We haven’t looked at this in some time, here is a look at the Baltic Dry Index:
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click for larger chart
Courtesy of Ron Griess of The Chart Store
While yesterday's US stock market close was poor, Asia and Europe didn't follow today as debt in Greece, Spain, Portugal, etc... rallied, their CDS narrowed and stocks bounced. The Greek finance minister said January tax revenues came in above expectations and that spending was below target for the month and said "that means the deficit reduction for January is well within what we have promised." The euro is rising in turn. Also helping is the story that Trichet is headed to the European Union leaders summit a day early in order to address Greece's problems even as the Greek finance...
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October 12th, 2009 at 12:15 pm
I recommend a look at recent comments on copper inventory. As far the BDI goes, looking forward in light of an unstable USD, how do settlements get worked out. What alternatives are being developed that manage the volumes that the USD used to be assigned. IncaKolaNews has a good post on CU and the LME inventory numbers.
October 12th, 2009 at 12:31 pm
Mainly down since the China commodity stocking in the early part of the year, and inventory rebuild apparently finished in June. Always good to look at real world data rather than listening to the Green Shoots cheerleaders.
Shippers/retail are especially vulnerable in this market.
October 12th, 2009 at 12:37 pm
Investmenttools.com has a regular series of charts correlating the Baltic Dry Index with a number of different indices, including CRB, gold, copper, beans, and, showing perhaps a bearish divergence, the S&P500.
October 12th, 2009 at 12:44 pm
Hard to square this with Mish’s depression scenario.
October 12th, 2009 at 12:49 pm
It ain’t over until the fat lady sings.
October 12th, 2009 at 12:53 pm
The fat lady is sipping margaritas in Acapulco.
October 12th, 2009 at 12:59 pm
Oh Boy Susan Boyle is going to sing for us?
Now that is the green shooties thing I have heard all day.
October 12th, 2009 at 1:49 pm
That has got to be the crappiest chart ever done. The X Axis is “500″. The next line is 1,200, or a delta of 700. The next line is 3,000, or a delta of 1800. The next line is 7,000, or a delta of 4000. The next line is at 16,000, or a delta of 9000!
To look at this chart quickly, visually, you’d think “heck, looks like we’re halfway back to where we were!” but reviewing the numbers you see the 9/24/2009 BDI is 2,163 and the peak in May 2008 was over 11,000.
I learned:
1) we’re 20% of where we were 18-24 months ago
2) we’ll not see those twin peaks (Nov 2007, May 2008) for…a long, long time since they were fueled with the ATMs in our basements, living rooms, spare bedrooms.
October 12th, 2009 at 2:19 pm
@ Kort
I have the same chart. It’s using a log scale. The monthly TLB for Baltic Dry is still trending down. A reversal is a long way off at 9370. See here: http://tinyurl.com/ylkl4jz
October 12th, 2009 at 2:37 pm
so, again, where is the long awaited downturn? all i have seen is up-up-up movement.
October 12th, 2009 at 2:49 pm
BeeDeeEye
http://singerprofitcharts.blogspot.com/2009/10/bdi-baltic-dry-index.html
October 12th, 2009 at 2:57 pm
“so, again, where is the long awaited downturn? all i have seen is up-up-up movement.”
The downturn comes when people realize that the average American is getting screwed again. Oil is back to 73…retirees can’t get any interest on their savings…but Wall Street is booming again. We are selling the dollar down the river for a short term gain. It can’t work on many levels. China won’t allow it anyway.
October 12th, 2009 at 2:59 pm
And a fat lady is going to sing, well that is up-up-up in my book…..Hmmm I wonder if she is going to sing about the indicies?
October 12th, 2009 at 3:08 pm
The Scene: Schadenfreude Asset Management World HQ.
Harry WANGER, genius investor and noted BULL on AMERICA is at his desk. The door opens. LEFTBACK arrives, even later than is his custom, yawns and smiles insouciantly at HARRY, who is watching CNBC, playing with a little JIM CRAMER bobblehead doll, and wearing a RALLY CAP on his head for luck.
“Jeezus, LEFT” exclaims HARRY, “where have you been? You are missing the greatest PROFIT opportunities in a LIFETIME as the MINI-BOOM rolls on and the indices continue to lead”.
“Been at lunch with a client, Harry”, replies LEFTBACK, “Tatiana Getchikitoff, a well-known Russian model and former tennis player. Very worried about the declining dollar. Where did you get that revolting headgear?”
“Quite sensible” replied HARRY, ignoring the jibe, “You should really introduce her to our firm’s leading money manager MYSELF! In any case, I hope you put her in some miners, drillers and metals, Left. As you know, we hold a lot of those in my top-rated fund: Soaring Eagle Leveraged Long-Only Flagship Fund (SELLOFF).”
October 12th, 2009 at 3:10 pm
@Steve
and when is that going to happened? so far i can’t see anything but a positive news all around.
October 12th, 2009 at 3:16 pm
@ZYZY:
Is it positive that the dollar is getting shredded and the deficit and debt are soaring? It is not all positive. Unemployment is 17%.
October 12th, 2009 at 3:19 pm
This is the dog-gone huti-tutiest green shootiest thing I have seen in weeks. Remember back on 12/5/08 how we all thought that world trade (and even the world) was collapsing and the economy would go down with it. Thank you Obama, for saving us all from those unavoidable calamities
October 12th, 2009 at 3:20 pm
Kort
Here, let me google “semi-log axis” for you…
October 12th, 2009 at 3:43 pm
It’s encouraging that we’re back to early 2006 levels and rising.
October 12th, 2009 at 4:03 pm
So does anyone here follow the HARPEX?
http://www.harperpetersen.com/harpex/harpexRH.do?showData=true&period=4&&checkedIndexes=0&floatleft=0&floatright=0&exponleft=0&exponright=0&indicator=0
Interesting.
October 12th, 2009 at 4:05 pm
Most recent report- some interesting data:
http://www.harperpetersen.com/reports/0940-harpexreport.pdf
October 12th, 2009 at 4:24 pm
The WWI is bouncing back tremendously (WANGER WINDBAGGERY INDEX).
October 12th, 2009 at 4:30 pm
@Steve
http://finance.yahoo.com/news/Survey-of-top-economists-find-cnnm-202386183.html?x=0&sec=topStories&pos=1&asset=&ccode=
“Survey of top economists find most believe recession is over”
dow closed highest for the year. etc etc
I not necessary disagree with what you are saying. I just can’t see WHEN the trend will change. and i’ve been waiting since June/July…..
October 12th, 2009 at 4:35 pm
zyzy – That’s laughable. Are you for real? How many of the “top economists” saw this mess coming in the first place?
There is a difference between what the stock market is doing and what’s going on in the real economy. If you can’t see the difference you might want to broaden your evidence gathering.
October 12th, 2009 at 4:40 pm
The recession, you see, is over, so long as you count everything in those nastily-diluted and depreciating dollars. On a real (i.e., non-dollar-printing-government-statistical) basis, the recession, i.e., contraction in American living standards, has only just begun.
October 12th, 2009 at 6:03 pm
ZYZY…. let me explain this to you SLOWLY – in itty bitty words of one or two syllables.
You see, the mainstream economists are sort of a LAGGING INDICATOR. They only MAKE THE CALL when the EVENT is over, so that they CAN’T BE WRONG by being early, then it is at yahoo which NO-ONE READS.
IN other words, my end of the alphabet friend, this kind of tedious after-the-fact announcement from the ink-stained practitioners of the DISMAL SCIENCE is predictive of – nothing. NADA, ZILCH, DIDDLY SQUAT.
Go for a walk and look around, and you might learn a lot more about where we are headed.
October 12th, 2009 at 6:14 pm
This chart is useless.
October 12th, 2009 at 6:55 pm
@Thor and LeftBack:
if i understand you guys correctly, you are all short @ this time?
// why i seemed to never to be able to get a simple answer on my short question?
October 12th, 2009 at 7:27 pm
Mainly short silver now and a few other commodities, b/c I think it is the most insane of the present bubbles.
Equities are an interesting show for the time being. The basic idea is not to be short the dollar at this moment.
All of the various long equity/precious metals/commodity/high yield bond/high yielding currency (AUD,NZD) trades are in essence ONE TRADE – shorting the dollar – here, b/c they are all driven by the liquidity pump operated by the Fed. The trade has been on for a long time and is crowded. It may continue.
The pump has supported the stocks of many bankrupt companies and others with no earnings whatsoever on a mark-to-market GAAP basis. What you think about that is up to you. You can certainly trade it, and I respect that opinion on a day-to-day basis. What you can’t do is invest for the long term – until you understand the macro environment and know the next move of the Fed. I do not believe we are in an overheated or even heating up economy, so I am therefore long the middle of the curve (5-year Treasuries).
October 13th, 2009 at 11:04 am
[...] below is a time series found at Barry Ritholtz’s blog which tracks the cost of moving goods via the [...]
October 13th, 2009 at 1:37 pm
@LeftBack:
“…. What you can’t do is invest for the long term – until you understand the macro environment…”
See , here i have one SMALL problem – ii’m actually losing money @ this time, exactly because im following the mind set that market should be moving down.