Baltic Dry Index Falls 93%

Vaughn sent me some really interesting links. Something called the Baltic Dry Index is showing stupendously staggering losses of 93%. But what is it?

It’s the index of cargo shipments of raw goods from around the world.

The Baltic Dry Index which is a direct indicator of the health of vital worldwide shipping and supply activity as well as the potential health of the global economy has recently slipped more than 93%. Its value has gone from over 11,000 to less than 800 with little except for a floor of zero to suggest the slide will stop in the near future. This means that worldwide, the demand for cargo ships and more importantly raw materials that go into producing the everyday items that consumers buy has come to a near standstill. This is an indicator of a massive worldwide slump and likely foreshadows more economic woes for not only the US, but also the entire globe.

To understand the Baltic Dry index one has to approach this economic telltale from multiple angles. Basically, the index is set where the supply of raw materials meets the demand for ships to be booked to carry those materials from country to country or continent to continent. The index is broken down into different segments that take into account the size of the ship and the type of the cargo that is being shipped.

On page two, you’ll read:

Another interesting point about the BDI is that is not currently a tradable exchange and can therefore not be manipulated by speculators and short-sellers. This means that it is fairly well insulated against inaccuracy and can be used as an excellent barometer of actual market conditions.

Well worth reading — and pondering what this is going to mean in the months and years ahead. Many more links from Vaughn on this:

It’s not a terribly exciting subject, but the question needs to be asked:

Still thinking that things won’t get worse or that materials required to make things won’t become even more scarce or perhaps even the food you eat will still be there on the store shelves in the coming months?

Think again.

Baltic Dry Index Falls 93% (December 1)

‘Are We Heading into a Global Recession or Possibly a Worldwide Depression?’

“The Baltic Dry Index which is a direct indicator of the health of vital worldwide shipping and supply activity as well as the potential health of the global economy has recently slipped more than 93%. Its value has gone from over 11,000 to less than 800 with little except for a floor of zero to suggest the slide will stop in the near future. This means that worldwide, the demand for cargo ships and more importantly raw materials that go into producing the everyday items that consumers buy has come to a near standstill. This is an indicator of a massive worldwide slump and likely foreshadows more economic woes for not only the US, but also the entire globe.”

http://www.associatedcontent.com/article/1258270/baltic_dry_index_falls_93.html?cat=3

Shipping crisis as global economy slows down

“As a result there has been a collapse in the Baltic Dry Index, which tracks the cost of chartering ships to shift raw materials such as iron ore, coal and grains. Since June the index has fallen by more than 90 per cent.”

http://www.telegraph.co.uk/news/uknews/3550715/Shipping-crisis-as-global-economy-slows-down.html

I’ve often been accused of being ‘unbelievably doom’, and this blog (and the author) has been called ‘wacked out’ by quite a few, but there has always been solid data to back up my claims. I’m seeing what most are simply refusing to see. Another reader wrote me privately and said:

I will never understand why nobody sees all these dynamics. I am dead certain we are accurate in our thinking. It is stunning to see the level of denial at both the active and implied level.

I’ve reached the point where I simply do not care at all what other people think. I don’t even care if they buy food from me, I really don’t. I don’t care about much of anything else anymore except getting ready as fast as I can for collapse, which I’m absolutely certain is going to happen very soon, ALL the indicators are flashing red, over and over again.

2009 is shaping up to be horrific. The slack in the system will be all used up and we’ll be looking at deaths door all over the world. You cannot shut down the global system without this being the actual outcome.

My ‘prediction’ as it will be called, rightly or wrongly, is we have very few months left, and that’s all. I am not expecting a magical rescue from any avenue, no pie in the sky, no politician, nothing. We are on our own, we’ve always been on our own.

More from Vaughn, definitely related:

There are alarm bells ringing where the global economy is concerned….

FPSO owners sell tankers at discount prices as credit dries up

“A SLUMP in credit availability is causing a fire-sale of tankers by owners of oil production ships.

One owner has already sold two tankers for drop-down prices of around $10m each and another two are up for sale.

Brokers said more idle tankers owned by floating production storage and offloading vessels operators will go up for auction in 2009 as contractors are squeezed by the lack of credit, rising costs and falling demand.”

Maersk Line to lay-up eight boxships

“The eight vessels, all of the CV 65 class, will be laid-up this month, predominantly in Asia, and remain mothballed until May and June of next year.”

– snip –

“Other major liner operators, such as Neptune Orient Lines, have also started to lay up vessels, while brokers estimate that more than 100 containerships with a combined capacity of 270,000 teu are currently inactive.”

CIMC suspends dry container production

“CHINA International Marine Containers. the world’s largest marine container maker, has brought forward its year-end holiday and suspended the production of dry marine containers due to exceptionally slow demand.”

Cancellation rate at German yards nears 25% (subscription – part story)

Cosco Dalian agrees to axe bulker orders (subscription – part story)

Vale axes 1,300 jobs in bid to slash production by 10%

“VALE, the world’s largest iron ore exporter, has axed 1,300 jobs as part of measures to reduce production in its core business by 10%.”

No one needs steel? Holy crap.

Stumbled on this and had to laugh….

4-Star Stocks Poised to Pop: Genco Shipping

This article is written by complete morons who obviously don’t do their homework. Forget that fact that shipping itself is seeing a severe downturn and that Genco has cancelled orders for ships….for a moment. These goofballs wrote in their latest article, dated today; “Last month, ‘Hetepheres’ tapped Genco as a way to get paid while you wait: “I see this one as being able to weather the current storm (so to speak) and do okay in the long run. In the meantime, DIVIDENDS.”

Really. Dividends. Hate to break it to these guys, but apart from Genco canceling orders for ships, they can kiss their dividends goodbye as Genco may be going private. News that was out TWO DAYS AHEAD of the above linked article. Motley Fools indeed. Idiots still need to play the markets I see and drag the lemmings over the edge with them. Ho hum.

admin

admin at survivalacres dot com

14 thoughts on “Baltic Dry Index Falls 93%

  • December 4, 2008 at 5:39 pm
    Permalink

    Hi all, Haven’t been around much, just taking care of business.

    Anyways, what I have noticed is the large amount of store fronts (in my area) that are empty that were active just 3 – 5 weeks ago. In one small strip mall here (8 stores) 5 have become empty in just last 2 mths. The one down the street (12 fronts) they have 4 empty. In another part of town they built a large strip mall (22 stores) 2 years ago and still have 12 fronts empty.

    So yes, no body is shopping/spending, so no goods are needed, no goods needed, no need to make anything, no need to make anything, no need for raw materials…

  • December 4, 2008 at 6:23 pm
    Permalink

    It took a minute for the impact of this to sink in. It must have taken quite a while for these slumps to get to this point, like a train slowly running out of steam. These are the kinds of “hidden” businesses that can’t just be switched on. This is really a telling sign.

  • December 4, 2008 at 8:49 pm
    Permalink

    So it begins… There just might be hope for the world after all.

  • December 4, 2008 at 11:18 pm
    Permalink

    I have been tracking the Baltic Dry Index for about a month now, and I seriously believe that very few people really understand what is happening and how it will affect our lives.
    BTW the last I read, the value of this index is around 600 now. This is to say that if you own your home outright its valve is now close to zero in comparison.

    These are some of the things that I see in very short supply by the end of January of 09.
    Cans for food packaging.
    Plastics for beverage bottles, pails, and all packaging that is used for food.
    Tinfoil for wrapping and packaging.
    All electronic equipment.
    Appliances, refrigerators, stoves, etc.
    Material that goes into making cars, trucks, batteries, etc.

    Just about everything that you see in the major stores, Target, Mal-Mart, Sears, you will notice that about the only things that will be on the shelves is junk that no one wants to buy. The supply chain for just in time manufacturing in the world has stopped. If you have any cash left you have about 60 days until there will very little to buy that will have some value. If you have been debating when to act in getting prepared, ‘foodâ’, ‘bulletsâ’, fuel for cooking and heating and the list goes on, you have from now to the end of January. The time to act is “NOW”! All the BS is over for real.

  • December 5, 2008 at 8:44 am
    Permalink

    Hibernation starts in about another week for me. Sure is sounding like there won’t be much reason to leave the den come spring.
    Collapse couldn’t happen to a more deserving or delusional cast of mutant zombie automasheeples. And when the stenchicolor movie(s) playing on the gray-screen between their fleece-packed ears starts to flicker, melt and go dark, well, reality is not going to be of any comfort for anyone.
    Ewe know what I mean! Stampede for the exits. Except, their aren’t ANY. And all the wolves in sheeple clothing are exposed for what they are. And ALL the mother-flockers bleat bleat bleat their way all through the shearing shed and into the great freezer beyond. Baaaaaaaaa Ha Ha, Baaaaaaaa Ha ha ha. The day (daze) of the wolf (and other carrion-sumers) has returned. Gory gory Hahallelujah.

  • December 5, 2008 at 9:37 am
    Permalink

    Sent in by WildBill:

    Hi John
    I normally don’t like to bother you, I know you are busy and I want to thank you again for your very insightful writings. My amazement at the crumbling world around us is confirmed more and more each day as we see thing develop. I have witnessed a leading indicator for the shipping collapse ‘parked’ on the tracks that go past my house (central MT) since last summer, 40 plus miles of burlington northern (bnsf) flatbed railcars (the type used for sea/land containers). That’s right, 40 MILES of cars, that’s thousands and thousands of cars and they have been out of service since last summer already. Therefore it is no big surprise that the BDI has collapsed, and I’m sure there are many more miles of idled railcars out there somewhere. I casually told a neighbor at the time that this was a massive sell signal sitting right in front of our houses. He (a DR no less) just looked at me
    with a blank stare. At the time all these cars were being hauled in and parked, the local paper was full of articles and letters bemoaning the fact that the cars were blocking people’s views, hindering wildlife movement, and making fishing access difficult along a stretch of track that follows the river. All I could think was that these cars are never going to be moved, ever, and how could all these stupid people be so blind to what is coming. You are always pointing out examples of
    this type of behavior, so I know this is not big new to you, but it certainly was and is a real life example of the collapse and the collective psychology of the crowd. Amazing. Thanks again. Out. WildBill

  • December 5, 2008 at 10:38 am
    Permalink

    Great posts as usual admin and great comments too!

    One silver lining to the economic collapse is the reduction in greenhouse gasses. But with gas prices falling too, this may reverse. Already it appears that the American consumer is using this windfall to drive their gas guzzlers more instead of investing in efficiency.

  • December 5, 2008 at 11:00 am
    Permalink

    Picture the world as the leaning Tower of Pisa. This over-loaded tower has had a pronounced lean for so long that we have come to accept this crazy situation as “normal.” It’s long past any chance to set things aright this side of the 22nd century.
    I think the crash will be sudden, and all over the planet.
    That said (to employ a current cliched phrase), what then shall we do?
    I have my burdens and limitations to deal with, as we all do.
    But…here’s what I’m doing: 1) stash food 2) nail down the fresh water source. For us this means a ferro-cement type reservoir, as a backup, because I know that sooner or later the pump will fail. 3) stock up on ammo and weapons. And I also should learn how to use a gun, rather than just leave that to my husband. 4) get your garden ready (buy more seeds, etc than you need). 5) Figure out a way to painlessly take your own life–I mean, what if certain forces are coming to get you, and you know that they torture before they kill? Maybe I could hang myself… morbid, but do I want to die in a concentration camp after having my body starved and beaten and exposed to the elements? Tell me I’m paranoid, assure me I’m only paranoid…6) Billions of humans are going to die in the largest “correction” in human history. Try to grasp that, make peace with that.

  • December 5, 2008 at 11:48 am
    Permalink

    logarithmic – Bush policies cause U.S. GHG emissions to soar 1.4% in 2007

    And from this article on contrails and chemtrails, I saw this:

    “With the horror of September 11, 2001 also came the opportunity for researchers to assess the atmosphere between the 11th-14th when all aircraft was grounded. Climatologists, checking against 30 years of data compared to the three flight-free days, found that the temperature ranged 2 degrees higher on the flight-free days. Daytime temperatures had gotten warmer and the nighttime cooler by 2 degrees Fahrenheit.”

    Sounds like it balanced out, day / night. But the planet will still heat up more, due to the trapped gases already in the atmosphere.

  • December 5, 2008 at 1:59 pm
    Permalink

    hmmm – Wildbill is in central MT along the BNSF line ! – Well, so am I and shiver me timbers mate. I don’t see those 40 miles of flatbed cars around here (probably East of me – between Livingston and Billings ?). But I have definitely noticed far FAR fewer trails and virtually NO container trains at all. “Normally’ this time of year there are at least 4 of these East bound per day – I don’t recall the last one passing here but it was a while ago. Most trains these daze are coal trains out of WY no doubt headed for Asian. If I was China, I’d much rather have coal than all the US currency in circulation – FAR more Btu’s in coal.

  • December 5, 2008 at 2:18 pm
    Permalink

    EM wrote, “Picture the world as the leaning Tower of Pisa. …”

    Thanks but no thanks. I picture the world (of men) as a gigantic toilet bowl. And all us simians are turds, floating around in our own bile and self-righteously stinking up the place for all eternity.

    The ‘good news’ is that the flush-handle has been activated. Now, all that remains is swirl swirl swirl – swish swish, glug glug. Hello cesspool of HIStory and bye-bye shit-for-brains.

  • December 5, 2008 at 5:46 pm
    Permalink

    Log, only in the long-term will collapse ease the addition of green house gases. During the bottleneck most of the US will try to use wood for fuel, not to mention coal.

  • December 5, 2008 at 8:54 pm
    Permalink

    While airlines aren’t as important as trains for transport of goods, I have noticed in the past year or so a genuine reduction in planes flying overhead.
    Because of a past hobby of videomaking, I was always acutely aware of the sound of a nearby airplane (total annoyance) when filming, but now notice their absence for literally hours!

  • December 6, 2008 at 9:42 am
    Permalink

    Living in the Bay Area, lately I have noticed stacks and stacks of shipping containers piled high everywhere. No more car carrying trains that use to take a half an hour to cross on the R/R crossings, now only empty flatcars that go for miles, while all the shipping containers sit idle at the ports and marinas, all over Oakland, Alameda, Richmond, and SF to Redwood City. Tons and tons and tons of useless bullshit. Or not, maybe just waiting for the economy to recover…LMAF LOL…Well, if the sheeple ever decide to start being counted, then I will return to the US and be counted right along with them. For now, there is truly nothing I can do on my own, and it really pisses me off. So, I have to leave before I do something I won’t regret but might not live to not regret it, dig.

Leave a Reply