Baltic Dry Index New High
We haven't look at this in a while: Since March, the Baltic Dry Index keeps making new highs: This is reflecting in large the global growth, especially Asia and to a lesser degree, Europe.
Minyanville points to this FT article, that posits the growth in the BDI reflects a shortage of shipping vessels as much as it does demand for shipping:
"Commodity prices may be soaring on record demand for raw materials but so too are the prices for shipping these goods around the world.
This week, the Baltic Exchange’s dry freight index, a composite of prices for shipping dry commodities, hit a record high of 6,248. The index has risen 41 per cent this year.
The voracious appetite for raw materials in China and India, whose rapidly expanding economies have fuelled the current commodity boom, has stoked demand for the transportation of these goods.
Meanwhile, port congestion has led to delays and extra costs that shipping companies are passing on to customers."
Here's the most recent chartage:
Short Term Chart
Long Term Chart
Charts courtesy of InvesmenTools.com
>
Sources:
Shipping rates rise on shortages of vessels
Neil Dennis
FT, May 1 2007 19:49
http://www.ft.com/cms/s/0a1ab362-f80e-11db-baa1-000b5df10621.html
Wednesday, May 02, 2007 | 01:49 PM | Permalink
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Comments
I give up.
I should just buy a big basket of stocks and shut up. 50% S&P and 50% Emerging markets. I also should buy a big house in California on the coast and shut up.
The bulls have been right all along.
There is no use waiting for a 'correction' in the stock market or the housing market. Because it isn't coming. The world is awash in liquidity. Liquidity begets liquidity.
Clearly the market has demonstrated to me that my cautious approach over the past few years has been just plain dumb.
I'm getting killed on all fronts: shorts, reduced emerging exposure, rental housing...
Posted by: Mr. Beach | May 2, 2007 2:00:23 PM
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