Baltic Dry Index, World Shipping Index, at all-time historical low

[St. Phatty]

If you are interested in "the news", economic reporting, world affairs, etc., you might be interested in the Baltic Dry Index.

It was up around 10,000 in 2007/2008.

Most recently it was 345.

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


It is a measure of "Cargo Ship" type world trade. Also, it is a measure of shipping revenues - so when the economy heats up, shipping rates rise, and overall shipping revenues go up that much more.

It was started in '85-'86 at a level of 1000.

It's like a Dow index, for world trade.

"The Baltic Dry Index (replaces the Baltic Freight Index): A composite of the Baltic Capesize, Panamax, Handysize and Supramax indices. The index is designed as the successor to the Baltic Freight Index and was first published on January 4 1985 at 1000 points."


There's less world trade now than 31 years ago, before the bulk of American manufacturing was sent offshore. I remember people saying that "globalization" would be good for world-trade.

Maybe globalization was itself good for world-trade, but something isn't good for world trade.


My reading on this particular indicator is that it is similar to the EKG (electro-cardiogram) monitors they put on patients in the hospital.

When activity falls 80% or 96% (depending on how you measure) it's generally considered a cause for concern. It's usually a sign that the patient is dying, or perhaps their body has completely relaxed because they have achieved Satori ... or the Kush is kicking in


Anyway, world trade has fallen that much - but not a peep out of the US mainstream media.

 

[_tessarecting]

Very interesting---any theories as to what this could mean? Is there a graph that illustrates the fluctuations?

 

[igrowone]

interesting stuff, kind of hard to match it with the economies i see
i'm no fanboy of the current system
but is there an implication that world economies have contracted 30 fold in the last 10 years?
this doesn't jibe that well

 

[St. Phatty]

Very interesting---any theories as to what this could mean? Is there a graph that illustrates the fluctuations?

What it means = manufacturing recession/ contraction/ depression.

that's a 5 year graph, back to 2011.

There's longer term graphs available, but most of them tend to be 'live' images - not something I can embed here.


The manufacturing recession was reported on widely in November 2015 - but not deeply. i.e. most news editors did not give it headline status, which relates to the terms "MOPE" - Management of Perceptions Economics.

http://www.zerohedge.com/news/2015-...as-fed-manufacturing-contracts-11th-month-row

 

[igrowone]

this has to be one of the inputs the Federal Reserve looks at
among 1000's of others
but i guess i can see why the 0% for savings has stayed where it has

 

[blueberrydrumz]

very interesting yes!
by the looks of things its staying on the downward slope...
do you believe in the big crash that has been forseen for this year?
this would back that hypothesis

 

[ronbo51]

Yeah, world trade has pretty much collapsed as we march backwards in time. The number of people working is at 1978 levels. It is acknowledged that 100 million people who could/should be working are not. Subtract the fake numbers ( you probably don't know, but the last "jobs" report that proclaimed the US had created 298,000 jobs in December, the actual real number of jobs created was really 11,000, but they "adjusted" the number up to almost 300K because, well, they wanted to) and the real unemployment rate could be as high as 20-30%. The big boys have decided that the stock market is where they will make their final stand and every day they throw everything they've got at it in an attempt to keep the facade of normalcy afloat. What they have done is lowered interest rates to zero for corporations and banks. The corps borrow and use the money not to build new plants or buy more inventory but to buy back shares of their own stock. This decreases the number of shares and makes the earnings per share (EPS) appear greater, hence stock prices rise, even as corporations sales, profits and cash flow disappear as the economy spirals into oblivion. People will be shocked to see how many of these well known companies and brands will fall into bankruptcy and stiff shareholders and bondholders when the plates stop spinning. The amount of debt as individuals, as corporations, and governments has exploded from the last financial crisis. The too big to fail banks are bigger. The low price of oil has sent shockwaves through finance as trillions in oil extraction debt is rippling upwards from the oil patch to Wall Street, bloodying hedge funds, sovereign wealth funds, and governments across the globe. Massive currency devaluations are occurring as countries struggle to repay debt, buy food, energy, and keep their citizens from seeing the horror that awaits in a deflationary depression just now gaining momentum. There is 1 trillion in student loan debt, 1 trillion in subprime auto debt, many trillions in corporate debt, a new housing bubble of several trillion, and of course the big kahuna of 20 trillion(officially) of US sovereign debt. And pretty much every country in the world is hopelessly mired up to their eyeballs in debt. And almost all of this debt will never be repayed, which is fine, except that every dollar of that debt is represented in peoples retirement accounts, pensions, and 401K's and when it becomes "non-performing" then writedowns will occur, and losses will be registered. I haven't even mentioned China, the heart of darkness, where perhaps 30 trillion in fake demand propped up commodity and all other prices and gave the illusion that since the last crash things have become stable. They have not.

 

[igrowone]

trying to relate this to things that are visible to me
in the USA, one of the big trade deficit makers was the importing of japanese cars
but as political pressure built, japanese car makers moved operations to the USA
voila, japanese cars made in the USA
i'd think this would be a transportation index reduction, could be a large one
is it all negative? no, not all negative

 

[resinryder]

I'm not worried about it. Obama said just a few days ago that the economy is strong. He wouldn't lie about a thing like that,, would he?

 

[floralheart]

I'm not worried about it. Obama said just a few days ago that the economy is strong. He wouldn't lie about a thing like that,, would he?

No. He's under oath and it's on TV.

 

[stoned-trout]

does that mean we wont be getting as much Chinese crap goods?????yeehaw

 

[St. Phatty]

does that mean we wont be getting as much Chinese crap goods?????yeehaw

i like Harbor Freight

 

[stoned-trout]

I use harbor freight but always get the warranty....yeehaw

 

[barnyard]

Getting parts for the Alfa Romeo has always been a challenge. The inventory to sales ratio is spiking just like in 2008.