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Old 12-16-2008, 11:44 AM
 
Location: Great State of Texas
86,068 posts, read 74,637,745 times
Reputation: 27602

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Another indicator of global trade and how the economy is faring.

Baltic Dry Index - Wikipedia, the free encyclopedia

some snippets if you don't want to read all of it:

"Most directly, the index measures the demand for shipping capacity versus the supply of dry bulk carriers."

"Because it provides "an assessment of the price of moving the major raw materials by sea," according to The Baltic, "... it provides both a rare window into the highly opaque and diffuse shipping market and an accurate barometer of the volume of global trade -- devoid of political and other agenda concerns."


Now here is where it gets interesting and may be something to keep your eye on:


"On 21 May 2008 the index reached its record high level since its introduction in 1998, reaching 11,793 points. Half a year later, on 5 December 2008, the index had dropped by 94%, to 663 points, the lowest since 1986. These low rates move dangerously close to the combined operating costs of vessels, fuel, and crews.


Cheaper fuel was no longer able to offset this situation and global letters of credit are beyond the powers of the Federal Reserve."

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Old 12-31-2008, 08:03 AM
 
Location: Beautiful Lakes & Mountains of East TN
3,454 posts, read 6,713,453 times
Reputation: 874
The Baltic Dry Index stopped publishing on 12/24 at $774. No further information is available to the public.
http://www.bloomberg.com/apps/quote?...=IND&x=15&y=11

How confidence-inspiring.

Are we being protected by the powers that be, from worrying about the fact that raw materials and FOOD are no longer being shipped...?

If that's not the case, I'd be interested in others' points of view. I'll check in after I get back from the grocery store to buy more damned flour and sugar.

I also found a good article about the BDI and why it's such a good indicator of global economic health...as well as a indication of what we can look for in the future. If raw materials aren't coming here, we don't manufacture. If food doesn't come here, we don't eat. If products aren't leaving here for other shores, we aren't making any money.
http://www.slate.com/id/2090303/
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Old 12-31-2008, 10:48 AM
 
28,453 posts, read 73,405,930 times
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If am not mistaken back under Greenspan this was an indicator the Fed was using to judge how "frothy" the broad import/export market was.

These "unprecedented" fall backs are all pretty sacry, but in the big picture the fact that so many of these things never before were at the levels they were becuase there is HUGE expansion of trade becuase of China, former Soviet states, the unifieed EU and places in the PacRim / India ALL being brought into one true "global economy" for the FIRST TIME EVER will take some time for people to get their heads around.

In all honestly EVERY OTHER downturn happened BEFORE the fall of communism AND that has yet to be fully appreciated...
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Old 01-08-2009, 08:05 AM
 
Location: North Central Florida
5,409 posts, read 6,436,023 times
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Quote:
Originally Posted by bbkaren View Post
The Baltic Dry Index stopped publishing on 12/24 at $774. No further information is available to the public.
Bloomberg.com: Investment Tools

Just to let you know, they are publishing....But whats being published, isnt much better.
Now that fuel prices are starting to climb a bit once again, it will be intersting to see if it hampers this index further. It's at 789.00 as of this writing.

Bloomberg.com: Investment Tools
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Old 01-08-2009, 07:29 PM
 
46 posts, read 90,663 times
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I don't understand, shipments of materials is down over 90% around the world. Don't these shipping barges use large amounts of fuel? Dosent that dramatically lower demand for oil? Why isn't oil $15/barrel?
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Old 01-08-2009, 08:18 PM
 
Location: Great State of Texas
86,068 posts, read 74,637,745 times
Reputation: 27602
You forget..OPEC cuts back production to try to keep prices up.
So if consumption falls, they cut production to drive prices back up.
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