there is a major interuption to delivery from the ME. 

But why not put on a short crude trade as a pair with your long FB.What could go wrong?

Keep us entertained.

Mon, 09/10/2012 - 09:16 | 2778060 Meesohaawnee
Meesohaawnee's picture

good or not good trade. i have some DTO to short crude. maybe it will work out

Mon, 09/10/2012 - 10:14 | 2778214 Hobbleknee
Hobbleknee's picture

The script for the "conflict" was written decades ago.  Everything follows the script.

Mon, 09/10/2012 - 09:02 | 2778025 GetZeeGold
GetZeeGold's picture

 

 

He sent his only begotten son......I'm pulling for you chief.

 

Mon, 09/10/2012 - 09:03 | 2778031 LawsofPhysics
LawsofPhysics's picture

Baltic doesn't ship oil, which is currently now over $96 for WTI and $114 for brent.  Weak MDB, almost like you aren't even trying.

Mon, 09/10/2012 - 09:33 | 2778104 MillionDollarBonus_
MillionDollarBonus_'s picture

It's a proxy for industrial demand, and for shipping capacity in general. Nobody needs oil anymore. The green revolution is picking up speed and will soon make oil obsolete, so peak oilers need to give up their dreams of becoming masters of the universe. 

Mon, 09/10/2012 - 09:38 | 2778123 nope-1004
nope-1004's picture

pwned

 

Mon, 09/10/2012 - 09:48 | 2778146 gggunchi
gggunchi's picture

Pray tell . . . what is going to run the trucks to get goods to market?  Or ships that get goods from Asian to eveywhere else in the world?  What are cars going to run on?  What are we going to make rubber, plastics, and other semi-and pseudo- synthetic materials out of?  How are we going to fly in jets, or heat our homes? 

 

I mean maybe we could use Whale and Baby Seal blubber . . .

Mon, 09/10/2012 - 11:04 | 2778433 Acet
Acet's picture

Unicorn piss, bitchez!

Mon, 09/10/2012 - 12:57 | 2778847 Colonel Klink
Colonel Klink's picture

"I mean maybe we could use Whale and Baby Seal blubber . . ."

Leave the poor critters alone.  We have a far greater supply of American people blubber and apparently it's a renewable resource.

Mon, 09/10/2012 - 14:00 | 2779128 entropy93
entropy93's picture

People who claim oil can't be replaced have zero imagination. Or often on take from oil industry.

Freight: Electric freight trains and last mile electric trucks.

Ships: Biofuels, wind and solar combo. Already some are using giant kites to cut fuel costs. World trade existed long before oil, and it will exist long after. There is also the Russian to Alaskan rail tunnel idea. Could run all electric freight to entire Northern hemisphere.

Cars: Plugin highbred cars already work. Quantity will bring price down, put fast chargers in every parking lot. Rarely for a long trip you'd need to spring for some biofuels. Forget ethanol nonsense, diesel is much easier to produce directly, great for hybrids.

Synthetics: Many use very simple feedstocks such as methane, easy to produce from biomass. Some may require cracking of biofuels down into simple hydrocarbon changes. Nothing a refinery cracking unit couldn't handle.

Planes: biofuels, or potentially liquid hydrogen. Excellent aircraft fuel due to low weight. Russia has already tested liquid hydrogen passenger jet retrofits, it works.

This will all happen, as easy oil runs out, the alternatives will be cheaper than scraping up the left over oil.

 

Mon, 09/10/2012 - 16:49 | 2779796 Flakmeister
Flakmeister's picture

Funny, not in one of your pie-in-the-sky hopium laced examples did you ever mention the role of oil in modern agriculture...

Your Synthetics blurb is laughable.... considering the amount of research going on to do the exact opposite. .i.e., create chains and not crack them....

Fast chargers for exactly what technology and what price??? It is very doubtful that a non-subsidized EV will ever be less than $25,000 (2012 dollars)....

That being said, electrified freight is a big step in the right direction... I wiil definately give you that....

You should read up on the Law of Receding Horizons....

Mon, 09/10/2012 - 18:26 | 2779924 Element
Element's picture

Despite all your endless greenie nay-saying bullshit and agenda pushing, history and current trends show we have entered into a long-term "energy-transition" phase (these typically took about 70 years--two generations-- to progress in past instances), and price drives product substitution, and their uses.  

As always you ignore that what is 'economic', is an unrestricted variable, and it will always change.  So it's a completely facetious, irrelevant and moronic argument that says something is expensive now, so won't be used.  When we know from endless prior instances that if and when necessary, peoples and whole industries and countries will flock to a once expensive substitute or technology, and the economics and geopolitics of the globe will adjust to the new situation.

The change-over from sail-powered ships to steamers is an example, and I hate to break it to you kiddo, but sail-power (the greenie ideal and 'solution') became uneconomic, as a result of this.  But greenies in response simply want us to believe that there are insurmountable problems to further energy transitions and substitutions.

There are problems, and none of them are ever final or insurmountable.  Only systematic cognitive acts of pure idiocy would lead a person to assume such problems are insurmountable and not worth pursuing.  We'll solve such problems and do it regardless though, no matter what any absurd flock of pontificating tossers crap-on endlessly about.  

This is what really happens during such an energy transition.

Which is why large-scale synthesis of oil and fuel absolutely will take place, as it has in the past, as conditions and the economic imperatives of it enabled it to come into its own.

Yet you just stand there like a braying fool, and deny it that with half-arsed theoretical 'rationales'.

It's rather laughable and more than a little bit pathetic.

The energy economy will not stop due to your internal fantasies--sorry.  

You will die and it will go on.

Try to come to terms with this, and with how reality works.

 

 
BTW;  There's little point getting all grumpy or throwing your toys around at people who love you enough to point this out.  We haven't given up on you mate, hang in there.

Mon, 09/10/2012 - 21:24 | 2780479 Flakmeister
Flakmeister's picture

If your understanding of energy issues and constraints is anything like your analytic abilities when it comes to AGW, I can safely say that we can ignore whatever cornucopian nonsense that you care to share....

In the other energy transitions people knew pretty early on what they were transitioning to.... Maybe I missed the memo about what replaced oil for the basis of our transportation. Could you refresh my memory?

Mon, 09/10/2012 - 21:54 | 2780527 Element
Element's picture

Financial Sense NewsHour

Global Warming: Fact, Fiction or Conspiracy?

Audio interview:

http://www.financialsensenewshour.com/broadcast/fsn2012-0825-3.mp3

Mon, 09/10/2012 - 23:15 | 2780685 Flakmeister
Flakmeister's picture

Now there is an authority.... the Financial Sense Newshour....

Is that really the best you can do?

BTW, avoiding the question, again?

You can have the last word, I am off to bed....

Tue, 09/11/2012 - 00:35 | 2780810 Element
Element's picture

 

 

Now there is an authority.... the Financial Sense Newshour....

Is that really the best you can do?

 

I'm afraid so, it's not much, but it'll just have to do.  But still it is a whole lot more relevant and interesting than the supercillious high-handed pseudo-science bullshit you keep peddling, to try to make everyone feel guilty about something they haven't done. 

Tue, 09/11/2012 - 19:18 | 2783528 Flakmeister
Flakmeister's picture

Here is a new one for you...

Basic statistical analysis:

http://iopscience.iop.org/1748-9326/7/3/034020/pdf/1748-9326_7_3_034020.pdf

Published 9/4/2012....

You really have to avoid sites pandering to Confirmation Bias....

Mon, 09/10/2012 - 09:56 | 2778174 bnbdnb
bnbdnb's picture

MDB, oil is in your lube.

Mon, 09/10/2012 - 09:59 | 2778179 dbomb12
dbomb12's picture

Yes, the Chevy volt sales are doing real well and think about all the non existent wind and solar power plants in the USSA

Reuters 9/10/12

PLANT SHUTDOWN

"The lack of interest in the car has prevented GM from coming close to its early, optimistic sales projections. Discounted leases as low as $199 a month helped propel Volt sales in August to 2,831, pushing year-to-date sales to 13,500, well below the 40,000 cars that GM originally had hoped to sell in 2012"

Mon, 09/10/2012 - 10:35 | 2778308 MillionDollarBogus_
MillionDollarBogus_'s picture

"..Nobody needs oil.."

Right...

So, then, the price will start dropping...???

Right...

Mon, 09/10/2012 - 11:09 | 2778445 gggunchi
gggunchi's picture

As demand falls due to an increase in price, the price should adjust downward to find equilibrum.  However -- given some buffoon in charge of the world's largest military decided to hit CTRL + P a few more hundred billion times . . . the price will definitely rise as its a commodity. 

Mon, 09/10/2012 - 16:51 | 2779801 Flakmeister
Flakmeister's picture

You forgot about whether the new supply at given marginal price of a new barrel falls off faster than demand.... Existing oil fields are declining at roughly a 4% rate p.a.....

Mon, 09/10/2012 - 13:07 | 2778879 LawsofPhysics
LawsofPhysics's picture

Better, but unfortunately the oil market and applications are a bit more complex, and despite the "green" revolution it is still very much an oil economy.

Mon, 09/10/2012 - 09:04 | 2778034 gggunchi
gggunchi's picture

Very real competition?  Are you high?

 

The Germans spend an untold amount of money building out these Windfarms on the north coast.  Wanted to send the electricity to Bavaria.  Oh wait . . . an econ. group filed and injunction to stop the power lines. 

 

And we are talking about California where BILLION$$$$ were spent to build this stupid Windfarm on I-10 between LA and Palm Springs.  Then some stupid environmentalist group found it was killing the birds (so much for darwinism) so it gets shut down 4 days a week. 

 

Biofuels?  Do you have any idea how fucked they are?  First, horrible for most motors, and second gub'ment subsidys fucked up the demand curve for not only corn, but for other veggies that farmers would have planet were it not for your Biofuel. 

 

The Green movement can go fuck itself with a rake. 

Mon, 09/10/2012 - 09:12 | 2778050 GetZeeGold
GetZeeGold's picture

 

 

Are you high?

 

Depends....are you a cop?

 

Mon, 09/10/2012 - 09:15 | 2778057 gggunchi
gggunchi's picture

Yeup, I'm a copper who also day trades . . . because all police are always intelligent (and well paid). 

Mon, 09/10/2012 - 09:28 | 2778095 JPM Hater001
JPM Hater001's picture

"Very real competition?  Are you high?"

On that note if you are can I get an invite?

Mon, 09/10/2012 - 10:02 | 2778185 Haole
Haole's picture

"The Green movement can go fuck itself with a rake."

Oh and it is but elitist-controlled governments love it for it's "eugenic", neo-feudalistic-facing qualities, the "movement" is ignorantly falling right into their trap. 

https://www.youtube.com/watch?v=CZ-4gnNz0vc

 

Mon, 09/10/2012 - 11:02 | 2778426 Oldrepublic
Mon, 09/10/2012 - 11:36 | 2778565 Svendblaaskaeg
Svendblaaskaeg's picture

The Germans spend an untold amount of money building out these Windfarms on the north coast. Wanted to send the electricity to Bavaria. Oh wait . . . an econ. group filed and injunction to stop the power lines.

 

In Germany, Coal is the new Green 

A New Role for Coal in German Energy Revolution

http://www.spiegel.de/international/germany/new-coal-fired-plants-could-...

Mon, 09/10/2012 - 13:17 | 2778919 Clashfan
Clashfan's picture

Double farts!

Mon, 09/10/2012 - 14:02 | 2779144 entropy93
entropy93's picture

Biofuels: Actually biodiesel is better for your engine than modern low sulfur diesel fuel. Better lubrication of the fuel pump and injectors.

 

Mon, 09/10/2012 - 09:09 | 2778042 oldfruit1
oldfruit1's picture

nhot sure if this is one of your dry jokes mdb BUT just incase other readers get confused .. baltic dry index (bdi) is an index composed of rates to ship DRY FREIGHT across various shipping routes. Mostly iron ore/coal/grain. there is massive over capacity in this market, so i would be cautious about using it as a proxy for the global economy, these greek shipping tycoons prefer building new ships (with loads of debt thrown in) to paying tax ;) also iron ore market has dried up although who knows what the chinese will do in terms of infrastructure build.

oldfruit

Mon, 09/10/2012 - 12:16 | 2778699 Bunga Bunga
Bunga Bunga's picture

Chinese are going to build another ghost town and bridges to nowhere ... rinse, repeat. They should rather build bridges in the US.

8000 bridges in the US are structurally deficient or fracture critical:

http://saveourbridges.com/map.html

Mon, 09/10/2012 - 09:15 | 2778055 darteaus
darteaus's picture

"...especially with the very real competition provided by green technologies..."

Sounds like you've been hitting some of that green technology.

Mon, 09/10/2012 - 09:15 | 2778056 Mitch Comestein
Mitch Comestein's picture

Green energy?  Why not mention competition from a real competitor like natural gas....not a bunch of glorified mirror and propellor companies in receivership.

Mon, 09/10/2012 - 09:22 | 2778077 tabasco71
tabasco71's picture

"especially with the very real competition provided by green technologies like wind farms and biofuels."

LOL - one of the funniest I've seen from you

Mon, 09/10/2012 - 10:28 | 2778278 Monk
Monk's picture

Actually, that's bad news across the board as oil production costs have gone up.

 

Mon, 09/10/2012 - 11:08 | 2778441 steve from virginia
steve from virginia's picture

 

I hate to break it but peeps with no money cannot afford high prices. The trend is more people with less money: see 'food stamps'.

 

10 years of increasing real crude prices and expanding consumption have made credit unaffordable as well. Falling price = demand destruction and when demand is gone, it's gone for good.

 

Don't let the asset markets fool you, if market participants can't meet their costs (by selling to the public at break-even or better) they are out of business.

 

Too many ships, not enough customers. A lot of ship owners and ship builders will fail before this round of demand destruction is done.

Mon, 09/10/2012 - 11:41 | 2778579 q99x2
q99x2's picture

Look at the oil price run up to the 2008 collapse. Oil companies always do the raping before the pillage.

Mon, 09/10/2012 - 12:08 | 2778666 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Your conclusion is probably right because we're entering a global recession within this depression.

Your green tech comments are way off though. Very real competition? WHAHAHHAAHA.

Tue, 09/11/2012 - 00:55 | 2780830 Scrilla
Scrilla's picture

Moron. BDI is a dry-bulk commodity freight index, it doesn't have anything to do with oil transportation.

Mon, 09/10/2012 - 08:59 | 2778014 dbomb12
dbomb12's picture

Dont worry, the Romney/Ryan team are here to fix everything. SARC

Mon, 09/10/2012 - 09:09 | 2778037 GetZeeGold
GetZeeGold's picture

 

 

It's worth a shot.

 

Hey.....he fixed the Olympics.....and I don't really even care for the guy.

 

Mon, 09/10/2012 - 10:03 | 2778191 dbomb12
dbomb12's picture

Actually it probably doesn't matter since Obama,s dyke driven homeland security is getting ready to implement martial law before the elections

Mon, 09/10/2012 - 09:11 | 2778048 gggunchi
gggunchi's picture

Can't get any worse than the buffoon who is running the show now. 

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