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.
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Now about 2015:
- "On 18 February 2015 the Baltic Dry Index reached the historic low of 509"
http://en.wikipedia.org/wiki/Baltic_Dry_Index
Today it's a little under 600.
http://www.bloomberg.com/quote/BDIY:IND
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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.
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https://www.garynorth.com/members/13413.cfm
