Baltic Dry Index Down 17 Days in a Row
The Baltic Dry Index has now declined for 17 straight days and hasn't had an up day since early July. Since its peak in the Spring, the index is now down more than 30%. Given that the index measures tanker shipping rates, falling prices are considered a sign of global economic weakness, while rising rates are considered signs of strength.
In the present situation, however, the interpretation is a bit more tricky given the actions by the Chinese government to shut down factories ahead of the Olympics. Some expect these rates, as well as the prices of other commodities, to pick up once the Olympics pass and factories begin to open back up. While it sounds like a plausible explanation, is the market really that shortsighted that it hadn't already priced in a two-week event that has been on the radar for seven years now?
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Huh? Which factory you know handle their international shipping - over the ocean, btw - in real time?
DRY is over fried. Nothing more.
Posted by: huh? | August 05, 2008 at 05:35 PM
The Baltic Dry Index has nothing to do with tanker rates. It relates to dry shipping freight.
Posted by: Tim | August 06, 2008 at 09:53 AM