I gasped when I saw this. This is serious.

[CoffeeCat]

The Baltic Dry Index (BDI). Yes, it's wonky, but the Baltic Dry Index is one of the most honest and
untainted economic indicators remaining. http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm

For anyone not familiar with it, the Baltic Dry Index tracks the daily price of shipping raw materials around the world. If the economy is humming along, the demand for raw materials (coal, iron ore, food, metals, etc.) increases. When demand for raw materials falls worldwide--fewer cargo ships are needed--and the price of using these ships FALLS.

You can't bullshit, spin or politicize these numbers.

According to Wikipedia, "Because dry bulk primarily consists of materials that function as raw material inputs to the production of intermediate or finished goods...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.

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."

Look at the current chart and how low the price is. These numbers are damn near close to 2008 levels,
when the bottom dropped out. http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm

This chart and the current numbers are horrendously bad. As previously mentioned, the BDI "predicts
future economic activity" because it measures the demand for inputs that will be made into final products.

Things are bad now, and apparently the near future--according to these BDI numbers--is looking pretty
bad as well.

[johnd83]

1. The commodity bubble is popping

This may not be a bad thing if the price of raw material drops. I think it is one of the major factors for slow growth that is not getting much attention.

[Amonester]

36. It clearly shows the world is now one WITHOUT sufficient DEMAND.

Well, the DEMAND side is there in terms of DESIRE to purchase, BUT the financial means for satisfying that demand is just not there.

People.Don't.Have.Enough.Cash (or credit, or just don't want to go deeper into debt).

[johnd83]

42. The rich have vacuumed up all the "money"

which I can't quite figure out because all "money" is these days is a few bytes in a computer system. There is plenty of wealth, ability to create wealth, resources, and desire to buy stuff. We have just collectively gone insane apparently.

[Amonester]

44. We may have gone insane to some measure, but...

let's also recognize the fact that there was (still is) one crucial flaw at the origin of all this:

- Money for politicians to campaign with

- And mostly from where it must come from (I'm not thinking about the relatively small individual donations)

A strict Public Campaign Funding should have been thought of at the beginning of the creation of this system of government, and if we had it since the beginning, we wouldn't be in this mess.

The problem is, those who would have to vote for such a system now are those who get all the 'extra' monies (and 'advantages') from the special interests lobbies.

[johnd83]

48. I think we need to cap how much money an individual can make

We had a de-facto cap on maximum income after WWII and things were great. Actually if the rich would just spend their money things would be a lot better, even if it is just on luxury junk at least the money would go back into the economy. Right now whoever dies with the most money wins. Great way to run an economy. It seems like the trust fund babies feel entitled to everyone else's money.

[thecrow]

46. I'm a jewelry modelmaker for gold and silver....

I think I'm going to wait a real long time.

[ooglymoogly]

57. what is a jewelry modelmaker for gold and silver

An architectural model maker would like to know.

[DJ13]

2. You know what that means?

There will be a rush job on slashing entitlements before its obvious they shouldnt be cut.

[Broderick]

3. hmmmmm

[CoffeeCat]

4. I think these BDI numbers...

...give credence to the notion that the bottom is completely dropping out. The media won't
be able to spin "green shoots" or "things are getting better any day now!" stories out of
what is about to hit us.

The media lies so much about the economy. Most of the numbers are totally cooked. Even the
CPI is a big farce. We're told we've got very little inflation and therefore--it's insinuated
that our cost of living is just holding fine. We're not holding fine, when gas has gone up
in price and the average grocery bill is up about 30 percent. But the CPI numbers that are
released and focused upon--do not factor in gas and groceries.

The polls, the unemployment numbers, so much of it--spun nonsense designed to hide what is
happening.

They just won't be able to hide it any more.

[femrap]

51. I'm currently reading

"The Black Swan" and the author, who has a ton of experience, says these supposed expert economists who try to predict the future are absolutely WRONG 99% of the time.

Just look at today's Balance of Trade predictions....EVERYONE WAS WRONG. It was much higher than anyone reported.

About once/month, I go to the local mall on a Saturday afternoon and walk through the entire place and I observe how many people have shopping bags and how many don't.

Two weeks ago, I was amazed at how few had shopping bags. I also drive by Goodwill and look at how many cars are in the parking lot...

This will tell you more than any 'economist.'

[GillesDeleuze]

55. markets have taken his advice:

pimco and others made killings on their black swan funds (tail insurance)

[BackToThe60s]

41. Wouldn't surprise me

:grr:

[nadinbrzezinski]

5. I wonder if the cargo ships are once again parked in the middle

of the pacific... gulp is right.

[Cerridwen]

6. That was my first thought.

Sorry to see I wasn't "mis-remembering" what I've read here in the past.

[nadinbrzezinski]

7. Nope you were not... lemme see if I can wrangle that story

Here

http://www.dailymail.co.uk/home/moslive/article-1212013/Revealed-The-ghost-fleet-recession-anchored-just-east-Singapore.html

I hate that elephant memory

[CoffeeCat]

10. The BDI is lower now...

...than it was in Sept 2009, when that article was written and those ships were all parked and
sitting vacant.

Those ships--and many more more--are sitting somewhere.

Too bad there aren't any journalists out there who would be willing to track down a great story
and report on this.

A girl can dream, can't she?

[nadinbrzezinski]

12. We could use Google Earth

citizen journo and all that.

I am betting if they are parked, malasya is a good target... near all trading channels, and cheap. Oh and not that good of a chance of a good hurri... err typhoon.

[DeSwiss]

25. The South China Sea off Sinapore is lousy with them....

1°13'37.41"N 103°50'39.87"E

That's the same place the article said they parked them in 2009, so I looked there first.

[nadinbrzezinski]

28. Here you go

13°09'17.88" N 100°49'34.83" E

Containers galore tied together.

[hootinholler]

49. Um, google earth is not realtime

The images are a collage taken over years.

-Hoot

[DeschutesRiver]

8. Thanks so much for posting that - had watched BDI during 2007/2008

and it really does speak volumes, in as unbiased a way as is possible in this world.

It is taking forever to pull it up with my stupid dialup, but just wanted to thank you for bringing this up, as checking it had completely slipped my mind during our current crisis.

Oh, and.... oh crap if it is reminiscent of 2008.

[CoffeeCat]

9. I watched the BDI during 2008 as well....

...and haven't checked it as often, during 2011. It had been several months since
I checked it, and I really was stunned.

I wonder how the MSM will try and spin this.

[bhikkhu]

27. I'm guessing it will be the familiar "supply and demand" fairytale

...as when recession or economic disruption slows the economy, demand for items decreases, less bulk is shipped around the globe, and often ships sit idle.

[indurancevile]

11. The bottom dropped out in 2008 because traders had been buying up supplies & parking them to drive

up prices.

The biggest and most secretive gathering of ships in maritime history lies at anchor east of Singapore. Never before photographed, it is bigger than the U.S. and British navies combined but has no crew, no cargo and no destination - and is why your Christmas stocking may be on the light side this year

Read more: http://www.dailymail.co.uk/home/moslive/article-1212013/Revealed-The-ghost-fleet-recession-anchored-just-east-Singapore.html#ixzz1Uh22mnfg


It's dropping out now for the same reason.

[nadinbrzezinski]

13. I used google earth

and to my untrained eye it looks they are parked there again.

13°09'17.88" N 100°49'34.83" E

[CoffeeCat]

20. Amazing that you found those ships, Nadin!!!

The course of this conversation is unbelievable! We're wondering if demand is low for raw materials--if the ships
are sitting idle again, as they have in the past.

Nadin, finds them on Google Earth.

Isn't that astounding???

Seriously...this is a big story!

Kudos to Nadin for looking and finding, what appears to be, a large group of ships that are dormant--which would reflect
the tanking BDI numbers right now.

Amazing.

[A HERETIC I AM]

32. Being surprised to find a bunch of ships in or near the Strait of Malacca is like being surprised

to find a shitload of empty trucks in Lake Station, Indiana.

Look....The BDI is a significant indicator, to be sure, but the area where these ships are anchored is basically just like any major crossroads in the Interstate system in the US.

It is to be expected. They have anchored there for decades.

Look at where the Malacca Strait is;

http://maps.google.com/maps?ll=4,100&spn=10,10&t=h&q=4,100

Now, before I get accused of being a Pollyanna or saying everything is rosy (I'm not) please understand something.....


Empty ships with no assigned cargo have to sit somewhere, they can not stay tied up at the dock and what better place to sit than one of the busiest shipping channels on the planet, that is convenient to several of the busiest exporting ports in the world? They sure as hell don't sit in "the middle of the Pacific", just as empty tractor trailers don't drive to the 250 mile marker on I 80 in Nebraska and pull over and wait for a load.

When the BDI is back to normal, you will STILL find lots of ships at anchor there.

[CleanGreenFuture]

40. I agree with everything you said. However,

this is also the place where you would see parked ships with no cargo to haul. So, it's all about what the normal number of idle container vessels is during good times vs. bad times. Since we don't have that information, we are merely speculating.

[A HERETIC I AM]

43. Ships with cargo to haul don't sit still!!

Yes, there were reports over the last few years of tankers being used to store crude, but that is understandable in that market when one considers the limited amount of tank storage on land. Grain farmers will often have tractor trailers freshly loaded from the field sit outside the gates of a grain elevator in the Midwest while they wait for the price of wheat to go up in a bull market.

The BDI index, as I understand it, has nothing to do with "container" ships, as those transport containers, typically loaded with finished goods. It specifically refers to bulk shipping that transports things like iron ore, coal and other basic commodities used at the beginning of the production cycle. The types of ships that haul iron ore can not be used to transport containers. Their designs are completely different.


These types of threads always amuse me, because a huge deal is being made of something that, while certainly significant, is COMPLETELY cyclical.

The longer a bulk carrier stays at anchor empty, the more the pent up demand builds. The longer a recession lasts, the more pent up demand builds. Sooner or later, your refrigerator is going to fail and you are going to buy a new one. Ditto your car, your clothes, your shoes, your roof, etc. etc. etc.

Recessions come to an end. They always have and they always will. It's just that the circumstances that preceded this one were pushed up and to the brink by the Bush administration by creating a false housing and demand bubble in the US that basically fucked over the entire planet.

It will take a while, but it will end. And when it is over, you will STILL find empty ships at anchor (not "parked" for fucks sake) in the Straits of Malacca.

[thereismore]

53. Yeah yeah, completely cyclical. Just like recessions in capitalism, nothing to see here, right? nt

[A HERETIC I AM]

56. Reading comprehension not your strong suit, eh? n/t

[Rex]

14. Forgot all about the ghost fleet!

Is the armada still full of product?

[Ellipsis]

18. I did too... but I remember the image.

[CleanGreenFuture]

15. "It's dropping out now for the same reason."

Is that your opinion or do you have a link source?

[CoffeeCat]

17. My understanding of the BDI...

...is that as the BDI tanks--that means demand for those ships is lower. Goods aren't moving, due to a poor
economy, so the price of "renting" those ships for raw-material hauling--drops.

That is what has happened.

This is all related to demand. So, demand for raw materials is lower--so the ships aren't needed to move product.

So, they sit empty and still in the water.

I find it counter intuitive--given our current economic climate--that these ships would be full of product and sitting
idle--because traders are trying to hoard product and drive up prices. That flies in the face of EVERYTHING that is
happening. How in the hell could someone get a higher price for anything now, when demand is tanking?

The BDI is tanking--and it is a fact that is because of lower demand for raw materials.

I highly doubt what the poster is suggesting--but I am willing to listen and learn.

[CleanGreenFuture]

22. I completely agree with you about what the BDI is and it's current state.

And I'm really glad you brought it up because I used to use it as a barometer of the the bigger picture back in the 2008/09 time frame. Thank you.

That it is so low now is an indication that things are moving very slowly around the planet and some things are not moving at all.

I don't know what indurancevile is talking about, holding goods off the market to run up prices. I hardly think parking ships for that reason would bring down the price of shipping for the entire container ship industry. Indeed, if you ask me to park my container vessel, it's going to cost you an arm and a leg.

[nadinbrzezinski]

24. Also goods do not do well parked

in ships... salt and all that. The ocean environment is not that friendly.

[CoffeeCat]

30. Exactly...

it doesn't make sense. If you sell grain and want to hold large supplies back--to create false shortages and get
higher prices--why would you store it on a container ship that requires you to pay high fees? Those fees would eat
up any higher price you could get for your grain.

It doesn't make sense that producers of these raw materials would store these raw materials on ships. They
could hoard them and store them at their own sites at no cost.

Bottom line--the BDI is incredibly low right now because demand for these raw materials is low. You can't
ask for higher prices if demand is at near 2008 levels. Doesn't make sense.

Maybe the poster, in good faith, passed on information that he/she read. When the BDI attracted attention
back in 2008, the MSM tried to spin the tanking numbers. They really couldn't though. So, it's possible
that the poster just passed on info, not realizing that it was not solid or credible information.

[indurancevile]

45. just my opinion based on prices & random things i read over the last year about

commodity speculation and my bias -- being that if they did it before, they'll do it again. ;>)

[CoffeeCat]

16. But I thought those ships were parked...

...because they were empty and not running--due to decreased demand for nearly everything--because of the
horrendous economy. Certainly, what was happening with the economy in 2009--when these ships were parked--would
indicate that demand for everything had fallen.

So, how could traders drive prices up--during a time when demand for everything was falling and consumers
were not spending?

The situation is similar now. Nadin seems to have found these ships parked again (and I find that incredibly
amazing!). They're not parked there now because someone is trying to drive prices up. There is decreased
demand and you can't have rising prices while demand is falling off the chart---that flies in the face of
basic supply and demand laws. And that's what the BDI indicates now--as well. The current BDI index is low because
the current demand for raw materials is plummeting.

It seems...the ships are parked and dormant because demand isn't there---not because someone is hoarding commodities
and trying to drive prices up of raw materials. Right now, that doesn't seem to fit--because the economy
is tanking and demand is low.

[nadinbrzezinski]

19. It is not that amazing, we have the technology in our desktops

Yes, we have the same kind of tech that intel people used to have. Google earth works on photos, not real time... so it could be as old as two weeks, last pass from the satellite.

I just looked in the same general geographic area, why I posted the location. Hubby and I love to play with google earth, it is an amazing tool

[CoffeeCat]

21. You connected the dots though...

...You recalled the 2009 pic of the "ghost ships" and you found another group "ghost ships" in 2011.

I know the technology is available to all of us--but you put the pieces together.

This is a new story. No one has reported on this or made the connections that you have.

That IS amazing.

[CleanGreenFuture]

23. I would guess there are several ghost fleets spread around the planet.

[nadinbrzezinski]

26. Yep they'd have to be near major shipping lanes

and well protected from weather events... (or as protected as you can) but off most prying eyes.

I'll have to ask hubby for good candidates for that. He used to do navigation for a living. THis one I just went from the 2008 story and poked around as it were.

[CleanGreenFuture]

29. Zoom in just to the east of Singapore ... (I don't know how to get the coordinates)

[eleny]

33. As you move your pointer around look at the bottom of the Google Earth screen

You'll see the coordinates changing as you move the pointer. It also tells the elevation of the spot.

[nadinbrzezinski]

34. You are right, who is silly enough to park

if they are parked, a bunch of ships near the entrance of the malaca straits?

That is prime pirate territory...

If they are parked, that is.

Oh and the straits are a major shipping late as well,

[eleny]

31. The screen says "Imagry Data: 12/20/2009" Does that mean the picture was taken back then?

I haven't used Google Earth in a while but installed it earlier tonight. So I was excited to see what's new and checked out the location you posted.

I looked at the picture of our house and the date in the lower left seemed right for the changes we made around that time.

[nadinbrzezinski]

35. Yes, some of this is really old imagery

[former9thward]

37. Most of the photos on Google earth are far older than 2 weeks.

Many are several years old. The image date is in the lower left corner.

[eleny]

38. This one is old, then. But the one of our house is from this April

[indurancevile]

47. "So, how could traders drive prices up--during a time when demand for everything was falling"

By restricting supply. Same reason farmers fed milk to their pigs instead of sending it to market during the Depression; same reason the government pays farmers not to grow food; same reason the government isn't putting foreclosed houses on the market.

It's a well-established phenomenon.

[nadinbrzezinski]

39. Sorry I got confused between the Tetramagic imagery

20011, and the actual date for this section at 2009.

I hate it when it does that.

[femrap]

50. I love the BDI as

a predictor of things to come. Yes, it looks like the shit is gonna hit the fan.

China has overbuilt....entire cities are empty.

Americans are buying only what they need...well, at least The Former Middle Class ones.

[thereismore]

52. Gold just goes up and up. Is this a sign of a bubble? Experts please? nt

[sfpcjock]

54. I'm having some trouble reading that chart.

Is high good or bad, and what is it now?