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Thread: Baltic Dry Index crash appears underway just like in 2008

  1. #1

    Default Baltic Dry Index crash appears underway just like in 2008

    http://www.zerohedge.com/news/2012-1...ight-most-2008

    It's still heading down, even during xmas season and Year To Date is down 54%. Could be an anomoly but doesn't look good.
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  3. #2

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    Damn... Under 800 today. I didn't think it could crash again from where it is.
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  4. #3
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    Quote Originally Posted by devil21 View Post
    http://www.zerohedge.com/news/2012-1...ight-most-2008

    It's still heading down, even during xmas season and Year To Date is down 54%. Could be an anomoly but doesn't look good.
    I am not sure how this could be an anomly .

  5. #4

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    The shipping fleet is way too big and it keeps growing. Rates are in the toilet and will be for a very long time.

  6. #5

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    http://gcaptain.com/global-shipbuilding-outlook-global/


    This is globalism collapsing. People, we need to be creating local production lines and doing so NOW.

    Hey globalist bankers/politicians, get this through your head - you've lost. You were destined to lose. Now FUCK OFF.
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  7. #6

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    Quote Originally Posted by Seraphim View Post
    http://gcaptain.com/global-shipbuilding-outlook-global/


    This is globalism collapsing. People, we need to be creating local production lines and doing so NOW.

    Hey globalist bankers/politicians, get this through your head - you've lost. You were destined to lose. Now FUCK OFF.
    Yup. And this is one of the silver linings: manufacturing will return to the USA. But the ramp up is going to be a time of pain. Just as an example, I don't think we produce much, if any, textiles. If (when?) textile imports collapse, we are going to be going naked for a few years until we get back up to speed. Textile factories don't go from zero to full speed overnight.
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  8. #7

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    Quote Originally Posted by oyarde View Post
    I am not sure how this could be an anomly .
    Bloomberg's charts of the index show that there have been some hard downward swings in periods since 2008, which did rebound back upwards. So it could just be another cyclical event like before but what got my attention is the large daily drop as reported by ZH and the fact that this downswing is occuring during the xmas season, typically a high shipping volume period. Just something to watch.
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  9. #8

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    Quote Originally Posted by Seraphim View Post
    http://gcaptain.com/global-shipbuilding-outlook-global/


    This is globalism collapsing. People, we need to be creating local production lines and doing so NOW.

    Hey globalist bankers/politicians, get this through your head - you've lost. You were destined to lose. Now FUCK OFF.
    More like there's just way too much supply:


  10. #9

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    Here's part of the problem:

    A large tanker that sold for $137 million in early 2008, the Samho Dream, was repossessed by bankers late last year and sold last week in Hong Kong for just $28.3 million.
    http://www.nytimes.com/2012/01/26/bu...pagewanted=all

    Companies can get away with much lower rates because they're acquiring vessels for pennies on the dollar.

  11. #10

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    The Baltic Dry Index is one of the few, if only, index that can't be manipulated...and it says, loud and clear, in spite all this bullshit about "green shoots," that the global economy is in the toilet...

  12. #11
    Contributing Member Henry Rogue's Avatar
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    Quote Originally Posted by Jordan View Post
    Here's part of the problem:

    A large tanker that sold for $137 million in early 2008, the Samho Dream, was repossessed by bankers late last year and sold last week in Hong Kong for just $28.3 million.

    Companies can get away with much lower rates because they're acquiring vessels for pennies on the dollar.
    Problem? That's called The Market at work. Perhaps obama can start a "Cash For Clunkers" program for ships.
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  13. #12

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    Quote Originally Posted by Jordan View Post
    More like there's just way too much supply:

    Inflation creates malinvestment. When the inflation boom busts, the malinvestment (which is typically in higher-order goods like ships) unwinds. All you are pointing out is some of the unwinding of the inflationary boom. But that unwinding is driven by the fact that the demand that drove the higher order investment was phony to begin with and when it dried up, voila! Too many ships, too many factories, too many employees etc. given the dramatic slowdown in economic activity. If governments would just let the boom unwind, things would stabilize. But they refuse to allow that to happen.
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  14. #13

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    Quote Originally Posted by Jordan View Post
    The shipping fleet is way too big and it keeps growing. Rates are in the toilet and will be for a very long time.
    Exactly this.

  15. #14

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    Quote Originally Posted by Seraphim View Post


    This is globalism collapsing. People, we need to be creating local production lines and doing so NOW.
    This is absolute nonsense. There's no reason whatsoever to believe this to be the case. The cost of moving goods over long distances is falling, not rising. Absent an increase in cost, there's no reason to believe your statement.

  16. #15

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    Quote Originally Posted by KingNothing View Post
    This is absolute nonsense. There's no reason whatsoever to believe this to be the case. The cost of moving goods over long distances is falling, not rising. Absent an increase in cost, there's no reason to believe your statement.
    Americans have been able to buy goods produced on the other side of the planet and shipped to the US only because the world demand for the dollar kept its exchange value so high relative to other world currencies. That day is coming to an end. When the exchange value of the dollar drops, we will be back to making - and repairing- our own products rather than buying disposable products made in China. And that is a good thing.
    The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

    "Who would be free, themselves must strike the blow." - Byron

    "Who overcomes by force, hath overcome but half his foe." - Milton

  17. #16

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    Quote Originally Posted by Acala View Post
    Americans have been able to buy goods produced on the other side of the planet and shipped to the US only because the world demand for the dollar kept its exchange value so high relative to other world currencies. That day is coming to an end. When the exchange value of the dollar drops, we will be back to making - and repairing- our own products rather than buying disposable products made in China. And that is a good thing.
    Yeah, ok. Sure, maybe that will happen. Maybe it will even happen in the near future. It certainly is not happening right now, though. The value of the dollar is not the reason the Index has been this low for a couple years now.

  18. #17

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    What's amazing about the Baltic Dry Index, it's drop of ~11,800 to 766 today. 6.5% of what the costs were 5 years ago. China is the #1 exporter of dry goods... the double digit growth is over due to the global recession and also Chinese induced control policies. What sucks, with all the borrowing and stimulus programs in the trillions around the world, the only factors holding the numbers up are Inflationary policies, not demand.

    Just think of the Nobel Peace Price Laureate Obama's consecutive record breaking of US export in Military Weapons shipments over the past 3 years. This is on top of the US War Machine shipping goods and bodies around the planet... I'd like to see the extrapolated data on BDI for global military sales shipments. You know when the governments ships, the price is always inflated due to their "processes"

    China’s trade disappoints in November as overseas demand drops
    http://www.industryleadersmagazine.com/china’s-trade-disappoints-in-november-as-overseas-demand-drops/

    China’s results in November According to official data, China’s exports climbed almost 2.9% year-on-year, down from the increase of more than 11.5% in the month of October. Customs figures showed that China’s exports did not meet analysts’ estimates of the growth of 9% to 10%. As for China’s imports, they were unchanged on the year, dropping from an expansion of approximately 2.4 percent in October. China’s imports in November were also below median analysts’ projections of an approximately 2.0% increase.


    PS: we have covered this a few times... oversupply is one thing, but the almost collapse of BDI and now, 5 years later, issues more of Depression than the government's so-called 'Great Recession' meme.
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  19. #18

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    Quote Originally Posted by Henry Rogue View Post
    Problem? That's called The Market at work. Perhaps obama can start a "Cash For Clunkers" program for ships.
    No it's not a problem in the economic sense. It's a problem in interpretation. You can't compare the BDI over many years and say it's a perfect way to measure economic expansion and contraction.

  20. #19

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    Your reindustrialization is centered around Nat Gas reserves and gasoline refinement (from crude oil).

    This is the largest flow of dollar strength going forward.

    The second is precious metals.

    The third is textile/appliance/electronic manufactuing. The latter of the 3 will likely remain in Asia; the appliance and textitle industries would be the ones that boom in the USA.

    There is no other choice at this point for the American people. Slash the Federal Government and rebuild America. Literally.

    Your infrastructure is in, now, rapid decay. Obligations by the State to wellfare recipients is roughly 46% of the documented mouthes to feed across the land. Exploding debt...

    YIKES.

    Reindustrialization must occur, the sooner the better.

    Canada as well. It's not as bad as in the USA - but our path must too be altered, ASAP.

    Quote Originally Posted by Acala View Post
    Yup. And this is one of the silver linings: manufacturing will return to the USA. But the ramp up is going to be a time of pain. Just as an example, I don't think we produce much, if any, textiles. If (when?) textile imports collapse, we are going to be going naked for a few years until we get back up to speed. Textile factories don't go from zero to full speed overnight.
    "Like an army falling, one by one by one" - Linkin Park

  21. #20

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    Quote Originally Posted by Seraphim View Post
    Your reindustrialization is centered around Nat Gas reserves and gasoline refinement (from crude oil).

    This is the largest flow of dollar strength going forward.

    The second is precious metals.

    The third is textile/appliance/electronic manufactuing. The latter of the 3 will likely remain in Asia; the appliance and textitle industries would be the ones that boom in the USA.

    There is no other choice at this point for the American people. Slash the Federal Government and rebuild America. Literally.

    Your infrastructure is in, now, rapid decay. Obligations by the State to wellfare recipients is roughly 46% of the documented mouthes to feed across the land. Exploding debt...

    YIKES.

    Reindustrialization must occur, the sooner the better.

    Canada as well. It's not as bad as in the USA - but our path must too be altered, ASAP.
    Yup. A big correction followed by re-industrialization. If we are lucky.
    The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

    "Who would be free, themselves must strike the blow." - Byron

    "Who overcomes by force, hath overcome but half his foe." - Milton

  22. #21
    Member Zippyjuan's Avatar
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    This is from October but could still apply today:
    http://finance.yahoo.com/news/baltic...122000584.html

    Baltic Dry Index Sees Worst Quarter in 14 Years as Oversupply and Low Demand Continues to Plague Industry

    NEW YORK, NY--(Marketwire - Oct 12, 2012) - After an impressive start to the year shipping stocks have struggled as concerns regarding slowing economies in China and Europe have seen iron ore and coal shipments fall. The Guggenheim Shipping ETF (SEA) has fallen 15 percent in the last 6 months, after surging 25 percent in the first quarter. Five Star Equities examines the outlook for companies in the Shipping Industry and provides equity research on Diana Shipping Inc. ( NYSE : DSX ) and Excel Maritime Carriers Ltd. ( NYSE : EXM ).

    The Baltic Dry Index (BDI), a measure of costs to ship dry-bulk commodities such as grain, coal and iron ore, has fallen by 50 percent this year. The BDI recently posted its worst quarter in 14 years as oversupply and weak demand has continued to plague the industry. According to data collected by Bloomberg from the Baltic Exchange, during the third quarter the index's average reading of 848 was the lowest since the third quarter of 1998.

    Numbers from the world's largest shipbroker, Clarkson PLC, have shown that the largest fleet ever is competing for business in the current period, despite slowing demand from China.
    Chart:
    http://www.blacklistednews.com/Balti...38/38/Y/M.html

    Last edited by Zippyjuan; 12-18-2012 at 03:47 PM.
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