The Great Deception -> Baltic Dry Index. What Is That & Why Important?

Baltic Dry Index. What Is That & Why Important?

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jofortruth

Posted: Apr 2 2009, 12:27 PM

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What is the Baltic Dry Index that Lindsey talks about?
http://en.wikipedia.org/wiki/Baltic_Dry_Index

QUOTE

Because dry bulk primarily consists of materials that function as raw material inputs to the production of intermediate or finished goods, such as concrete, electricity, steel, and food, the index is also seen as an efficient economic indicator of future economic growth and production. The BDI is termed a leading economic indicator because it predicts future economic activity.[7]

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."

BDI Index:
http://www.findata.co.nz/markets/Quote.aspx?e=INDEX&s=BDI
http://www.bloomberg.com/apps/cbuilder?ticker1=BDIY%3AIND

Baltic Dry Index Drops Below 1,000 (to 982) for First Time in Six Years (Nov 2008 - Feb 2009)
http://www.bloomberg.com/apps/news?pid=206...VY&refer=europe

Why you should care about this?
http://www.slate.com/id/2090303/

QUOTE

The BDI is a good leading indicator for economic growth and production. After all, it doesn't deal with container ships carrying finished goods. It deals with the precursors to production: bulk carriers carrying building materials, cement, grain, coal, and iron. Unlike stock and bond markets, the BDI "is totally devoid of speculative content," says Howard Simons, an economist and columnist at TheStreet.com. People don't book freighters unless they have cargo to move.

jofortruth	Posted: Apr 2 2009, 12:28 PM
Administrator Group: Admin Posts: 31,405 Member No.: 1 Joined: 1-May 07	http://z4.invisionfree.com/The_Great_Decep...topic=4920&st=0

jofortruth

Posted: Apr 2 2009, 12:33 PM

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'Thesis Trading' Ignores the Data
http://seekingalpha.com/article/127427-the...gnores-the-data

QUOTE

Oh lordy, an index that traded in the 3000 to 5000 range during "normal" times in 2005-2006

jofortruth

Posted: Apr 2 2009, 02:18 PM

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Baltic Dry Index Explained:
http://tuckerreport.com/articles/baltic-dry-index/

QUOTE

The Baltic Dry Index, or BDI, is an index of twenty-two key dry bulk shipping rates and is compiled daily in London. This index provides an assessment of the price of moving raw materials such as iron ore, grains, coal, and cement by sea. This index does not include wet goods such as crude oil.

Since this index is not a tradable contract, it does not have a direct speculative component. Although contracts that do contain a speculative component can influence the cost of shipping. One component that has a speculative component, by as much as 30% as this is being written (October 2007), is crude oil. Another is the U.S. Dollar. Since the index is being quoted in dollars, the sharp fall in the dollar is partly responsible for the recent near vertical rise in the index.

So why would an investor or trader care about how much it costs to ship dry goods by sea?

Transportation by sea can be a good barometer of the volume of world trade. This index can be a good economic indicator for future growth and production, since the raw goods being shipped are precursors to production. Also, since the number of ships available is relatively fixed, the price of shipping can go up or down based on supply and demand. If world growth slows, the cost of shipping raw goods will decrease. If world growth accelerates, the cost of shipping raw goods will likely increase.

Today a large portion of the demand for raw goods comes from China. The growth cycle in China influences the profits of many companies around the world. Having an index that can give a clue to when the trend of the demand for raw goods is increasing or decreasing can give important clues to possible changes in broader economic activity.

jofortruth	Posted: Jan 17 2012, 10:45 PM
Administrator Group: Admin Posts: 31,405 Member No.: 1 Joined: 1-May 07	http://forum.prisonplanet.com/index.php?topic=226746.0 http://www.zerohedge.com/news/baltic-dry-i...st-january-2009

jofortruth	Posted: Jan 26 2012, 12:25 PM
Administrator Group: Admin Posts: 31,405 Member No.: 1 Joined: 1-May 07	Container Lines Steam Slower to Restore Profit (Down 42%) http://forum.prisonplanet.com/index.php?to...seen#msg1337620 http://www.zerohedge.com/news/baltic-dry-p...norm-start-year

jofortruth	Posted: Feb 7 2012, 12:34 PM
Administrator Group: Admin Posts: 31,405 Member No.: 1 Joined: 1-May 07	http://forum.prisonplanet.com/index.php?PH...seen#msg1340676

jofortruth

Posted: Aug 5 2012, 07:28 PM

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Record Breaking Low Hit by the BDI:
http://www.alt-market.com/articles/914-bad...omic-signs-2012

QUOTE

... record breaking low hit by the BDI and its implications for the global economy; namely, that it signaled a steep decline in true demand around the world for raw materials used in the manufacture of consumer goods, and that similar declines in the BDI�s past have almost always prophesized a crisis event in financial markets.

jofortruth	Posted: Aug 20 2012, 09:39 PM
Administrator Group: Admin Posts: 31,405 Member No.: 1 Joined: 1-May 07	Brandon Smith talks about the economy and the crash of the Baltic Dry Index in January 2012: (HR 3 on 8-20-12) http://www.gcnlive.com/programs/powerHour/archives.php TIME 41:06 3rd hr - He said that 8 mths to 1 year after you see the Baltic Index collapse or hit a new low, you will see a major market event! That happened in January and this month, August(see chart above)! It's coming, people! Get prepared!

jofortruth	Posted: Oct 11 2012, 09:59 PM
Administrator Group: Admin Posts: 31,405 Member No.: 1 Joined: 1-May 07	Warning Signs: FedEx to Slash Thousands of Jobs Citing Weak Global Economic Conditions: http://www.prisonplanet.com/warning-signs-...onditions�.html 845.00 - Oct 4, 2012

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