January 2012 archive
Jan 30 2012
Jan 30 2012
The Baltic Dry Index–
tracks worldwide international shipping prices of various dry bulk cargoes.
The index provides “an assessment of the price of moving the major raw materials by sea. Taking in 26 shipping routes measured on a timecharter and voyage basis, the index covers Handymax, Panamax, and Capesize dry bulk carriers carrying a range of commodities including coal, iron ore and grain.”
Since 1744. Because Cargo Ships take a long time to build and are very expensive, capacity is relatively stable and rises and falls in the price are a leading indicator of Economic Demand for Raw Materials.
Handymax is the smaller sizes, Panamax is the largest size that will fit through the Panama Canal, Capesize are so large they have to sail around Cape Horn and the Cape of Good Hope.
Unlike stock and bond markets, the BDI “is totally devoid of speculative content,” says Howard Simons, an economist and columnist at TheStreet.com. “People don’t book freighters unless they have cargo to move.”
The companion index is the HARPEX which doesn’t have it’s own Wikipedia entry, but which measures shipments of cargo packaged in containers. Some raw materials yes, but mostly manufactured items being transported for assembly and sale. Your Foxconn iPhone came from China in one.
Last week Louis Basenese of Wall Street Daily (not Journal) published this piece that made some Economists nervous.
The Most Alarming Chart I’ve Seen All Week
Louis Basenese, Wall Street Daily
Published Fri, Jan 20th, 2012
While (almost) everyone finally agrees that the United States has avoided a nasty double-dip recession, a slowdown’s brewing elsewhere in the world.
How can I be so sure? All I have to do is look at the latest chart for the Baltic Dry Index.
(T)he Index is down 48.4% in the last month. And it’s down 54.4% in the last three months.
The culprit? Why, Europe, of course.
On Wednesday, the World Bank cut its world economic growth forecast explicitly because of Europe’s never-ending debt crisis. Meanwhile, as Europe’s debt crisis persists, Bloomberg reports that the IMF plans to cut its global growth forecasts, too.
A recession is afoot, if not already underway.
And thus it has come to pass, exactly as predicted.
U.K. Teeters on Brink of Recession as King Signals More Stimulus: Economy
By Scott Hamilton and Jennifer Ryan, Bloomberg News
Jan 25, 2012 7:38 AM ET
The U.K. economy shrank more than economists forecast in the fourth quarter as manufacturers cut output and services stagnated, leaving Britain on the brink of another recession
Gross domestic product fell 0.2 percent from the third quarter, when it increased 0.6 percent, the Office for National Statistics said in London today. The median forecast of 33 forecasts in a Bloomberg survey was for a drop of 0.1 percent. Public-sector strikes over pensions on Nov. 30 had “some impact” on GDP in the quarter, the statistics office said.
Bank of England Governor Mervyn King said yesterday that policy makers can increase stimulus again if needed to guard against a “renewed severe downturn.” The U.K., the first Group of Seven nation to report fourth-quarter data, may not be the last to report a contraction. Germany’s statistics office estimated GDP fell about 0.25 percent in the period and the International Monetary Fund has forecast a euro-area recession.
That would be Mervyn King, Bank of England Governor. Elizabeth Mountbatten is still preparing for her Diamond Jubilee and Prime Minister David Cameron’s idea of economic stimulus is to give her a $2 or $3 Billion Yacht she doesn’t need and says she doesn’t want.
Now the Wall Street Bull Shill Artists don’t like bad news getting in the way of their Ponzi schemes so there’s been some push back-
The Blame Game: Revisiting "The Most Alarming Chart I’ve Seen All Week"
Louis Basenese, Wall Street Daily
Published Fri, Jan 27th, 2012
Readers responded that I unfairly pegged the three-month, 54.4% drop in the Baltic Dry Index on Europe’s never-ending debt crisis. Instead, readers said I should have also pointed a finger at China.
Well, readers, I admit it: You’re right.
As I noted on Wednesday, China’s economy is decelerating. And as the biggest consumer of raw materials, it’s definitely having an impact on the Baltic Dry Index and global economic activity. In fact, the IMF cut its global GDP forecast this week from 4% to 3.3%.
Shame on me for not blaming China, too. Can you ever forgive me?
But wait! It’s all about the Supply Side!
The supply of bulk ships only increased 8.9% over the last year and 2.8% in the last three months. Do you really think a 2.8% increase in supply is entirely responsible for a 54.4% drop in the Baltic Dry Index over the same time period?
Even if we look at the increase in capacity – which is up 12.7% in the last year and 3.9% in the last three months – there’s no way it’s the only factor sinking the Baltic Dry Index.
And how about that HARPEX?
In the last six months, the number of container ships only increased 0.3% and capacity only increased by 1.9%. Meanwhile, the HARPEX Index is down 46.9% over the same period.
Louis is not the only one noticing this.
Chart of the Day: The Baltic Dry Index
Sebastian Walsh, Financial News
25 Jan 2012
According to (Nick) Bullman (managing partner at risk consultant Check Risks), its initial collapse in October was driven primarily by a fall-off in demand from China, where declining housing prices pushed purchasing managers to cut back on orders for the raw materials whose transport the Baltic Dry Index reflects.
He said: “This collapse looks similar to the falls we saw in the Baltic Dry ahead of the recessions of the late 1970s and early 1990s – but this drop is actually steeper.”
“US unemployment is in high double digits at moment, not 9% – the way the US government collates the data means the long-term unemployed just fall out of the numbers.”
Bullman said that shipping companies have also been deliberately slowing down their journeys to save fuel, with trips from China to the US going now taking around 50% longer than they were early in 2011.
(H)e said he was surprised by how long the Baltic Dry took to fall.
“What this is signalling is that the world economy is slowing down much more quickly than people have been thinking.”
Even if the problem is over capacity, this is not good news.
Business Insider quoted Basil Karatzas, the chief executive of Karatzas Marine Advisors, as saying European banks could face nearly $100 billion in losses to restructure the $500 billion in shipping loans on their books.
Jan 30 2012
Of all foodstuffs, milk is unique in that it provides all of the nutritional needs for infant mammals. In addition to nutrition, it also supplies essential antibodies the first few days to newborns. Milk is unique to mammals, and is one of the reasons that mammals had the evolutionary advantage that they had when they arose during the age of reptiles.
However, humans are also unique in that we are one of the few mammals who continue to take it after infancy, and the only species that continues to take it after adolescence and into adulthood. Milk is far from the perfect food for adults, but certainly can be part of healthy diet.
Humans are also unique in that we are the only species that takes milk in a natural setting from other species. By that I mean that we actively collect it, not like giving the cat a saucer of milk. The nutritive value of milk is species specific, and our habit to taking cows’ milk (for the most part) is quite unnatural.
Jan 29 2012
Our regular featured content-
- On This Day In History January 29 by TheMomCat
These featured articles-
- My Little Town 20120125: My Cars by Translator
- The Baltic Dry Index by ek hornbeck
- What’s Cooking: Super Bowl Chicken Wings by TheMomCat
our weekly features-
- Six In The Morning On Sunday by mishima
- Punting the Pundits: Sunday Preview Edition by TheMomCat
- Rant of the Week: Rachel Maddow by TheMomCat
Jan 29 2012
What good a revolution, have you no fixed plan for what comes next?
Be careful what you wish for….
Things aren’t that bad. The devil you know may be better than the devil you get…
Things are that bad. Things are unimaginably bad, had people the ability to connect dots so obvious a kindergartener with a crayon could complete the picture and probably sound out “Fascism” before the MSM could possibly do it.
I dreamed, long ago in gentler days of a 100th monkey moment of enlightenment. I prayed that humanity would evolve. I beseech-ed those who would listen that unless we did something then, that things were turning dire. I think even if my moderating forces were still around me? My radicalization is the result of facts on the ground.
Revolution is now coming whether or not you like it, dear readers. Everything is about to change so visibly that like the proverbial frog in the boiling pot, people will wonder why their world is burning around them, and wonder how we let it get so far.
The new normal may soon look something like this:
America! America! Lets bring Freedom to Thee!
Jan 29 2012
By Brian Terrell
On January 25, the host committee for the G8/NATO summit in Chicago in May unveiled a new slogan for the event, “The Global Crossroads.” The mood of the organizers is upbeat and positive. This is a grand opportunity to market Chicago with an eye for the tourist dollar and the city is ready, the committee assures us, to deal with any “potential problems.”
One of the potential problems that the committee is confident that it can overcome, according to a report by WLS-TV in Chicago, is “the prospect of large-scale protests stealing the stage as the world watches.” The new slogan stresses the international character of the event and the prestige and economic benefit that hosting world economic and political leaders is expected to bring to Chicago. “We’re a world class city with world class potential,” declares Mayor Rahm Emanuel. “If you want to be a global city, you’ve got to act like a global city and do what global cities do,” says Lori Healey who heads the host committee and who previously led the city’s unsuccessful bid to host the 2016 Olympics.
All indications, unfortunately, are that Chicago is preparing to “act like a global city and do what global cities do” and it appears to want to follow the lead of other “global cities” in dealing with mass demonstrations threatening to “steal the stage;” think Tehran, Beijing, Cairo, Moscow and Seattle, to name a few.
One of the chilling developments the hosting committee announced was that the Illinois State Crime Commission is “urgently seeking Iraq-Afghanistan combat veterans to work security positions for the G8 summit.” The commission’s chairman clarifies that is for “private security” and not to work with the Chicago police. As in other “global cities,” these veterans will be used as private mercenaries without the legal protections and benefits of public employees.
The Veterans Administration reports treating about 16% of the 1.3 million of veterans of these two wars for post-traumatic stress disorder and many more do not seek help. In answer to a potentially volatile situation in the streets of Chicago, the commission is not seeking workers trained in conflict resolution, but it has an urgent need for ex-soldiers trained in the violent chaos of Iraq and Afghanistan. These veterans urgently need treatment and meaningful employment, but at the “global crossroads,” they are offered only temp jobs as rent-a-cops protecting the interests of their exploiters.
Beyond touting the overblown promise of money that the summit is expected to bring (“To penetrate international markets takes time and money,” said Don Welsh, Chicago Convention and Tourism Bureau) the city and its welcoming committee do not encourage education or reflection on what NATO and the G8 are and what they do. Despite its claims, NATO was never a defensive alliance. It is structured to wage “out of area” wars in Asia, the Middle East and North Africa, as well as to “contain” China. NATO’s creed is aggressive, expansionist, militarist and undemocratic. The G8 represents the economic interests of its member states. It is not a legal international entity established by treaty but acts outside the law, with NATO as its enforcer.
Jan 29 2012
We have a Democratic administration in Washington.
We have an escalation of police being militarized.
We are seeing the takeover of our public police force by corporations. Corporates hire the police we pay for with our tax dollars… to protect them from us. It is amazing.
And, fyi, the bail outs? Fought for and pushed by Democrats in Washington in 2008 and still being carried out …
Jan 29 2012
This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.
Find the past “On This Day in History” here.
January 29 is the 29th day of the year in the Gregorian calendar. There are 336 days remaining until the end of the year (337 in leap years).
On this day in 1845, Edgar Allan Poe’s famous poem “The Raven,” beginning “Once upon a midnight dreary,” is published on this day in the New York Evening Mirror.
“The Raven” is a narrative poem by American writer Edgar Allan Poe, first published in January 1845. It is often noted for its musicality, stylized language, and supernatural atmosphere. It tells of a talking raven’s mysterious visit to a distraught lover, tracing the man’s slow descent into madness. The lover, often identified as being a student, is lamenting the loss of his love, Lenore. Sitting on a bust of Pallas, the raven seems to further instigate his distress with its constant repetition of the word “Nevermore”. The poem makes use of a number of folk and classical references.
Poe claimed to have written the poem very logically and methodically, intending to create a poem that would appeal to both critical and popular tastes, as he explained in his 1846 follow-up essay “The Philosophy of Composition”. The poem was inspired in part by a talking raven in the novel Barnaby Rudge: A Tale of the Riots of ‘Eighty by Charles Dickens. Poe borrows the complex rhythm and meter of Elizabeth Barrett‘s poem “Lady Geraldine’s Courtship”, and makes use of internal rhyme as well as alliteration throughout.