Shipping rates hit zero as trade sinks

[Anonymous]

http://www.telegraph.co.uk/finance/4229198/Shipping-rates-hit-zero-as-trade-sinks.html

Ugh. This really doesn't seem like good news.

Freight rates for containers shipped from Asia to Europe have fallen to zero for the first time since records began, underscoring the dramatic collapse in trade since the world economy buckled in October.

[Anonymous]

The Baltic Dry Index (BDI) which measures freight rates for bulk commodities such as iron ore and grains crashed several months ago, falling 96pc. The BDI – though a useful early-warning index – is highly volatile and exaggerates apparent ups and downs in trade. However, the latest phase of the shipping crisis is different. It has spread to core trade of finished industrial goods, the lifeblood of the world economy.

Trade data from Asia's export tigers has been disastrous over recent weeks, reflecting the collapse in US, UK and European markets.

Does any one know what this means? What are finished industrial goods?

[Anonymous]

Cars, refrigeration and air conditioning units - as opposed to steel, rubber, iron ore, etc. that is not sold as a finished product.

[Anonymous]

Thanks.

So this means, Europse and the US are just not importing anything from China amd elsewhere in Asia right now? WHat about medications? Clothing? Computers? Replacement parts?

[Anonymous]

Anonymous wrote:Thanks.

So this means, Europse and the US are just not importing anything from China amd elsewhere in Asia right now? WHat about medications? Clothing? Computers? Replacement parts?

Tons of inventory are piling up on shelves, stores are in the process of trying to liquidate this inventory. Why import when current inventories are at an all time high, hardly moving? People are not buying new. As a nation we have completely overconsumed and hit the tipping point. The bloodbath has yet to begin.

After the distraction of a new administration wanes and the economy continues to tumble dispite the trillions of dollars thrown in the wind, at the rate we are going I think we are headed to national unrest. We are entering dark times and bitterly saying good-bye to the end of an era.

[Anonymous]

What Is The Baltic Dry Index?

Despite the name, the Baltic Dry Index has nothing to do with markets in Lithuania, Latvia or Estonia. Instead, it’s all about the cost of shipping major raw materials. Like iron ore, coal, grain, cement, copper, sand and gravel, fertilizer, even plastic granules.

The value for the index is determined by the London-based Baltic Exchange, which traces its origins back to 1744. Each day, the exchange canvasses hundreds of brokers around the world for price quotes on moving goods. For instance: Shipping 100,000 tons of coal from South Africa to Japan, or 50,000 tons of iron ore from Australia to China. It then aggregates the quotes to form the Baltic Dry Index.

Basic economic principles of supply and demand explain the significance of the index…

The supply of cargo ships is tight and inelastic. It takes roughly two years to build a new cargo ship. And the high cost of each prohibits docking ships during slow periods. In other words, a change in cargo rates does not change the number of ships in operation. So even the slightest changes in demand for shipping raw materials results in a change in the index.

And because the index tracks the cost of shipping raw materials - the precursors of economic output - instead of intermediate or finished goods, it provides a precise and rare measurement of the volume of global trade at the earliest possible stage.

A sharp move up, means global trade is increasing. Conversely, a sharp move down, means it’s decreasing. Since global economic activity ultimately influences the equity markets, sharp moves in the Baltic Dry Index often predict and precede similar moves in the equity markets.

Source: http://www.contrarianprofits.com/articles/the-baltic-dry-index-the-only-economic-indicator-worth-tracking-right-now/8453

[Anonymous]

In December ocean carrier Golden Ocean said that more than 20% of its Capesize fleet is estimated to be idle and waiting for employment. Officials from Golden Ocean said a modern Capesize vessel is earning $3,500 per day while Panamaxes are earning $6,800 per day in December. Capesize rates started the fourth quarter at $157,323 per day, but by the end of the quarter the earnings reached $41,159 per day. Panamax rates were $76,393 and $19,294 respectively.

They are earning 2.2% per day today vs. the October 1 2008 rate. And I thought my 401K took a hit!

[Anonymous]

Anonymous wrote:

Anonymous wrote:Thanks.

So this means, Europse and the US are just not importing anything from China amd elsewhere in Asia right now? WHat about medications? Clothing? Computers? Replacement parts?

Tons of inventory are piling up on shelves, stores are in the process of trying to liquidate this inventory. Why import when current inventories are at an all time high, hardly moving? People are not buying new. As a nation we have completely overconsumed and hit the tipping point. The bloodbath has yet to begin.

After the distraction of a new administration wanes and the economy continues to tumble dispite the trillions of dollars thrown in the wind, at the rate we are going I think we are headed to national unrest. We are entering dark times and bitterly saying good-bye to the end of an era.

Is this your opinion, or are you an economist? This is a dark view, which I happen to share, but I'm a pessimist. Any research to back this up?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Thanks.

So this means, Europse and the US are just not importing anything from China amd elsewhere in Asia right now? WHat about medications? Clothing? Computers? Replacement parts?

Tons of inventory are piling up on shelves, stores are in the process of trying to liquidate this inventory. Why import when current inventories are at an all time high, hardly moving? People are not buying new. As a nation we have completely overconsumed and hit the tipping point. The bloodbath has yet to begin.

After the distraction of a new administration wanes and the economy continues to tumble dispite the trillions of dollars thrown in the wind, at the rate we are going I think we are headed to national unrest. We are entering dark times and bitterly saying good-bye to the end of an era.

Is this your opinion, or are you an economist? This is a dark view, which I happen to share, but I'm a pessimist. Any research to back this up?

I forgot my crystal ball at work. Just some common sense.

No one knows what is going to happen, this is unchartered territory, but I don't think the picture is getting any brighter. There are no even remotely positive indicators on the horizon. Now many companies and localities are furloughing people. The massive layoffs are just a matter of time....what will happen when the natives get restless?

[Anonymous]

I really like this opinion piece.

http://businessmirror.com.ph/index.php?option=com_content&view=article&id=4443:the-pesodollar-at-36-to-1&catid=28:opinion&Itemid=64

[Anonymous]

That piece was interesting, but he complains about Obama's stimulus plan without offering any alternatives to help the U.S out of recession. Are there any alternatives? Obama has to do something.

[Anonymous]

Anonymous wrote:

After the distraction of a new administration wanes and the economy continues to tumble dispite the trillions of dollars thrown in the wind, at the rate we are going I think we are headed to national unrest. We are entering dark times and bitterly saying good-bye to the end of an era.

http://www.nytimes.com/2009/01/17/world/europe/17lithuania.html?ref=worldbusiness

[Anonymous]

Threat of social unrest endangers investment

Reuters
January 18, 2009 at 7:21 AM EST

http://business.theglobeandmail.com/servlet/story/RTGAM.20090115.wunrest0117/BNStory/Business/home

LONDON — The threat of social unrest is growing across emerging markets as the financial crisis boosts unemployment and economic pain, with both the instability itself and government reactions threatening foreign investors.

Demonstrations were reported turning violent in Bulgaria and Latvia this week as well as China, potentially a sign of more to come with ruling coalitions coming under threat and future policy becoming unpredictable.

Analysts say governments from Eastern Europe to Asia are already bracing themselves for potential social upheaval, with the more authoritarian leaders most willing to use force to hold their position and with investors facing a range of potential policy shifts that could endanger their positions.

[Anonymous]

Anonymous wrote:Threat of social unrest endangers investment

That Reuters article and similar ones show that if "the only thing we have to fear is fear itself", then the press will make sure we have it! It seems to me they are spinning as few as three unrelated reports of violence into a virtual prediction of widespread revolution and/or repression.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Threat of social unrest endangers investment

That Reuters article and similar ones show that if "the only thing we have to fear is fear itself", then the press will make sure we have it! It seems to me they are spinning as few as three unrelated reports of violence into a virtual prediction of widespread revolution and/or repression.

please read opinion piece posted earlier. Addresses FDRs quote you are refrencing. Different take.

Civil unrest never happens during times of economic growth and stability. It is not all that outrageous...