Baltic Dry Bear Market Index


As much as we loathe saying "we told you so" – especially when it relates to highlighting the fallacious bullshit of one James Cramer – the truth is that just 3 weeks ago we pointed out the fact that the Baltic Dry Index was being heralded as proof of China’s (and therefore the world’s great recovery) was a mistake. At the time, wenotedthetemporarynatureofthemoveandnowforwardmarketsindicateditwasnotsustainable; and of course, were met with a chorus of deniers. Well, following a 4.4% decline today, the BalticDryIndex has nowplungedover 20% fromitsrecentpeak (andthe more crucial Capesizecontainerrateseven more) as underlying demand simply cannot keep pace with the massive (overbuilt) ship glut that remains. Added to this is the apparent tighteningstancebythePBOCthatwehavebeennotingandwesuspect, as wewarned, the 2011 deja vus will be clear.

Chart: Bloomberg

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