Baltic Dry Index

[professor_56]

Some analysts think the Baltic Dry Index is a proxy for the global economy. If that's the case, the global economy is in big trouble. The Baltic is down 70% since December, 2004. Check it out at:

http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm
Lots of information on this web site. Let me know what you think.

professor_56

[professor_56]

Shai,
Welcome to the Forum.
I don't pretend to be any kind of expert on the Baltic Dry. However, I do read a lot and try to report some of the things I am reading and researching.

" The link between stock prices and shipping rates is simple: A weakening economy produces lower demand for shipping capacity, and this in turn will reduce supplies and firm prices eventually. The link is global…."
Howard Simons

"Today the BDI is an excellent leading indicator because brokers canvas carriers that transport the materials (like cement, grain and iron) used to make the finished goods -- precursors to production. As such, this is a terrific leading indicator and further confirmation that we might be moving towards a synchronized world slowdown." Doug Kass 7/5/05

Of course, these guys and others might not know what they're talking about, but, then again, perhaps they do.

There also seems to be a positive correlation between the Baltic Dry and the Dow Jones World Index, which has not rolled over yet.

It's something to think about.
professor_56

[Dardashti]

Let's keep this in perspective here.

The BDI is a proxy for the earnings of dry shippers that operate on a spot-rate basis. That's it. There's no global meltdown; just a meltdown in the profitability of many shipping companies, as reflected in some recent stock movements.

Shai

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Editor, Shai Dardashti on Grahamian Value
www.ShaiDardashti.com