Spot rates for transporting containers from Asia to Northern Europe have crashed a stunning 70% in the last 3 weeks alone. This almost unprecedented divergence from seasonality has only occurred at this scale once before 2008!
I was absolutely stunned to learn that the Baltic Dry Shipping Index had plummeted to a new all-time record low of 504 at one point on Thursday. I have written a number of articles lately about the dramatic slowdown in global trade, but I didn’t realize that things had gotten quite this bad already. Not even during the darkest moments of the last financial crisis did the Baltic Dry Shipping Index drop this low. Something doesn’t seem to be adding up, because the mainstream media keeps telling us that the global economy is doing just fine. In fact, the Federal Reserve is so confident in our “economic recovery” that they are getting ready to raise interest rates. Of course the truth is that there is no “economic recovery” on the horizon. In fact, as I wrote about yesterday, there are signs all around us that are indicating that we are heading directly into another major economic crisis. This staggering decline of the Baltic Dry Shipping Index is just another confirmation of what is directly ahead of us. Continue reading »
The Baltic Dry Index staged a recovery mid-year, hopefully rising amid promises of stability in China and an ‘escape’ velocity USA. All that centrally-planned hope and hype faith has been eviscerated on the altar of economic reality. With no ability to directly manipulate the Baltic Dry Index to ‘pretend’ everything is awesome, it remains among the best ‘real’ indicators of the state of the global economy… and it’s in the toilet…
From hope to nope…
The Batlc Dry nears all-time record lows once again…
In fact, for this time of year, it has never been lower… Continue reading »
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.
* * *
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!!
– Something Just Snapped: Container Freight Rates From Asia To Europe Crash 23% In One Week (ZeroHedge, Aug 2, 2015):
One of the few silver linings surrounding the hard-landing Chinese economy in recent weeks has been the surprising resilience and strength of the Baltic Dry Index: even as Chinese commodity demand has cratered in 2015, this “index” has more than doubled in the past few months from all time lows, and at last check was hovering just over 1,100.
Many were wondering how it was possible that with accelerating deterioration across all Chinese asset classes, not to mention the bursting of various asset bubbles, could global shippers demand increasingly higher freight rates, an indication of either a tight transportation market or a jump in commodity demand, neither of which seemed credible.
We may have the answer. Continue reading »
– One Last Look At The Real Economy Before It Implodes – Part 1 (ALT-MARKET, March 4, 2015):
We are only two months into 2015, and it has already proven to be the most volatile year for the economic environment since 2008-2009. We have seen oil markets collapsing by about 50 percent in the span of a few months (just as the Federal Reserve announced the end of QE3, indicating fiat money was used to hide falling demand), the Baltic Dry Index losing 30 percent since the beginning of the year, the Swiss currency surprise, the Greeks threatening EU exit (and now Greek citizens threatening violent protests with the new four-month can-kicking deal), and the effects of the nine-month-long West Coast port strike not yet quantified. This is not just a fleeting expression of a negative first quarter; it is a sign of things to come.
Stock markets are, of course, once again at all-time highs after a shaky start, despite nearly every single fundamental indicator flashing red. But as Zero Hedge recently pointed out in its article on artificial juicing of equities by corporations using massive stock buybacks, this is not going to last much longer, simply because the debt companies are generating is outpacing their ability to prop up the markets. Continue reading »
– 14 Signs That Most Americans Are Flat Broke And Totally Unprepared For The Coming Economic Crisis (Economic Collapse, Feb 23, 2015):
When the coming economic crisis strikes, more than half the country is going to be financially wiped out within weeks. At this point, more than 60 percent of all Americans are living paycheck to paycheck, and a whopping 24 percent of the country has more credit card debt than emergency savings. One of the primary principles that any of these “financial experts” that you see on television will teach you is to have a cushion to fall back on. At the very least, you never know when unexpected expenses like major car repairs or medical bills will come along.
And in the event of a major economic collapse, if you do not have any financial cushion at all you will be a sitting duck. Yes, I know that there are millions upon millions of families out there that are just trying to scrape by from month to month at this point. I hear from people that are deeply struggling in this economy all the time. So I don’t blame them for not being able to save lots of money. But if you are in a position to build up an emergency fund, you need to do so. We have been experiencing an extended period of relative economic stability, but it will not last. In fact, the time for getting prepared for the next great economic downturn is rapidly running out, and most Americans are not ready for it at all.
The following are 14 signs that most Americans are flat broke and totally unprepared for the coming economic crisis: Continue reading »
– Record Low Baltic Dry Casualties Emerge: Third Dry-Bulk Shipper Files For Bankruptcy In Past 3 Weeks (ZeroHedge, Feb 23, 2015):
The unintended consequences of a money-printed, credit-fueled, mal-investment-boom in commodities (prices – as opposed to physical demand per se) and the downstream signals that sent to any and all industries are starting to bite. The Baltic Dry Index has plunged once again to new record lows and the collapse of the non-financialized ‘clean’ indicator of the imbalances between global trade demand and freight transport supply has the real-world effects are starting to be felt, as Reuters reports the third dry-bulk shipper this month has filed for bankruptcy… in what shippers call “the worst market conditions since the ’80s.”
Spot the credit-based mal-investment boom
After 2 brief days of very marginal gains, The Baltic Dry Index dropped again…
A third dry cargo shipper has filed for bankruptcy this month following a collapse in freight rates to historic lows in what shippers call the worst market conditions since the 1980s. Continue reading »
– China’s COSCO Dis-Assembles 8 Ships Amid Glut As Baltic Dry Hits Another Record Low (ZeroHedge, Feb 16, 2015):
You know things are bad in the ship-building business when… amid considerably larger than expected losses, China’s COSCO announced that it has dis-assembled 8 vessels in January alone (including 3 bulk carriers) and will be decommissioning and disposing of them as it awaits a “more conducive” environment. It appears that is not coming anytime soon, as The Baltic Dry Index just hit 522 – a new all-time low (down a stunning 53 of the last 55 days).
As COSCO explains in its HKSE Statement:
The board of directors (the “Board”) of the Company wishes to inform the shareholders of the Company (the “Shareholders”) and potential investors that the Group had disassembled eight vessels (collectively, the “Vessels”), including five container vessels (Hutuo He, Xinhui He, Zhaoqing He, Yangjiang He and Yongding He) and three bulk carriers (Peng Jie, Peng Nian and Peng Cai) from 1 January 2015 to 31 January 2015. Continue reading »
– World’s Largest Shipbuilder Reports $3 Billion Loss As Baltic Dry Index Hits New Record-er Low (ZeroHedge, Feb 13, 2015):
“Some Shipping Folks Are Sinking…” South Korea’s Hyundai Heavy Industries, the world’s largest shipbuilder, has reported operating loss of KRW 3.25 trillion in 2014, or about USD $2.96 billion. The operating loss in 2014 is compared to a profit of KRW 802 billion in 2013. At 530, The Baltic Dry Index is at fresh record-erer lows…
– The World’s Best Known Global Shipping Index has Crashed To Its Lowest Level Ever (ZeroHedge, Feb 9, 2015):
Having fallen for 47 of the last 51 days, The Baltic Dry Index (tracking the cost of shipping dry bulk from iron ore to grains) has been collapsing in a well-documented manner by Zero Hedge (though not the mainstream media). With Cramer having told investors of its importance previously, it will be hard to ignore the fact that, as of this morning, the index of global shipping costs has never (ever) been lower at 554. We leave it to readers to decide what they think this means (but we already know what it means for shippers and ship-building companies).
On the back of the total collapse in Chinese imports and exports, is this any surprise?
– The Baltic Dry Index Has Only Been Lower Than This 8 Days In 30 Years (ZeroHedge, Feb 6, 2015):
At 559, The Baltic Dry Index (having now dropped 46 of the last 50 days and 12 days in a row) is just 5 points above its all-time record low from 1986. In fact, the global freight index has only been lower for 8 days during the July/August period of 1986 in its 30 year history…
We are sure this is nothing to worry about and merely “transitory.”
– Bulk Shipping Bankruptices Begin As Baltic Dry Collapse Continues (ZeroHedge, Feb 5, 2015):
With one of the world’s leading dry bulk shipping companies, Copenhagen-based D/S Norden, having made huge losses for the last 2 years and expected to report dramatic losses in 2014 also, it is hardly surprising that the smaller bulk shipping firms are struggling as The Baltic Dry Index collapses ever closer to record all-time lows. As Reuters reports, privately-owned shipping company Copenship has filed for bankruptcy in Copenhagen after losses in the dry bulk market, with the CEO exclaiming, “we have reached a point where there is not more to do.” We suspect, given the crash in shipping fees, that this is the first of many…
On Thursday the index stood at 564, close to the historic low level of 554 set in July 1986.
Privately-owned shipping company Copenship has filed for bankruptcy in Copenhagen after losses in the dry bulk market, its Chief Executive Michael Fenger told Reuters. Continue reading »
– Baltic Dry Down 90% Of Days Since Cramer “Stressed Its Importance”; Crashes To New 29-Year Low (ZeroHedge, Feb 4, 2015):
And the collapse just keeps going… since Thanksgiving, The Baltic Dry has fallen on 43 or the 47 days, down over 60% from the “China growth is back and all-is-well” hope-filled days of late October (when Jim Cramer “stressed the importance of watching the Baltic Dry Freight Index,” as his bullish thesis confirmation). At 569, The Baltic Dry is inching ever closer to what will be the lowest level ever (554 on 7/31/1986) for the global shipping cost indicator…
One or two more days like this and it will be the all-time low…
– Baltic Dry Plunges At Fastest Pace Since Lehman, Hits New 29 Year Low (ZeroHedge, Feb 2, 2015):
The Baltic Dry Index dropped another 3% today to 590 – its first time below 600 since 1986 and not far from the all-time record low of 554 in July 1986. Of course, the absolute level is shrugged off by the over-supply-ists and the ‘well fuel prices are down’-ists but the velocity of collapse (now over 60% in the last 3 months) suggests this far more than some ‘blip’ discrepancy between supply and demand – this is a structural convergence of massive mal-investment meets economic reality.
The Baltic Dry Index drops even more… new 29 year lows…
The fastest 3-month plunge since Lehman…
Over-supply… Continue reading »
– WTF Chart Of The Day: Baltic Dry Index Crashes To Lowest In 29 Years (ZeroHedge, Jan 29, 2015):
Quietly behind the scenes – and not at all reflective of a collapsing global economy (because that would break the narrative of over-supply and pent-up demand) – The Baltic Dry Index plunged over 5% today to 632… That is the lowest absolute level for the global shipping rates indicator since August 1986…
– The Baltic Dry Index Has Never Crashed This Fast Post-Thanksgiving (ZeroHedge, Dec 19, 2014):
We are sure it’s nothing – since stock markets in China and The US are soaring – but deep, deep down in the heart of the real economies, there is a problem. The Baltic Dry Index has fallen for 21 straight days, tumbling around 40% since Thanksgiving Day.
This is the biggest collapse in the ‘trade’ indicator (which we should ignore unless it is rising) since records began 28 years ago… Continue reading »
– The Baltic Dry Index Collapses To 18-Month Lows; Worst July Since 1986 (ZeroHedge, July 22, 2014):
The bulls will ignore it, shrugging that it’s merely over-supply of ships that the resurgent world economy will quickly soak up as it ‘recovers’… However, World GDP growth expectations are collapsing, trade volumes are slowing, and the Baltic Dry Index has continued to slump to its lowest since the start of January 2013 (a holiday period). For some context, this is the lowest July level for the Baltic Dry since 1986… “noise”
and then there’s this…
Which is the worst July level for the global shipping index since 1986… Continue reading »
– The Baltic Dry Index Is Having Its Worst Year Ever (ZeroHedge, June 13, 2014):
At 906, the Baltic Dry Index slumped to 12-month lows showing absolutely no signs whatsoever of the Q2 renaissance in global growth that has been heralded by all the highly-paid meteoroconomists.
In fact, thanks to increasing fears over China’s commodity financing ponzi scheme, this is the worst year for the Baltic Dry on record. Continue reading »
– Here’s Why The Baltic Dry Index Is Collapsing (In 1 Image) (ZeroHedge, May 14, 2014):
If ever there was a better indication of the mal-investment boom created by an interfering Fed, this is it. As demand for shipping collapses on real slowing in the global economy – markets have “told” shipbuilders to “build it and they will come”… here is a ship-shipping ship, shipping shipping ships…
– Baltic Dry Drops For 15th Day To Lowest In 9 Months (Back Below $1000) (ZeroHedge, April 14, 2014):
And still the mainstream media’s discussion of the collapse in the Baltic Dry shipping index is entirely absent. As we have been pointing out for weeks now, something extreme is occurring in the cost of shipping dry bulk around the world. 2014 is now witnessing the biggest drop in price (a typical seasonal pattern) to start the year since records began. Today’s drop to $989 (the first time below $1000 since June 2013) is the 15th drop in a row and it’s not just this index that is fading: Capesize, Panamax, and Supramax rates are all falling. As we noted previously, the shipbuilding industry is already feeling the pain.
The Baltic Dry is down 14 days in a row at $1002 – its lowest in 8 months (and worst start to a year on record)
– Shipbuilding Orders Evaporate As Baltic Dry Collapses (Zerohedge, April 11, 2014):
The silence is deafening still about the ongoing collapse in the Baltic Dry Index among mainstream media types (as it just might challenge the hope/hype that growth is coming back). At the dismal level of 1002, BDIY is at 8-month lows and has fallen 14 days in a row… but now it is having a real world impact. As Sea News reports, Korean shipping companies are failing to place orders for large vessels and anxiety over the future is forcing some local companies to dispose of their assets despite the relatively low shipbuilding costs as of late. Continue reading »
Prepare for the greatest financial/economic collapse in (known) world history.
– Baltic Dry Collapses To Worst Start To A Year On Record (ZeroHedge, April 9, 2014):
If you listen very carefully, you will still hear absolutely nothing from any talking-heads of the utter collapse that the last few weeks have witnessed in the Baltic Dry shipping index. The Baltic Dry has dropped 12 days in a row and plunged back to $1061 – its lowest since August 2013. This is the worst start to a year on record… must be the weather.
The Baltic Dry has dropped 12 days in a row and is now back to its lowest levels since August 2013… and almost post-crisis lows…
Which is the worst start to a year since records began 30 years ago…
The last time we saw a year start like this was 2012 which saw massive concerted co-ordinated central bank easing in Q3 to save us all… it seems that is not coming anytime soon this time…
– Baltic Dry Drops 9th Day In A Row; Worst Q1 In Over 10 Years (Zerohedge, April 5, 2014):
For a few weeks there, as the Baltic Dry Index rose, talking-heads were ignominous in their praise of the shipping index as a leading indicator of an awesome future ahead for the world economy. The last 9 days have smashed that ‘hope’ to smithereens (and yet the talking-heads have gone awkwardly silent, having moved on to some other bias-confirming meme). The Baltic Dry is down 25% in the last 2 weeks, back near post-crisis lows, and has just suffered the worst start to a year in over a decade. But apart from that, seems global trade is all-good and about to take off any minute now…
The worst start to a year in over a decade… Continue reading »
– Baltic Dry Plunges 8%, Near Most In 6 Years As Iron Ore At Chinese Ports Hits All Time High (ZeroHedge, March 12, 2014):
It would appear record inventories of Iron ore and plunging prices due to China’s shadow-banking unwind have started to weigh on the all-too-important-when-it-is-going-up-but-let’s-blame-supply-when-dropping Baltic Dry Index. With the worst start to a year in over a decade, the recent recovery in prices provided faint hope that the worst of the global trade collapse was over… however, today’s 8% plunge – on par with the biggest drops in the last 6 years – suggests things are far from self-sustaining. Still think we are insulated from the arcane China shadow-banking system, which suddenly everyone is an expert of suddenly? Think again. Continue reading »
– Baltic Dry Index Collapses 50% From December Highs To 5-Month Lows (ZeroHedge, Jan 30, 2014)
We are sure it’s just a storm in a teacup; just a brief interlude before the IMF’s ever-changing forecast for global trade growth picks right back up again and demand to ship dry goods surges back to the inventory stuffed levels of Q4. But, for now, the Baltic Dry Index (admired when it’s rising, ignored when it drops) has collapsed by over 50% from its December highs and is back to August lows.
Prepare for collapse.
– Baltic Dry Index Collapses 39% In 9 Trading Days (ZeroHedge, Jan 15, 2014):
The Baltic Dry Index, a measure of commodity-shipping rates, has collapsed 39% in just the nine trading days of 2014. It has fallen from 2277 at the end of December 2013 to 1370 today. This key indicator of global economic health is a warning signal for the global economy in 2014.
Marc Faber told Bloomberg TV in an interview that, “I prefer physical gold and silver, platinum to bitcoin. How do you value a bitcoin? I can value gold to some extent and compare say gold to the quantity of money that is floating around the world, to the wealth increase, and to the monetary base increase, to the credit increase, and so forth and so on, and to the production costs. So I have an idea of where gold should be.”
A diversified precious metals portfolio with allocations to gold, silver, platinum and palladium remains prudent.
– Baltic Dry Continues Collapse – Worst Slide Since Financial Crisis (ZeroHedge, Jan 14, 2014):
Despite ‘blaming’ the drop in the cost of dry bulk shipping on Colombian coal restrictions, it seems increasingly clear that the 40% collapse in the Baltic Dry Index since the start of the year is more than just that. While this is the worst start to a year in over 30 years, the scale of this meltdown is only matched by the total devastation that occurred in Q3 2008. Of course, the mainstream media will continue to ignore this dour index until it decides to rise once again, but for now, 9 days in a row of plunging prices is yet another canary in the global trade coalmine and suggests what inventory stacking that occurred in Q3/4 2013 is anything but sustained.
Baltic Dry costs are the lowest in 4 months, down 40% for the start of the year, and the worst start to a year in over 30 years…
As we noted yesterday…
Of course, we are sure the ‘lead’ that the Baltic Dry seems to have over global macro will be quickly ignored…