Heads across the sky
--Paul McCartney
As reported by ZeroHedge, the Baltic Dry Index (BDI) continues to bounce along the bottom hit after crashing in 2008. Currently it is on pace to deliver close to its worst annual performance in measured history.
Bulls continue to drink all BDI numbers pretty. When the index rebounded in 2009-10, bulls hailed the rise as an indicator of global growth following the credit market meltdown.
When the BDI sank back to crisis levels, bulls dismissed the decline, claiming that it was a case of overcapacity in the shipping business rather than weak demand.
Now, nearly four years after this supposed situation arose, bulls want to believe that supply has yet to balance with demand despite tales of global growth.
An alternative interpretation, one that seems increasingly plausible, is that shipping prices remain soft because global demand is weak.
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People don't book freighters unless they have cargo to move.
~Howard Simons
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