Baltic Dry Index Plunges

Surprise! Baltic Dry Index Plunges Most Since November As Commodity Bubble Bursts

Submitted by Tyler Durden on 05/05/2016 11:40 -0400

 

Who could have seen this coming? Remember a week ago when TV entertainers crowed about the surge in The Baltic Dry Freight Index was a "clear signal" that 'China is back' baby and that escape velocity growth was just around the corner as global growth was destined to pick up...

 

Well, just as we warned very explicitly, the ramp in the index merely reflected the frenzied speculation in industrial metals by the Chinese and as authorities have cracked down on that idiocy, so the Baltic Dry has plunged by the most since November... as real demand punches back.

 

 

This was never going to end well.

Average:

International trade sinks with the Baltic Dry Index

By James Hall -

March 9, 2016

Economists and professional investors follow the Baltic Dry Index because it is a leading indicator on the forecast for international trade. A week ago this gauge hit an all time low. Since then a small upturn has moved the index upward slightly. Hellenic Shipping News observes in Baltic Dry Index climbs to 349, up 7.

“Baltic Dry Index is compiled by the London-based Baltic Exchange and covers prices for transported cargo such as coal, grain and iron ore. The index is based on a daily survey of agents all over the world. Baltic Dry hit a temporary peak on May 20, 2008, when the index hit 11,793. The lowest level ever reached was on Wednesday the 10th of February 2016, when the index dropped to 290 points.”

Some financial advisors believe the bottom has taken place. Even if shipping starts to return to levels that keeps the industry profitable, the prospects for a positive trading balance have no prospects to enrich our country.

Read the government’s own Bureau of Economic Analysis just released on March 4, 2016.

“The Department of Commerce, announced today that the goods and services deficit was $45.7 billion in January, up $1.0 billion from $44.7 billion in December, revised.  January exports were $176.5 billion, $3.8 billion less than December exports. January imports were $222.1 billion, $2.8 billion less than December imports.

The January increase in the goods and services deficit reflected an increase in the goods deficit of $1.1 billion to $63.7 billion and an increase in the services surplus of $0.1 billion to $18.0 billion.

Year-over-year, the goods and services deficit increased $2.1 billion, or 4.8 percent, from January 2015. Exports decreased $12.5 billion or 6.6 percent. Imports decreased $10.5 billion or 4.5 percent.”

Now these figures have become routine, but the apologists for the “Free Trade” rip-off have another obstacle that complicates their false promises of beneficial trade practices. China is experiencing a deep contraction in domestic indices activity.  Reuters’ account that China Feb official factory PMI seen shrinking for 7th month, documents that the market for U.S. exports to Red China is collapsing. The net result is obvious.

The Wall Street Journal reports on some ominous news in At U.S. Ports, Exports Are Coming Up Empty. “Major gateways say more ocean containers are shipping out empty, a sign of weak demand in troubled global markets and the tough sell American exporters face abroad.”

This trend has been building for a long time. Zero Hedge publishes an important article, A Third Of All Containers Shipped From Long Beach Port Are Empty, that illustrates the consequences of this one way street of wealth transfer.

“In short: only an economist, either a tenured one or one employed by CNBC, is unable to see that the world is sinking into a global trade recession, with a economic one soon to follow.

Net trade feeds directly into GDP, so the next time an idiot tells you that there are no direct linkages or contagion choke points between China and the US, feel free to take them to the Long Beach and show them the thousands of empty boxes whose contents one can label simply as “recession”.

The reality of this sacred globalist tenant of “interdependence” is that the United States is financing and keeping afloat the cracking Chinese economy. The more America buys from China, the quicker the transfer of money outflow accelerates. Now that US exports are hitting a brick wall, the recession that is ravaging Asia is becoming the next biggest import.

The Baltic Dry Index is a hard standard of measurement to ignore. All the double talk that the financial press can muster will not alter the barren container ships riding high in the water back to pick up more inventories for sale to a suicidal consumer country.

In addition to the Evergreen Marine and Maersk fleet rumbling at half efficiency, the Epic oil glut sparks super tanker ‘traffic jams’ at sea.

“It’s a “super tanker traffic jam,” said Matt Smith, director of commodity research at ClipperData.

Smith first noticed the maritime congestion popping up a month ago off the coast of Singapore. That was alarming because Asia accounts for one-third of global oil demand.

“It was kind of strange to see. The ships didn’t have any buyers,” he said.

And then ClipperData discovered a similar phenomenon off China and even the Arabian Gulf.

“There just appears to be more oil than can be dealt with. They haven’t got anywhere to put it,” said Smith.”

This is definitive evidence that a worldwide recession is already dragging down economic activity. Transferring liquid financial instruments electronically is nothing like moving cargo across the seas. Trade depends upon a market that has demand for products.

It would be folly to believe that reciprocity is not required to maintain an international trading system. This criterion has not been present for many decades. The slowdown in commercial activity between nations offers an opportunity to correct the imbalance that the globalists have forced upon trading practices.

The unmistakable response is to re-industrialize our own domestic capacity. If foreign countries are wallowing in their own domestic economic quagmire, why should America continue buying their wears and keep propping up their balance sheets?

America was once the greatest maritime trading nation. Today, our ports are mere foreign depositories. Off loading has replaced export shipping. What is so difficult to understand?

With the collapse of the Baltic Dry Index, an intelligent and prudent country would reverse course and steer a chart that casts off the odious trade agreements that have systemically dismantled our domestic capacity and has destroyed our independent economic nation.

This point alone, explains the fear within the globalist community that is reflected in the most disgusting assault on the Trump movement in the 2016 election campaign. Cries to devalue the U.S. Dollar even more is no resolution. Such measures only play into the hands of the betrayers of a viable American economy.

Via BATR

http://subterrnews.blogspot.com/2016/03/international-trade-sinks-with-baltic.html

Baltic Dry Index

+ Watchlist

BDIY:IND

298.00

5.00

1.65%

Gloomy omen for 2016: Baltic Dry, a measure of shipping rates for everything from coal to ore, fell to historic low.

Submitted by IWB, on December 30th, 2015

 

Holger Zschaepitz‏@Schuldensuehner 14h14 hours ago

Gloomy omen for 2016: Baltic Dry, a measure of shipping rates for everything from coal to ore, fell to historic low. pic.twitter.com/UxmaVjuuJc

• Retweets 43
• Likes 23

It’s Official: The Baltic Dry Index Has Crashed To Its Lowest November Level In History

Friday, November 6, 2015 13:05

 

2015 has been an 'odd' year. Typically this time of year sees demand picking up amid holiday inventory stacking and measures of global trade such as The Baltic Dry Index rise from mid-summer to Thanksgiving. This year, it has not.

 

In fact, it has plummeted as the world's economic engines slow and reality under the covers of global stock markets suggests a massive deflationary wave (following a massive mal-investment boom). At a level of 631, this is the lowest cost for Baltic Dry Freight Index for this time of year in history.. and within a small drop of an all-time historical low.

Hard to ignore something that has never happened before as anything but a total disaster for world trade and economic growth.
* * *
As we concluded previously after exposing the collapse in Ships…



Trains…

And Trucks…

We have in the past joked that the only thing that could possibly save the world from what is a trade recession is if the central banks can somehow find a way to “print trade” the way they artificially boost asset prices higher to give the impression of a status quo normalcy. Unfortunately, as this is not a real option, and with both global and US trade in freefall, many wonder just how will the world's central planners mask this most dangerous aspect of the global economic slowdown?

Charts: Bloomberg

 

 

Baltic Dry 'Bounce' Is Dead - Freight Index Lowest In 29 Years For Time Of Year

Submitted by Tyler Durden on 10/12/2015 15:05 -0400

 

Since the mid-July peak, when Jim Cramer warned the market's "last shred of hope was the freight index holding up," The Baltic Dry Index has been in free fall (at a time with very positive technicals). In fact, today's drop to 809 is the lowest in over 3 months and the lowest for this time of year since 1986!!


Even as stocks have soared in the last 10 days, The Baltic Dry shows no signs of a pick up in freight traffic demand, instead quite the opposite.


Charts: Bloomberg

IN ALL THIS MARKET CHAOS, NO ONE NOTICED THE BALTIC DRY INDEX LOST 97% OF ITS BASE

Submitted by IWB, on August 26th, 2015

That’s right 97% of baltic dry index wiped out !!!!!
This spells dooom on the scale of “knowing”
Tthe market should be tanking dow down over -1000 points right now because of this one factor!!!!!
Laws of physics!

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

“Most directly, the index measures the demand for shipping capacity versus the supply of dry bulk carriers. The demand for shipping varies with the amount of cargo that is being traded or moved in various markets (supply and demand)……The index indirectly measures global supply and demand for the commodities shipped aboard dry bulk carriers, such as building materials, coal, metallic ores, and grains…….The BDI is termed a leading economic indicator because it predicts future economic activity.”
https://en.wikipedia.org/wiki/Baltic_Dry_Index

from Anadolu Agency:

World trade drops to lowest level in six years
Global trade has contracted to the lowest levels seen since the 2008 financial crisis, according to a report released Aug. 26 by the World Trade Monitor.
Trade momentum was minus 0.5 percent in June, and minus 1.6 percent in May. Import momentum was negative or zero in all major regions.
Export momentum was positive in advanced economies, but negative in emerging economies, though rising fast from the previous month, the report said.
Momentum is the preferred index of trade levels, according to the research.
This puts global trade at the lowest levels seen in six years. “It’s a bloodbath,” commented the Center for Research on Globalization in a note published on Aug. 24.
The poor trade performance was confirmed by a plunge in the Baltic Dry Index, the benchmark for global freight carriage. The index dropped to 994 points in August, about 100 percent lower than its reading in May 2008.
The Bloomberg Commodity Index dropped to a 16-year low on Aug. 24, down 17.7 percent so far this year. Crude oil has seen an eight-week decline, the longest in 29 years. West Texas Intermediate dropped to below $40 per barrel on Aug. 21 for the first time since 2009.
Overcapacity in freight has pushed rates for carriage down almost 60 percent in three weeks, the center said. “It’s the worst drop in global trade since Lehman,” the note added, referring to the global financial rout that hit world markets after investment bank Lehman Brothers went bankrupt in 2008.

Note:  Yet MSM still speaks of "the recovery".