Ходжа Н. (hojja_nusreddin) wrote,
Ходжа Н.

Gary North, "Baltic Dry Index"

The BDI is an index of freight shipping rates in Western Europe.
When it falls, business is usually getting worse.

Here is an extract from Wikipedia about 2008:
"On 20 May 2008, the index reached its record high level since its introduction in 1985, reaching 11,793 points.
Half a year later, on 5 December 2008, the index had dropped by 94%, to 663 points, the lowest since 1986.
Though by 4 February 2009 it had recovered a little lost ground, back to 1,316.
These low rates moved dangerously close to the combined operating costs of vessels, fuel, and crews..."

Note 1: May 2008 was 5 months after the US recession officially began.
The BDI was not a leading indicator.
Note 2: the recovery in December 2008 was followed by a much worse decline in the world economy in 2009.
The BDI was not a leading indicator.

Now about 2015
- "On 18 February 2015 the Baltic Dry Index reached the historic low of 509"

Today it's a little under 600.
The BDI is not a leading indicator, but it is a good "how are we doing" indicator. It is saying: "not well".

Main Street these days is not matching Wall Street. It hasn't since 2009.
There is a disconnect here. The BDI is a good "disconnect" indicator.
A reconnection can come from a booming Main Street or a falling Wall Street.
Tags: кризис, экономика

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