The Baltic Dry Index or BDI, tracks "shipping freight rates" which can be used as a possible indicator for Economic Health, has been falling from a High of 4,209 on 26 May 2010 to about 2,351 on 1 Jul 2010.
Thus, a continuous fall in BDI might indicate that the economic outlook for year 2011 might be not as good as in year 2010...
Why Baltic Dry Index can possibly indicate Economic Health? Becos if Global Trade increased, demand for shipping increased, and thus freight rate rises, if trade decrease, demand for shipping is reduced, thus freight rate falls...
As of July 1st, 2010, Baltic Dry Freight Index settled at 2,351 points, 55 points down from June 30th..
In May of 2008 BDI hit its record high ever, 11,700 points, beginning its steep slope in mid-July. In Dec.5, 2008 it slumped to 663 pts, the Baltic Dry Index record low. In November, 2009 BDI gained 4661pts.
Baltic Dry Freight is an index reflecting changes in the value of the overseas shipments of basic commodities: metal, iron ore, coal and grain. The index includes three other indexes of freight rates, different sizes of ships for which they are calculated - Capesize, Supramax and Panamax. Dynamics of changes in BDI allows investors and market traders to analyze major trends in world demand and supply. Often the index is considered as the main indicator of future economic growth (if the index increases) or recession (if it falls), since the raw material on which the index is calculated, has a low potential for speculative operations.
What is Baltic Dry Index (BDI) how it might affect you?
Moderators: alvin, learner, Dennis Ng
What is Baltic Dry Index (BDI) how it might affect you?
Last edited by Dennis Ng on Sun Nov 20, 2011 10:05 pm, edited 1 time in total.
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Andy Xie warned of Double Dipping in year 2010 in yr 2009...
Imagine Andy Xie in Apr 2009 actually warned of a possible "double dipping" in year 2010....
Double dipping in 2010
Andy Xie April 11, 2009
At the beginning of 2009, I wrote that the global economy would stabilize in the second half and a bear market rally could start in the second quarter of 2009.
I thought that stagflation would be the dominant characteristic for the next few years. I am still sticking to the story.
The bear market rally began earlier than I expected. The reason was that major governments have been introducing subsidies for speculation. They believe that the main problems are liquidity and confidence. Hence, if investors or speculators are brought back in the game, the world economy could be back to a virtuous cycle again.
I think that this type of approach would lead to a second dip in 2010 Subsidizing risk taking does inflate asset prices, mainly stocks for now. However, the hope that rising stock prices will lead to economic revival will not be fulfilled.
We are in the middle of a debt bubble bursting. Rising asset prices lift economy through boosting borrowing for investment and consumption.
As the current levels of indebtedness are already too high, we won't see rising debt demand for consumption or investment. When the dream of a quick economic recovery is dashed, stock prices will slump again, which could expose more problems in the financial system and trigger a second dip in the global economy.
The world is amidst a burst after a speculative boom. Boom-burst cycle is quite frequent in history (see 'Manias, Panics, and Crashes: A History of Financial Crises' by Charles Kindleburger).
A synchronized global one is rare. The last one comparable to the current one was the boom-burst of 1920s and 30s. A synchronized global cycle requires trade and cross-border capital flow to be large. A synchronized global burst is difficult to overcome, because devaluation and export promotion no longer work.
If one country has a burst, it can devalue, boost exports, and make money from foreigners to reflate its financial system. East Asia came back this way from its banking crisis ten years ago. Policymakers are frustrated that their stimuli are not working so far.
The US government and the Federal Reserve have spent or committed $12 trillionto bail out its financial system. Its budgeted fiscal deficit for 2009 is $1.75 trillion (12% 0f GDP) but will probably surpass $2 trillion. ECB, Bank of England, and Bank of Japan have all cut interest rates tohistorical lows. Their governments are already running high fiscal deficits.
But, employment, business confidence, and consumer confidence continue to deteriorate around the world. Major economies probably suffered similar contraction in the first quarter of 2009 as in the last quarter of 2008. For the whole year of 2009, euro zone, the UK , and the US may contract by 4-5%.
Germany and Japan could contract by 7-8%. This sort of global economic collapse is unprecedented. Moreover, it is difficult to see how the world would grow again when the collapse is over.
If history is guidance, political crisis tends to follow such an economic collapse. When an economic crisis triggers a political one, it makes a quick economic recovery virtually impossible.
Out of desperation, governments are trying to support asset prices either directly or incentivizing reluctant speculators to play. Without understanding what governments are doing, most people think that things are either getting better or well soon. After all, shouldn't stock prices tell us about the future, according to theory (Unfortunately not true in practice when you really need it)?
The positive thinking is leading many to chase this market. This is a bear rally that will swallow many smart investors.
This phase of government policy-targeting asset prices began with the Fed's announcement for buying up to $1.15 trillion of treasuries, commercial and mortgage papers. It was targeting mortgage interest rate in order to stabilize property price. However, this sort of policy meant that the Fed knew what property price should be.
The US property price was 100% overvalued relative to income. After the bubble burst, it should go back. What the Fed is doing is to slow the adjustment and shift a big chunk ofthe adjustment through general inflation rather than property price decline. What the Fed is doing will impact the dollar for years to come.
The second part came with the Geithner plan for stripping toxic assets from the US 's troubled banks. Hank Paulson, Tim Geithner's predecessor, wanted to focus on stripping the bad assets off the banks too. His plan didn't fly because the market prices for the bad assets were too low for the banks to survive. Most banks have questionable assets more than twice their equity capital.
As these assets are trading at 30 cents on the dollar, if the toxic assets are sold at market price, most banks are bankrupt. This is why Hank Paulson shifted to injecting money directly into the banks first. The hope was that it would stabilize the financial system and the toxic asset prices would rise sufficiently for the banks to survive.
This hasn't happened. The Geithner Plan tries to boost the prices of toxic assets by subsidizing speculation. The centerpiece of the plan was offering government-guaranteed 6-1 leverage. If an investor risks one dollar, the plan caps his loss at one 1 but offers the reward equivalent to risking 7.The current toxic asset price is 30 cents on the dollar.
The price reflects the expected return on the bad asset. It is equivalent to 70% chance of bankruptcy and total wipeout for creditors and 30% chance of survival for the borrowers that support the assets.
Under the Geithner Plan, an investor that puts down one dollar can buy $7 worth of toxic assets. At the current price of 30 cents on the dollar, he could buy $23.3 of toxic assets. There is 30% chance that the investor gets $23.3 and, after paying off $6 of debt, and has $ 16.3 in income. There is 70% that he loses everything.
Hence, his expected income for his $1 investment is $16.3*0.3= $4.9. This plan should have boosted demand for toxic assets tremendously.
Indeed, based on the simple example above, investors should be willing to pay more than twice the current price. This would save the banks. For the investors in toxic assets, they reap rewards from the 30% of the performing asset bundles that they have bought and leave the 70% non performing ones to the taxpayers.
This 'beautiful plan' works by robbing taxpayers. But, the prices for toxic assets have not risen that much. Why? I think that the market doesn't think that the plan could work. The public opinions may torpedo it before it goes into implementation. If it goes ahead, the US Congress may pass retroactive laws to confiscate the profits from the investors who participate in this scheme. Essentially, the Geithner Planis giving speculators free money. But they are not taking it because they are terrified of the consequences.
The third piece is changing the mark-to-market rule. The Financial Accounting Standards Board of the US has changed its rule for accounting asset value. It now allows financial institutions to value their assets according to their 'judgment' rather than market price if they think that the market isn't working. Market may not value asset prices perfectly.But, who could do better?
This rule change is to allow the banks in trouble to stop reporting losses from asset quality deterioration. When this change happened, the share prices of the troubled banks rose sharply. The market was not just reacting to a superficial change.
The change is meaningful for the share prices. If the banks can name their prices for the assets on their books, they don't have to raise capital to stay in business. This means that they might make enough money over time to recapitalize.
Hence, the risk of their bankruptcy has declined. The increased survival chance has boosted their share prices. Shouldn't this be a good thing that banks don't go burst? Not necessarily so. Look at what happened in Japan . Its banks essentially didn't report their losses and tried to make money to recapitalize. It kept the economy down for ten years without succeeding in their getting out of capital shortfall.
The reality won't change with a change in the accounting rule. These banks know they don't have enough capital. Hence, they won't increase lending and will try to milk their existing assets for profits to recapitalize. They will be a drag on the economy for years to come.
The US seems to be copying from Japan . In addition to the US 's policies for targeting asset prices, most othermajor economies are encouraging their banks to lend. What does'encouraging' mean? Banks normally lend to maximize profits by balancing between risk and reward.
When governments encourage them to lend, it really means pressuring banks to lower standards, i.e., taking on more riskfor the same or less reward. This sort of policy is really to exchange non-performing loans in future for boosting demand today. The argument infavor such an approach is that, if every bank lends, the economy improves, which would decrease non-performing assets.
This sort of 'free lunch' thinking works temporarily by inflating another bubble. Of course, it will create a bigger mess in future. Reflating an asset bubble to support the economy is widely hoped for by distressed investors around the world. Policymakers, in addition to their concerns for economic weakness and political stability, are responding to investors' cry for help.
This is why we are seeing so many policies that are pumping air into a deflating bubble. It seems the air-pumping is working now. But, it won't last. As governments throw everything at it, more air is going in than coming out. But, government actions can't put in air on a sustainable basis. The air leakage will last with rising unemployment, falling corporate profits, and collapsing trade. I think that the air leakage will overwhelm government air pumping in 2010. Another major dip in asset prices is likely.
Further, I think that inflation will become a problem, which would cause treasuries and othergovernment bonds to drop. Government bonds are the last bubble to burst. Other asset prices will bottom when this bubble deflates. This force willreverse all the air that governments are putting in now. The global economy would have a second dip then. The debate over inflation or deflation has been raging on. The low bond yield suggests that the consensus is for deflation.
In September 2006 atthe IMF-World Bank annual meeting in Singapore I predicted a financialcrisis in 2007, economic crisis in 2008, and stagflation beyond. The lastprediction has not happened yet. What governments and central banks are doing have strengthened my conviction that stagflation will haunt the global economy for years to come.
Historically, the burst following a speculative boom is deflationary fortwo reasons. First, a speculative boom is investment biased. Hence, there is overcapacity during the burst, as the demand during the boom was exaggerated.
Second, bankruptcies of banks and production businesses drive up unemployment, which decreases demand and pushes more businesses into bankruptcies. This vicious cycle prolongs price decline. The current burst won't lead to sustained deflation for two reasons. First, the speculation was centered on unproductive assets like property and financial product. Automobile and electronics are two global industries with considerable overcapacity.
The automobile industry has had overcapacity for a long time. The problem was covered up by the credit bubble that exaggerated demand, as buyers were incentivized to change carsmore frequently with zero down-and-zero interest rate financing. The deflationary pressure would end with the bankruptcy of one or two major producers.
The deflation would last if governments prop up their autocompanies with taxpayers' money. At least the Obama government has shown unwillingness to do so.
The electronics industry is used to deflation. It is usually good deflation-rising productivity supporting declining price from that industry. What's going on now is not good deflation.
The drastic cuts ofcapital expenditure by global companies have caused a demand collapse forIT products. The pressure is causing the industry to cut back quickly.This industry is shrinking without government prodding.
The bad deflationin this industry will end quickly with capacity reduction. China's manufacturing expansion is also a source of overcapacity. When the Asian Financial Crisis depressed demand one decade ago, I thought China 's overcapacity was deflationary, because manufacturers in other countries would have match Chinese prices. Now is different.
Manufacturing prices are Chinese. Manufacturing value added has shrunk dramatically relative to the costs of raw materials. The manufacturing capacity in China is unlikely to sustain deflation. For example, three quarters of the cost for steel production are raw materials like iron ore and coking coal. The overcapacity in steel production can't sustain price decline of steel product. Second, the vicious cycle between bankruptcy, especially banks, and demand contraction is unlikely now.
Governments and central banks are propping up virtually every bank in the world. They are lending to industries to keep them afloat. The current dynamic suggests that a bottom for the global economy would be reached soon. As mentioned above, I thought it would be the first half of 2009. Now, with a second a second dip forecast, it would be likely in 2010.
Despite demand weakness, inflation could emerge through commodity inflation and labor unions pushing wage increase, the same factors in the 1970s. Commodity inflation is already visible as investors who are frightened of monetary expansion seek safe haven. Oil is back above $50/barrel despite demand collapse because so much money has flowed into exchange traded funds that buy oil.
As central banks keep printing money, more and more money will flow into commodities. I always believe that labor union is mostly demand driven. During prosperity labor unions are weak as a rising tide lifts everyone's living standard. When hard time hits, more people support union activism.
During economic stagnation, especially stagflation, without union power, average workers will see declining living standard. The national strikes in Franceand other European countries are a harbinger for what could come. I have argued above for a second dip in 2010 and stagflation beyond. I want to add some comments on the nature of bear market rallies. In a structural bear market that lasts for years stock markets can have big bounces from time to time. These bounces can be as big as 40% from bottom to top. Obviously, rallies of such size are mouthwatering. It is difficult for investors to stay on the side line. I am not against playing such bear rallies. But, one must remember that bear rallies are at best zero-sum games and often negative-sum games, i.e., making new lows after each bounce. One's profit is someone else's loss. Timing is everything in playing bear bounces. Getting in and out early are the basic principles.The most harmful behavior is chasing. After a rally of 30% has happened,it is very bad for your financial health to chase.
The last structural bear market happened in the 1970s and lasted for ten years. It is obviously difficult for investors to stay on the sideline fora decade. After all, how long does one live? This is why a structural bear market swallows more and more people through such rallies.
The ones that jump in later tend to be more patient and probably smarter. The last ones that perish in a structural bear market may have IQ over 200. I am afraid that the current bear market won't end until it brings down Warren Buffett.
Double dipping in 2010
Andy Xie April 11, 2009
At the beginning of 2009, I wrote that the global economy would stabilize in the second half and a bear market rally could start in the second quarter of 2009.
I thought that stagflation would be the dominant characteristic for the next few years. I am still sticking to the story.
The bear market rally began earlier than I expected. The reason was that major governments have been introducing subsidies for speculation. They believe that the main problems are liquidity and confidence. Hence, if investors or speculators are brought back in the game, the world economy could be back to a virtuous cycle again.
I think that this type of approach would lead to a second dip in 2010 Subsidizing risk taking does inflate asset prices, mainly stocks for now. However, the hope that rising stock prices will lead to economic revival will not be fulfilled.
We are in the middle of a debt bubble bursting. Rising asset prices lift economy through boosting borrowing for investment and consumption.
As the current levels of indebtedness are already too high, we won't see rising debt demand for consumption or investment. When the dream of a quick economic recovery is dashed, stock prices will slump again, which could expose more problems in the financial system and trigger a second dip in the global economy.
The world is amidst a burst after a speculative boom. Boom-burst cycle is quite frequent in history (see 'Manias, Panics, and Crashes: A History of Financial Crises' by Charles Kindleburger).
A synchronized global one is rare. The last one comparable to the current one was the boom-burst of 1920s and 30s. A synchronized global cycle requires trade and cross-border capital flow to be large. A synchronized global burst is difficult to overcome, because devaluation and export promotion no longer work.
If one country has a burst, it can devalue, boost exports, and make money from foreigners to reflate its financial system. East Asia came back this way from its banking crisis ten years ago. Policymakers are frustrated that their stimuli are not working so far.
The US government and the Federal Reserve have spent or committed $12 trillionto bail out its financial system. Its budgeted fiscal deficit for 2009 is $1.75 trillion (12% 0f GDP) but will probably surpass $2 trillion. ECB, Bank of England, and Bank of Japan have all cut interest rates tohistorical lows. Their governments are already running high fiscal deficits.
But, employment, business confidence, and consumer confidence continue to deteriorate around the world. Major economies probably suffered similar contraction in the first quarter of 2009 as in the last quarter of 2008. For the whole year of 2009, euro zone, the UK , and the US may contract by 4-5%.
Germany and Japan could contract by 7-8%. This sort of global economic collapse is unprecedented. Moreover, it is difficult to see how the world would grow again when the collapse is over.
If history is guidance, political crisis tends to follow such an economic collapse. When an economic crisis triggers a political one, it makes a quick economic recovery virtually impossible.
Out of desperation, governments are trying to support asset prices either directly or incentivizing reluctant speculators to play. Without understanding what governments are doing, most people think that things are either getting better or well soon. After all, shouldn't stock prices tell us about the future, according to theory (Unfortunately not true in practice when you really need it)?
The positive thinking is leading many to chase this market. This is a bear rally that will swallow many smart investors.
This phase of government policy-targeting asset prices began with the Fed's announcement for buying up to $1.15 trillion of treasuries, commercial and mortgage papers. It was targeting mortgage interest rate in order to stabilize property price. However, this sort of policy meant that the Fed knew what property price should be.
The US property price was 100% overvalued relative to income. After the bubble burst, it should go back. What the Fed is doing is to slow the adjustment and shift a big chunk ofthe adjustment through general inflation rather than property price decline. What the Fed is doing will impact the dollar for years to come.
The second part came with the Geithner plan for stripping toxic assets from the US 's troubled banks. Hank Paulson, Tim Geithner's predecessor, wanted to focus on stripping the bad assets off the banks too. His plan didn't fly because the market prices for the bad assets were too low for the banks to survive. Most banks have questionable assets more than twice their equity capital.
As these assets are trading at 30 cents on the dollar, if the toxic assets are sold at market price, most banks are bankrupt. This is why Hank Paulson shifted to injecting money directly into the banks first. The hope was that it would stabilize the financial system and the toxic asset prices would rise sufficiently for the banks to survive.
This hasn't happened. The Geithner Plan tries to boost the prices of toxic assets by subsidizing speculation. The centerpiece of the plan was offering government-guaranteed 6-1 leverage. If an investor risks one dollar, the plan caps his loss at one 1 but offers the reward equivalent to risking 7.The current toxic asset price is 30 cents on the dollar.
The price reflects the expected return on the bad asset. It is equivalent to 70% chance of bankruptcy and total wipeout for creditors and 30% chance of survival for the borrowers that support the assets.
Under the Geithner Plan, an investor that puts down one dollar can buy $7 worth of toxic assets. At the current price of 30 cents on the dollar, he could buy $23.3 of toxic assets. There is 30% chance that the investor gets $23.3 and, after paying off $6 of debt, and has $ 16.3 in income. There is 70% that he loses everything.
Hence, his expected income for his $1 investment is $16.3*0.3= $4.9. This plan should have boosted demand for toxic assets tremendously.
Indeed, based on the simple example above, investors should be willing to pay more than twice the current price. This would save the banks. For the investors in toxic assets, they reap rewards from the 30% of the performing asset bundles that they have bought and leave the 70% non performing ones to the taxpayers.
This 'beautiful plan' works by robbing taxpayers. But, the prices for toxic assets have not risen that much. Why? I think that the market doesn't think that the plan could work. The public opinions may torpedo it before it goes into implementation. If it goes ahead, the US Congress may pass retroactive laws to confiscate the profits from the investors who participate in this scheme. Essentially, the Geithner Planis giving speculators free money. But they are not taking it because they are terrified of the consequences.
The third piece is changing the mark-to-market rule. The Financial Accounting Standards Board of the US has changed its rule for accounting asset value. It now allows financial institutions to value their assets according to their 'judgment' rather than market price if they think that the market isn't working. Market may not value asset prices perfectly.But, who could do better?
This rule change is to allow the banks in trouble to stop reporting losses from asset quality deterioration. When this change happened, the share prices of the troubled banks rose sharply. The market was not just reacting to a superficial change.
The change is meaningful for the share prices. If the banks can name their prices for the assets on their books, they don't have to raise capital to stay in business. This means that they might make enough money over time to recapitalize.
Hence, the risk of their bankruptcy has declined. The increased survival chance has boosted their share prices. Shouldn't this be a good thing that banks don't go burst? Not necessarily so. Look at what happened in Japan . Its banks essentially didn't report their losses and tried to make money to recapitalize. It kept the economy down for ten years without succeeding in their getting out of capital shortfall.
The reality won't change with a change in the accounting rule. These banks know they don't have enough capital. Hence, they won't increase lending and will try to milk their existing assets for profits to recapitalize. They will be a drag on the economy for years to come.
The US seems to be copying from Japan . In addition to the US 's policies for targeting asset prices, most othermajor economies are encouraging their banks to lend. What does'encouraging' mean? Banks normally lend to maximize profits by balancing between risk and reward.
When governments encourage them to lend, it really means pressuring banks to lower standards, i.e., taking on more riskfor the same or less reward. This sort of policy is really to exchange non-performing loans in future for boosting demand today. The argument infavor such an approach is that, if every bank lends, the economy improves, which would decrease non-performing assets.
This sort of 'free lunch' thinking works temporarily by inflating another bubble. Of course, it will create a bigger mess in future. Reflating an asset bubble to support the economy is widely hoped for by distressed investors around the world. Policymakers, in addition to their concerns for economic weakness and political stability, are responding to investors' cry for help.
This is why we are seeing so many policies that are pumping air into a deflating bubble. It seems the air-pumping is working now. But, it won't last. As governments throw everything at it, more air is going in than coming out. But, government actions can't put in air on a sustainable basis. The air leakage will last with rising unemployment, falling corporate profits, and collapsing trade. I think that the air leakage will overwhelm government air pumping in 2010. Another major dip in asset prices is likely.
Further, I think that inflation will become a problem, which would cause treasuries and othergovernment bonds to drop. Government bonds are the last bubble to burst. Other asset prices will bottom when this bubble deflates. This force willreverse all the air that governments are putting in now. The global economy would have a second dip then. The debate over inflation or deflation has been raging on. The low bond yield suggests that the consensus is for deflation.
In September 2006 atthe IMF-World Bank annual meeting in Singapore I predicted a financialcrisis in 2007, economic crisis in 2008, and stagflation beyond. The lastprediction has not happened yet. What governments and central banks are doing have strengthened my conviction that stagflation will haunt the global economy for years to come.
Historically, the burst following a speculative boom is deflationary fortwo reasons. First, a speculative boom is investment biased. Hence, there is overcapacity during the burst, as the demand during the boom was exaggerated.
Second, bankruptcies of banks and production businesses drive up unemployment, which decreases demand and pushes more businesses into bankruptcies. This vicious cycle prolongs price decline. The current burst won't lead to sustained deflation for two reasons. First, the speculation was centered on unproductive assets like property and financial product. Automobile and electronics are two global industries with considerable overcapacity.
The automobile industry has had overcapacity for a long time. The problem was covered up by the credit bubble that exaggerated demand, as buyers were incentivized to change carsmore frequently with zero down-and-zero interest rate financing. The deflationary pressure would end with the bankruptcy of one or two major producers.
The deflation would last if governments prop up their autocompanies with taxpayers' money. At least the Obama government has shown unwillingness to do so.
The electronics industry is used to deflation. It is usually good deflation-rising productivity supporting declining price from that industry. What's going on now is not good deflation.
The drastic cuts ofcapital expenditure by global companies have caused a demand collapse forIT products. The pressure is causing the industry to cut back quickly.This industry is shrinking without government prodding.
The bad deflationin this industry will end quickly with capacity reduction. China's manufacturing expansion is also a source of overcapacity. When the Asian Financial Crisis depressed demand one decade ago, I thought China 's overcapacity was deflationary, because manufacturers in other countries would have match Chinese prices. Now is different.
Manufacturing prices are Chinese. Manufacturing value added has shrunk dramatically relative to the costs of raw materials. The manufacturing capacity in China is unlikely to sustain deflation. For example, three quarters of the cost for steel production are raw materials like iron ore and coking coal. The overcapacity in steel production can't sustain price decline of steel product. Second, the vicious cycle between bankruptcy, especially banks, and demand contraction is unlikely now.
Governments and central banks are propping up virtually every bank in the world. They are lending to industries to keep them afloat. The current dynamic suggests that a bottom for the global economy would be reached soon. As mentioned above, I thought it would be the first half of 2009. Now, with a second a second dip forecast, it would be likely in 2010.
Despite demand weakness, inflation could emerge through commodity inflation and labor unions pushing wage increase, the same factors in the 1970s. Commodity inflation is already visible as investors who are frightened of monetary expansion seek safe haven. Oil is back above $50/barrel despite demand collapse because so much money has flowed into exchange traded funds that buy oil.
As central banks keep printing money, more and more money will flow into commodities. I always believe that labor union is mostly demand driven. During prosperity labor unions are weak as a rising tide lifts everyone's living standard. When hard time hits, more people support union activism.
During economic stagnation, especially stagflation, without union power, average workers will see declining living standard. The national strikes in Franceand other European countries are a harbinger for what could come. I have argued above for a second dip in 2010 and stagflation beyond. I want to add some comments on the nature of bear market rallies. In a structural bear market that lasts for years stock markets can have big bounces from time to time. These bounces can be as big as 40% from bottom to top. Obviously, rallies of such size are mouthwatering. It is difficult for investors to stay on the side line. I am not against playing such bear rallies. But, one must remember that bear rallies are at best zero-sum games and often negative-sum games, i.e., making new lows after each bounce. One's profit is someone else's loss. Timing is everything in playing bear bounces. Getting in and out early are the basic principles.The most harmful behavior is chasing. After a rally of 30% has happened,it is very bad for your financial health to chase.
The last structural bear market happened in the 1970s and lasted for ten years. It is obviously difficult for investors to stay on the sideline fora decade. After all, how long does one live? This is why a structural bear market swallows more and more people through such rallies.
The ones that jump in later tend to be more patient and probably smarter. The last ones that perish in a structural bear market may have IQ over 200. I am afraid that the current bear market won't end until it brings down Warren Buffett.
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
The Baltic Dry Index: The Only Economic Indicator Worth Tracking Right Now
by Louis Basenese, Advisory Panelist, Investment U
Associate Investment Director, The Oxford Club
Wednesday, November 12, 2008: Issue #884
Forget unemployment. Inflation. Consumer confidence. Personal Incomes…
You can even ignore the ever-popular gross domestic product (GDP).
Most of the indicators that the market relies on to forecast the future are worthless in this type of environment. The truth is the data coming out of the traditional economic indicators isn’t current. By the time it’s being reported, the information is already weeks or even months old.
If you want to know when the global slowdown that’s erased $28 trillion in wealth (so far) will finally reverse course, pay attention to the obscure Baltic Dry Index. And nothing else. Here’s why…
What Is The Baltic Dry Index?
Despite the name, the Baltic Dry Index has nothing to do with markets in Lithuania, Latvia or Estonia. Instead, it’s all about the cost of shipping major raw materials. Like iron ore, coal, grain, cement, copper, sand and gravel, fertilizer, even plastic granules.
The value for the index is determined by the London-based Baltic Exchange, which traces its origins back to 1744. Each day, the exchange canvasses hundreds of brokers around the world for price quotes on moving goods. For instance: Shipping 100,000 tons of coal from South Africa to Japan, or 50,000 tons of iron ore from Australia to China. It then aggregates the quotes to form the Baltic Dry Index.
Basic economic principles of supply and demand explain the significance of the index…
The supply of cargo ships is tight and inelastic. It takes roughly two years to build a new cargo ship. And the high cost of each prohibits docking ships during slow periods. In other words, a change in cargo rates does not change the number of ships in operation. So even the slightest changes in demand for shipping raw materials results in a change in the index.
And because the index tracks the cost of shipping raw materials – the precursors of economic output – instead of intermediate or finished goods, it provides a precise and rare measurement of the volume of global trade at the earliest possible stage.
A sharp move up, means global trade is increasing. Conversely, a sharp move down, means it’s decreasing. Since global economic activity ultimately influences the equity markets, sharp moves in the Baltic Dry Index often predict and precede similar moves in the equity markets.
4 Reasons to Favor The Baltic Dry Index
Of course, there are other reasons to favor the Baltic Dry Index over other leading indicators, including:
No room for speculation. The index is not tradable, which means the only people booking cargo ships are those with actual cargo to ship. That makes the Baltic Dry Index, as economist Howard Simons put it, “totally devoid of speculative content.”
Not subject to revisions. Unlike almost every other piece of economic data, the Baltic Dry Index is not revised on a monthly or quarterly basis. The price is the price. And it’s completely reliable.
An inability to be manipulated. Governments, both here and abroad, love to “massage” economic data, especially inflation figures. Obviously, it’s difficult to base investment decisions off incomplete or “mostly” accurate data. But because of the way the Baltic Dry Index is measured, that’s simply not possible. Again, the price is the price. And it’s completely reliable.
Real-time, daily updates. We all know markets shift fast. And in turn, we need indicators able to reflect those sudden movements. At best, we only get weekly updates for other leading indicators. And all are backward looking. The Baltic Dry Index represents the only indicator with “real-time” updates. And such frequency dramatically increases its relevancy and value.
In light of the above, it doesn’t take a market maven to predict what direction the index’s been heading lately – practically straight down. Here’s the thing. The Baltic Dry Index started plummeting in early June, before the global equity markets went into a tailspin, proving its predictive abilities.
So if you’re looking for a clear indication of a market bottom, forget about any other leading indicator or popular convention. Just look for the Baltic Dry Index to start trending noticeably higher.
Good investing,
Lou Basenese
P.S. Here is a good resource to find out what the Baltic Dry Index is doing.
http://www.investmenttools.com/futures/ ... ex.htm#bdi
http://www.investmenttools.com/futures/ ... ex.htm#bdi
by Louis Basenese, Advisory Panelist, Investment U
Associate Investment Director, The Oxford Club
Wednesday, November 12, 2008: Issue #884
Forget unemployment. Inflation. Consumer confidence. Personal Incomes…
You can even ignore the ever-popular gross domestic product (GDP).
Most of the indicators that the market relies on to forecast the future are worthless in this type of environment. The truth is the data coming out of the traditional economic indicators isn’t current. By the time it’s being reported, the information is already weeks or even months old.
If you want to know when the global slowdown that’s erased $28 trillion in wealth (so far) will finally reverse course, pay attention to the obscure Baltic Dry Index. And nothing else. Here’s why…
What Is The Baltic Dry Index?
Despite the name, the Baltic Dry Index has nothing to do with markets in Lithuania, Latvia or Estonia. Instead, it’s all about the cost of shipping major raw materials. Like iron ore, coal, grain, cement, copper, sand and gravel, fertilizer, even plastic granules.
The value for the index is determined by the London-based Baltic Exchange, which traces its origins back to 1744. Each day, the exchange canvasses hundreds of brokers around the world for price quotes on moving goods. For instance: Shipping 100,000 tons of coal from South Africa to Japan, or 50,000 tons of iron ore from Australia to China. It then aggregates the quotes to form the Baltic Dry Index.
Basic economic principles of supply and demand explain the significance of the index…
The supply of cargo ships is tight and inelastic. It takes roughly two years to build a new cargo ship. And the high cost of each prohibits docking ships during slow periods. In other words, a change in cargo rates does not change the number of ships in operation. So even the slightest changes in demand for shipping raw materials results in a change in the index.
And because the index tracks the cost of shipping raw materials – the precursors of economic output – instead of intermediate or finished goods, it provides a precise and rare measurement of the volume of global trade at the earliest possible stage.
A sharp move up, means global trade is increasing. Conversely, a sharp move down, means it’s decreasing. Since global economic activity ultimately influences the equity markets, sharp moves in the Baltic Dry Index often predict and precede similar moves in the equity markets.
4 Reasons to Favor The Baltic Dry Index
Of course, there are other reasons to favor the Baltic Dry Index over other leading indicators, including:
No room for speculation. The index is not tradable, which means the only people booking cargo ships are those with actual cargo to ship. That makes the Baltic Dry Index, as economist Howard Simons put it, “totally devoid of speculative content.”
Not subject to revisions. Unlike almost every other piece of economic data, the Baltic Dry Index is not revised on a monthly or quarterly basis. The price is the price. And it’s completely reliable.
An inability to be manipulated. Governments, both here and abroad, love to “massage” economic data, especially inflation figures. Obviously, it’s difficult to base investment decisions off incomplete or “mostly” accurate data. But because of the way the Baltic Dry Index is measured, that’s simply not possible. Again, the price is the price. And it’s completely reliable.
Real-time, daily updates. We all know markets shift fast. And in turn, we need indicators able to reflect those sudden movements. At best, we only get weekly updates for other leading indicators. And all are backward looking. The Baltic Dry Index represents the only indicator with “real-time” updates. And such frequency dramatically increases its relevancy and value.
In light of the above, it doesn’t take a market maven to predict what direction the index’s been heading lately – practically straight down. Here’s the thing. The Baltic Dry Index started plummeting in early June, before the global equity markets went into a tailspin, proving its predictive abilities.
So if you’re looking for a clear indication of a market bottom, forget about any other leading indicator or popular convention. Just look for the Baltic Dry Index to start trending noticeably higher.
Good investing,
Lou Basenese
P.S. Here is a good resource to find out what the Baltic Dry Index is doing.
http://www.investmenttools.com/futures/ ... ex.htm#bdi
http://www.investmenttools.com/futures/ ... ex.htm#bdi
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
http://www.financialsense.com/contribut ... telling-us
Recovery? Baltic Dry Index Says Hold On
By Tim W Wood CPA04/20/2011
Just as with the stock market, I’ve maintained that the advance seen since the early 2009 lows, in other asset classes, are also counter-trend moves. This view has not changed and based on my research I believe that once these counter-trend bounces have run their course, the longer-term secular bear will again reassert himself. In doing so, I look for all asset classes to decline in conjunction with the phase II decline of the ongoing secular bear market, which I believe is similar to the 1966 to 1974 secular bear market.
It is widely believed that the economy has bottomed and that the worst is behind us. It is also widely believed that the Fed has every thing under control and that “they” will not let bad things happen to us. Well, they were also in “control” in 2000 and I would hope that you all remember the nearly 40% decline into the 2002 low. They were also in “control” in 2007 as the 54% decline seen by the Industrials began and it was not until the market and the economy hit their natural cyclical bottoms that these declines were halted. Of course, once the lows were made the Fed was credited for having saved the world. Fact is, the Fed is not in control. Rather, they react to the natural cyclical forces of the market. In doing so, their reactions ultimately only serve to make matters worse. As an example, it should be obvious that the reactions surrounding the decline into the 2002 low and the efforts to stimulate the economy into 2007 created not only the housing crisis and the rising commodity prices that were seen into the 2008 top, but also the credit crisis and the collapse which all made the decline into 2009 worse than the initial problem they were trying to solve in the first place. People want to think that someone is in control and that “they” won’t let this or that happen. Fact is, “they” are not really in control and all “they” do is react and in doing so, again, “they” only serve to make matters worse and I believe that this time is no different. As the markets moved down into the 2009 lows the Fed pulled out all the stops and have literally thrown the kitchen sink at keeping things afloat. But, fact is, the markets moved into their natural cyclical lows in 2009 and once these counter-trend bounces have run their course, we should see that once again, all “they” have done is to make matters worse.
Now I want to take a look at the Baltic Dry Index, which does not lend itself to speculation or manipulation as do stocks or commodities. This chart can be found below. In this chart I show data going back to 1985. I have identified the longer-term cycle that has historically averaged some 3 years from low to low. For a year now, the indications have been that this cycle has already peaked. For those who are not familiar with this index, I have copied the following documentation from Wikinvest.com.
baltic dry index
The Baltic Dry Index is a daily average of prices to ship raw materials. It represents the cost paid by an end customer to have a shipping company transport raw materials across seas on the Baltic Exchange, the global marketplace for brokering shipping contracts. The index is quoted every working day at 1300 London time. The Baltic Exchange is similar to the New York Merc in that it is a medium for buyers and sellers of contracts and forward agreements (futures) for delivery of dry bulk cargo. The Baltic is owned and operated by the member buyers and sellers. The exchange maintains prices on several routes for different cargoes and then publishes its own index, the BDI, as a summary of the entire dry bulk shipping market. This index can be used as an overall economic indicator as it shows where end prices are heading for items that use the raw materials that are shipped in dry bulk.
The BDI is one of the purest leading indicators of economic activity. It measures the demand to move raw materials and precursors to production, as well as the supply of ships available to move this cargo. Consumer spending and other economic indicators are backward looking, meaning they examine what has already occurred. The BDI offers a real time glimpse at global raw material and infrastructure demand. Unlike stock and commodities markets, the Baltic Dry Index is totally devoid of speculative players. The trading is limited only to the member companies, and the only relevant parties securing contracts are those who have actual cargo to move and those who have the ships to move it.
It is my belief that the weakness seen in the Baltic Dry Index is confirming my conclusions that the rallies out of the 2009 lows are likely counter-trend bear market affairs and not a result of strong fundamental growth nor of a sustained “recovery.” Through my research I have identified a very specific DNA Marker that has appeared at every single top in stock market history. I have also identified similar data for commodities and other indexes as well. Once the DNA Markers are in place, not only will the stock market be at great risk, but so will commodities and the economy as a whole. The key now will be the formation and confirmation of the DNA Markers to cap these rallies and this is all covered on an ongoing basis in the monthly research letters at Cycles New & Views. With this all said I want to warn you that just as the talking heads and politicians did not see or understand the setup that lead to the declines into the 2000 top lows or the 2007 top, they do not see nor do they understand the current environment and even if they did I can promise you that they would not tell you. For the record, I did have the advantage of my research and the DNA Markers to guide me during those periods. As a result, it did in fact allow me to identify not only the 2000 top in equities, months before it became obvious, but also the 2007 top in equities, the 2008 top in commodities and even the top in housing in 2005, all ahead of time. I sincerely hope that people are listening now. There is another downturn ahead of us.
Recovery? Baltic Dry Index Says Hold On
By Tim W Wood CPA04/20/2011
Just as with the stock market, I’ve maintained that the advance seen since the early 2009 lows, in other asset classes, are also counter-trend moves. This view has not changed and based on my research I believe that once these counter-trend bounces have run their course, the longer-term secular bear will again reassert himself. In doing so, I look for all asset classes to decline in conjunction with the phase II decline of the ongoing secular bear market, which I believe is similar to the 1966 to 1974 secular bear market.
It is widely believed that the economy has bottomed and that the worst is behind us. It is also widely believed that the Fed has every thing under control and that “they” will not let bad things happen to us. Well, they were also in “control” in 2000 and I would hope that you all remember the nearly 40% decline into the 2002 low. They were also in “control” in 2007 as the 54% decline seen by the Industrials began and it was not until the market and the economy hit their natural cyclical bottoms that these declines were halted. Of course, once the lows were made the Fed was credited for having saved the world. Fact is, the Fed is not in control. Rather, they react to the natural cyclical forces of the market. In doing so, their reactions ultimately only serve to make matters worse. As an example, it should be obvious that the reactions surrounding the decline into the 2002 low and the efforts to stimulate the economy into 2007 created not only the housing crisis and the rising commodity prices that were seen into the 2008 top, but also the credit crisis and the collapse which all made the decline into 2009 worse than the initial problem they were trying to solve in the first place. People want to think that someone is in control and that “they” won’t let this or that happen. Fact is, “they” are not really in control and all “they” do is react and in doing so, again, “they” only serve to make matters worse and I believe that this time is no different. As the markets moved down into the 2009 lows the Fed pulled out all the stops and have literally thrown the kitchen sink at keeping things afloat. But, fact is, the markets moved into their natural cyclical lows in 2009 and once these counter-trend bounces have run their course, we should see that once again, all “they” have done is to make matters worse.
Now I want to take a look at the Baltic Dry Index, which does not lend itself to speculation or manipulation as do stocks or commodities. This chart can be found below. In this chart I show data going back to 1985. I have identified the longer-term cycle that has historically averaged some 3 years from low to low. For a year now, the indications have been that this cycle has already peaked. For those who are not familiar with this index, I have copied the following documentation from Wikinvest.com.
baltic dry index
The Baltic Dry Index is a daily average of prices to ship raw materials. It represents the cost paid by an end customer to have a shipping company transport raw materials across seas on the Baltic Exchange, the global marketplace for brokering shipping contracts. The index is quoted every working day at 1300 London time. The Baltic Exchange is similar to the New York Merc in that it is a medium for buyers and sellers of contracts and forward agreements (futures) for delivery of dry bulk cargo. The Baltic is owned and operated by the member buyers and sellers. The exchange maintains prices on several routes for different cargoes and then publishes its own index, the BDI, as a summary of the entire dry bulk shipping market. This index can be used as an overall economic indicator as it shows where end prices are heading for items that use the raw materials that are shipped in dry bulk.
The BDI is one of the purest leading indicators of economic activity. It measures the demand to move raw materials and precursors to production, as well as the supply of ships available to move this cargo. Consumer spending and other economic indicators are backward looking, meaning they examine what has already occurred. The BDI offers a real time glimpse at global raw material and infrastructure demand. Unlike stock and commodities markets, the Baltic Dry Index is totally devoid of speculative players. The trading is limited only to the member companies, and the only relevant parties securing contracts are those who have actual cargo to move and those who have the ships to move it.
It is my belief that the weakness seen in the Baltic Dry Index is confirming my conclusions that the rallies out of the 2009 lows are likely counter-trend bear market affairs and not a result of strong fundamental growth nor of a sustained “recovery.” Through my research I have identified a very specific DNA Marker that has appeared at every single top in stock market history. I have also identified similar data for commodities and other indexes as well. Once the DNA Markers are in place, not only will the stock market be at great risk, but so will commodities and the economy as a whole. The key now will be the formation and confirmation of the DNA Markers to cap these rallies and this is all covered on an ongoing basis in the monthly research letters at Cycles New & Views. With this all said I want to warn you that just as the talking heads and politicians did not see or understand the setup that lead to the declines into the 2000 top lows or the 2007 top, they do not see nor do they understand the current environment and even if they did I can promise you that they would not tell you. For the record, I did have the advantage of my research and the DNA Markers to guide me during those periods. As a result, it did in fact allow me to identify not only the 2000 top in equities, months before it became obvious, but also the 2007 top in equities, the 2008 top in commodities and even the top in housing in 2005, all ahead of time. I sincerely hope that people are listening now. There is another downturn ahead of us.
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Re: What is Baltic Dry Index (BDI) and how it might affect y
Baltic Dry Index fell to 1,000 level, signaling to us the troubles ahead for Global Economies?
http://investmenttools.com/futures/bdi_ ... _index.htm
http://investmenttools.com/futures/bdi_ ... _index.htm
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Re: What is Baltic Dry Index (BDI) how it might affect you?
Some people are of the view that Baltic Dry Index rebounding soon. I don't think so after I read comments by APL (subsidiary of NOL).
click this link for the current Baltic Dry Index: http://investmenttools.com/futures/bdi_ ... _index.htm
APL SAID today it hopes to resist temptation to lay off ships because of the Far East/Europe box lane’s overcapacity.
The liner unit of Singapore's Neptune Orient Lines, which yesterday announced $478M in 2011 losses, has decided not to follow in competitor Maersk's footsteps by withdrawing ships from the route.
APL president Kenneth Glenn told reporters: "We have in the past, laid up vessels when market conditions warranted. It is not in our plans, at this time, to idle any assets.
“But of course, that's a situation we watch on a daily basis, depending on what happens with market conditions, fuel and rates. These are things we evaluate when the time requires."
APL is taking this stance even though NOL's CEO Ng Yat Chung is not optimistic that planned general rate increases will be successful.
Maersk has said it would trim 9% of its Far East-Europe capacity and keep its Triple-E orders at 20 ships.
Ng said that APL, being part of the recently formed G6 Alliance, would deploy capacity efficiently and for now, the alliance is committed to the six service loops that it is rolling out.
"The G6 Alliance is in my view, a very competitive product and with the fuel-efficient ships that each member will be deploying, our participation will improve our cost position. And if market conditions warrant it, the alliance may reduce the loops," said Ng.
About 750,000teu, or about 5%, of the global fleet is today idled. French consultancy Alphaliner said the figure must go up to around 1.5M teu or 10% of the fleet to make an impact on freight rates.
During the last recession, 12% of the fleet was idled, helping box shipping to return to profitability in 2010. APL SAID today it means to resist temptation to lay off ships because of the Far East/Europe box lane’s overcapacity.
MALAYSIAN carrier MISC posted 1.2Bn ringgit ($404.6M) in net losses for its latest financial year, reversing 2.4Bn ringgits profits a year earlier.
For the three months ending 31 December 2011, MISC, which exited the liner business in November, posted 1.65Bn ringgit in losses, reversing 1.58Bn ringgit in profits for the same period a year ago. Since April 2011, MISC’s financial year has been moved from 31 March to 31 December.
MISC said in a Bursa Malaysia filing yesterday evening that the loss was due to one-off provisions of 1.45Bn ringgit for quitting the box business and 287.2 M ringgit in impairment losses on its vessels. MISC, a Petronas subsidiary, quit the liner business to focus on its tanker and LNG operations after three years of losses.
Despite challenging and volatile market conditions for petroleum and chemical segments, MISC’s tanker segment recorded a 3.4% or 52.5M ringgit q/q increase in revenue in the three months ending 31 December.
MISC said: “Demand for shipping remains weak. The supply-demand imbalance will continue to further depress and add volatility to petroleum and chemical freight rates. However, the group's recent decision to cease its loss making liner business operations is expected to benefit the group in the medium- to long-term.”
Improved freight rates for chemical shipping have led to higher revenue in chemical business. Vessel utilisation remains high for petroleum and chemical businesses.
Stable revenue from long-term contracts enabled MISC’s LNG business to report equally healthy results when compared with the corresponding quarter.
MISC expects 2012 will remain challenging for as vessel oversupply is likely to persist well into the year.
Investors reacted to MISC’s loss. The Malaysian carrier’s stock opened at 5.74 ringgit today, down from its previous close of 5.80 ringgit on Wednesday. It closed at 5.61 ringgit today.
CIMB Securities’ analyst Raymond Yap is not hopeful that MISC can return to high profitability for this year, as operating costs will surge due to rising bunker prices.
“For MISC’s tanker segment, the losses should continue to expand when the VLCCs which are on profitable term charters expire within the next two years,” said Yap.
He expects MISC’s stock price to drop to 4.80 ringgit, adding that MISC’s provisions on vessel impairment have hit shareholders’ equity, reducing the value of the company.
“Should rates continue to fall, vessel prices are likely follow suit and we can expect further provisions,” said Yap. MALAYSIAN carrier MISC posted 1.2Bn ringgit ($404.6M) in net losses for its latest financial year, reversing 2.4Bn ringgits in profits a year earlier.
click this link for the current Baltic Dry Index: http://investmenttools.com/futures/bdi_ ... _index.htm
APL SAID today it hopes to resist temptation to lay off ships because of the Far East/Europe box lane’s overcapacity.
The liner unit of Singapore's Neptune Orient Lines, which yesterday announced $478M in 2011 losses, has decided not to follow in competitor Maersk's footsteps by withdrawing ships from the route.
APL president Kenneth Glenn told reporters: "We have in the past, laid up vessels when market conditions warranted. It is not in our plans, at this time, to idle any assets.
“But of course, that's a situation we watch on a daily basis, depending on what happens with market conditions, fuel and rates. These are things we evaluate when the time requires."
APL is taking this stance even though NOL's CEO Ng Yat Chung is not optimistic that planned general rate increases will be successful.
Maersk has said it would trim 9% of its Far East-Europe capacity and keep its Triple-E orders at 20 ships.
Ng said that APL, being part of the recently formed G6 Alliance, would deploy capacity efficiently and for now, the alliance is committed to the six service loops that it is rolling out.
"The G6 Alliance is in my view, a very competitive product and with the fuel-efficient ships that each member will be deploying, our participation will improve our cost position. And if market conditions warrant it, the alliance may reduce the loops," said Ng.
About 750,000teu, or about 5%, of the global fleet is today idled. French consultancy Alphaliner said the figure must go up to around 1.5M teu or 10% of the fleet to make an impact on freight rates.
During the last recession, 12% of the fleet was idled, helping box shipping to return to profitability in 2010. APL SAID today it means to resist temptation to lay off ships because of the Far East/Europe box lane’s overcapacity.
MALAYSIAN carrier MISC posted 1.2Bn ringgit ($404.6M) in net losses for its latest financial year, reversing 2.4Bn ringgits profits a year earlier.
For the three months ending 31 December 2011, MISC, which exited the liner business in November, posted 1.65Bn ringgit in losses, reversing 1.58Bn ringgit in profits for the same period a year ago. Since April 2011, MISC’s financial year has been moved from 31 March to 31 December.
MISC said in a Bursa Malaysia filing yesterday evening that the loss was due to one-off provisions of 1.45Bn ringgit for quitting the box business and 287.2 M ringgit in impairment losses on its vessels. MISC, a Petronas subsidiary, quit the liner business to focus on its tanker and LNG operations after three years of losses.
Despite challenging and volatile market conditions for petroleum and chemical segments, MISC’s tanker segment recorded a 3.4% or 52.5M ringgit q/q increase in revenue in the three months ending 31 December.
MISC said: “Demand for shipping remains weak. The supply-demand imbalance will continue to further depress and add volatility to petroleum and chemical freight rates. However, the group's recent decision to cease its loss making liner business operations is expected to benefit the group in the medium- to long-term.”
Improved freight rates for chemical shipping have led to higher revenue in chemical business. Vessel utilisation remains high for petroleum and chemical businesses.
Stable revenue from long-term contracts enabled MISC’s LNG business to report equally healthy results when compared with the corresponding quarter.
MISC expects 2012 will remain challenging for as vessel oversupply is likely to persist well into the year.
Investors reacted to MISC’s loss. The Malaysian carrier’s stock opened at 5.74 ringgit today, down from its previous close of 5.80 ringgit on Wednesday. It closed at 5.61 ringgit today.
CIMB Securities’ analyst Raymond Yap is not hopeful that MISC can return to high profitability for this year, as operating costs will surge due to rising bunker prices.
“For MISC’s tanker segment, the losses should continue to expand when the VLCCs which are on profitable term charters expire within the next two years,” said Yap.
He expects MISC’s stock price to drop to 4.80 ringgit, adding that MISC’s provisions on vessel impairment have hit shareholders’ equity, reducing the value of the company.
“Should rates continue to fall, vessel prices are likely follow suit and we can expect further provisions,” said Yap. MALAYSIAN carrier MISC posted 1.2Bn ringgit ($404.6M) in net losses for its latest financial year, reversing 2.4Bn ringgits in profits a year earlier.
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Re: What is Baltic Dry Index (BDI) how it might affect you?
Shipping Recovery Seen Delayed at Fearnley on Slowing Demand
By Isaac Arnsdorf - Jul 20, 2012
Rates for ships that carry dry-bulk commodities will recover later than previously estimated as demand for cargoes slows, according to Fearnley Securities.
Daily earnings for Capesizes, the largest ships hauling iron ore and coal, will average $14,000 next year and $16,000 in 2014, down from previous respective forecasts of $16,000 and $20,000, according to the investment-banking unit of Norway’s second-largest shipbroker. Rates for the vessels have been close to operating costs for about half a year, Lars Erich Nilsen, an analyst at Fearnley in Oslo, said today.
Global trade in dry-bulk raw materials will expand 4 percent this year, the least since 2009, according to Clarkson Research Services Ltd., a unit of the biggest global shipbroker. At the same time, outstanding orders at shipyards equal 23 percent of the current fleet, data from IHS Inc. show.
“Volume growth has been lower than expected for the last few months and supply growth stays at a high level,” Nilsen said by phone today. “There doesn’t seem to be a recovery in this market for quite some time.”
Panamaxes, which can carry about half as much as Capesizes, will earn $11,000 a day next year and $12,000 a day in 2014, Fearnley predicted, cutting its previous forecasts of $14,500 and $18,125.
By Isaac Arnsdorf - Jul 20, 2012
Rates for ships that carry dry-bulk commodities will recover later than previously estimated as demand for cargoes slows, according to Fearnley Securities.
Daily earnings for Capesizes, the largest ships hauling iron ore and coal, will average $14,000 next year and $16,000 in 2014, down from previous respective forecasts of $16,000 and $20,000, according to the investment-banking unit of Norway’s second-largest shipbroker. Rates for the vessels have been close to operating costs for about half a year, Lars Erich Nilsen, an analyst at Fearnley in Oslo, said today.
Global trade in dry-bulk raw materials will expand 4 percent this year, the least since 2009, according to Clarkson Research Services Ltd., a unit of the biggest global shipbroker. At the same time, outstanding orders at shipyards equal 23 percent of the current fleet, data from IHS Inc. show.
“Volume growth has been lower than expected for the last few months and supply growth stays at a high level,” Nilsen said by phone today. “There doesn’t seem to be a recovery in this market for quite some time.”
Panamaxes, which can carry about half as much as Capesizes, will earn $11,000 a day next year and $12,000 a day in 2014, Fearnley predicted, cutting its previous forecasts of $14,500 and $18,125.
Be happy, stay healthy & grow your savings wisely.
Re: What is Baltic Dry Index (BDI) how it might affect you?
thanks randwick for sharing this info.
Well, just take a look at the Current Baltic Dry Index here and see for yourself:
http://investmenttools.com/futures/bdi_ ... _index.htm
Don't just focus on the daily movement in stock markets, one day up 100 points, another day down 100 points, and you are so Blur and Confused and don't know what to do, sometimes you need to look at other things, especially on a Big Picture basis, (eg. Global Economic Outlook, Global Shipping Outlook) to have some clues on what the Stock Markets might do in the future...the stock market is ahead of the Economy, so we are NOT looking at the Current Economy, but also need to Form Views and Opinion on How Economy will look like 6 to 12 months in the future. Of course, one might not get it right all the time, but by now you should know you can be wrong 6 out of 10 times and still get Richer, once you know that, you will NOT be paralysed by fear and don't dare to take action (provided after doing your homework and you know how to Invest and What information/signals to look at), which comes from experience and cannot be ACHIEVED overnight after attending a 2-day seminar. Good news is I share my views daily, so you can have access to what are my thoughts, views and opinions (accumulated over 19 years of investment experience).
You are thus Leveraging on Other People's Knowledge and Experience (Dennis') and many other seminar graduates who share in this forum. Each person share more, everyone learns more. Please come forward to share in the forum.
Cheers!
Dennis Ng
Well, just take a look at the Current Baltic Dry Index here and see for yourself:
http://investmenttools.com/futures/bdi_ ... _index.htm
Don't just focus on the daily movement in stock markets, one day up 100 points, another day down 100 points, and you are so Blur and Confused and don't know what to do, sometimes you need to look at other things, especially on a Big Picture basis, (eg. Global Economic Outlook, Global Shipping Outlook) to have some clues on what the Stock Markets might do in the future...the stock market is ahead of the Economy, so we are NOT looking at the Current Economy, but also need to Form Views and Opinion on How Economy will look like 6 to 12 months in the future. Of course, one might not get it right all the time, but by now you should know you can be wrong 6 out of 10 times and still get Richer, once you know that, you will NOT be paralysed by fear and don't dare to take action (provided after doing your homework and you know how to Invest and What information/signals to look at), which comes from experience and cannot be ACHIEVED overnight after attending a 2-day seminar. Good news is I share my views daily, so you can have access to what are my thoughts, views and opinions (accumulated over 19 years of investment experience).
You are thus Leveraging on Other People's Knowledge and Experience (Dennis') and many other seminar graduates who share in this forum. Each person share more, everyone learns more. Please come forward to share in the forum.
Cheers!
Dennis Ng
randwick wrote:Shipping Recovery Seen Delayed at Fearnley on Slowing Demand
By Isaac Arnsdorf - Jul 20, 2012
Rates for ships that carry dry-bulk commodities will recover later than previously estimated as demand for cargoes slows, according to Fearnley Securities.
Daily earnings for Capesizes, the largest ships hauling iron ore and coal, will average $14,000 next year and $16,000 in 2014, down from previous respective forecasts of $16,000 and $20,000, according to the investment-banking unit of Norway’s second-largest shipbroker. Rates for the vessels have been close to operating costs for about half a year, Lars Erich Nilsen, an analyst at Fearnley in Oslo, said today.
Global trade in dry-bulk raw materials will expand 4 percent this year, the least since 2009, according to Clarkson Research Services Ltd., a unit of the biggest global shipbroker. At the same time, outstanding orders at shipyards equal 23 percent of the current fleet, data from IHS Inc. show.
“Volume growth has been lower than expected for the last few months and supply growth stays at a high level,” Nilsen said by phone today. “There doesn’t seem to be a recovery in this market for quite some time.”
Panamaxes, which can carry about half as much as Capesizes, will earn $11,000 a day next year and $12,000 a day in 2014, Fearnley predicted, cutting its previous forecasts of $14,500 and $18,125.
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Re: What is Baltic Dry Index (BDI) how it might affect you?
Hi Dennis,
Welcome! Besides observing the health of the shipping rates and BDI, I also make anecdotal observations...
Ever notice....
...the Saturday Straits Times recruitment section getting thinner and thinner....guess employers are not too keen to hire due to uncertain prospects.
...the advertisements for properties are splashed all over the newspapers for many months now....guess the price is going up or going down? The developers are running a business and they will price their products to the maximum buyers are able to withstand, ie, upside already priced in.
...more building contractors becoming property developers or other businesses turning to property development as a new source of revenue/profit. Newbies to the game signalling a top???
...the banks in US & Europe are starting to cut staffing levels...prospects can't be rosy.
Welcome! Besides observing the health of the shipping rates and BDI, I also make anecdotal observations...
Ever notice....
...the Saturday Straits Times recruitment section getting thinner and thinner....guess employers are not too keen to hire due to uncertain prospects.
...the advertisements for properties are splashed all over the newspapers for many months now....guess the price is going up or going down? The developers are running a business and they will price their products to the maximum buyers are able to withstand, ie, upside already priced in.
...more building contractors becoming property developers or other businesses turning to property development as a new source of revenue/profit. Newbies to the game signalling a top???
...the banks in US & Europe are starting to cut staffing levels...prospects can't be rosy.
Be happy, stay healthy & grow your savings wisely.
Re: What is Baltic Dry Index (BDI) how it might affect you?
just to add on the banking jobs, even some banks in SG are begining to shift some of their operations to other cheaper countries form what I heard. and many ppl working in banks (usually backend operations) are on contract instead of perm. Its like a permenet contract worker.randwick wrote:Hi Dennis,
Welcome! Besides observing the health of the shipping rates and BDI, I also make anecdotal observations...
Ever notice....
...the Saturday Straits Times recruitment section getting thinner and thinner....guess employers are not too keen to hire due to uncertain prospects.
...the advertisements for properties are splashed all over the newspapers for many months now....guess the price is going up or going down? The developers are running a business and they will price their products to the maximum buyers are able to withstand, ie, upside already priced in.
...more building contractors becoming property developers or other businesses turning to property development as a new source of revenue/profit. Newbies to the game signalling a top???
...the banks in US & Europe are starting to cut staffing levels...prospects can't be rosy.
Freelance Personal Trainer
http://johanngfitness.wordpress.com/
http://johanngfitness.wordpress.com/
Re: What is Baltic Dry Index (BDI) how it might affect you?
SOS message:
Hi All
"This forum will discontinue unless 30 participate to Give" http://www.masteryourfinance.com/forum/ ... =16&t=2690
please support by doing 3 charity work: and report in on the above forum
1. do a donation
2. tell them about this forum information able to enlightened them on crisis preparation
3. teach kids or children to be good by sharing what they have on their hands
4. Tell them about positive debts & negative debt difference
Hi All
"This forum will discontinue unless 30 participate to Give" http://www.masteryourfinance.com/forum/ ... =16&t=2690
please support by doing 3 charity work: and report in on the above forum
1. do a donation
2. tell them about this forum information able to enlightened them on crisis preparation
3. teach kids or children to be good by sharing what they have on their hands
4. Tell them about positive debts & negative debt difference
Re: What is Baltic Dry Index (BDI) how it might affect you?
More anecdotal information.....the HK expats are moving out, and smart money probably want to stay in cash rather than splurge on the unnecessary luxuries....
Used Lamborghinis Linger on H.K. Lots Amid China Lull
By Bloomberg News - Jul 29, 2012
Waiting lists for ultra-luxury cars in Hong Kong are getting shorter and used-car lots are cutting prices on Lamborghinis, Ferraris and
Bentleys in the latest sign of China’s slowdown.
At first glance, the numbers are deceiving: Sales of very expensive new autos surged 47 percent in the first six months, according to industry analyst IHS Automotive. Look more deeply, however, and another picture emerges, especially in the city’s used-car lots.
Dealers of such second-hand cars say job cuts and the worsening global economic outlook are creating uncertainty among the finance-industry and expatriate professionals who make up the bulk of their buyers. Morgan Stanley (MS), Citigroup Inc. (C) and Deutsche Bank AG are among firms with Asian headquarters in Hong Kong that are cutting jobs worldwide.
“The more expensive the car, the more dry the business,” said Tommy Siu at the Causeway Bay showroom of Vin’s Motors Co., the used-car dealership he founded two decades ago. Sales of ultra-luxury cars have halved in the past two or three months, he said. “A lot of bankers don’t want to spend too much money for a car now. At this moment, they don’t know if they’ll have a big bonus.”
Unlike Rolex watches, Gucci handbags and other luxury goods, Hong Kong’s car market hasn’t been distorted by the more than 28 million mainland Chinese who flocked to the city last year. Mainland shoppers spend 44 billion euros ($54 billion) on luxury goods while traveling overseas to locations such as Hong Kong and Europe, according to CLSA Asia-Pacific Markets.
‘True Look’
“In the car market, it’s not buying like watches,” said Booz & Co.’s Russo. “Here you are getting a true look at a category of product bought by Hong Kong buyers. It’s a pulse check on how Hong Kong residents view the stability of the financial system.”
The new-car figures look better because of some short-term developments. The release of the latest models from Ferrari and Lamborghini and the opening of the first Hong Kong showroom by McLaren -- maker of the 592-horsepower MP4-12C carbon-fiber coupe -- have given sales a bump. Meantime, depressed demand in Europe means a bigger allocation of new cars for Hong Kong dealers.
With the highest proportion of billionaires in the world, according to a Boston Consulting Group report released in May, Hong Kong has enough buyers unaffected by market conditions to keep new sales going, said Bill Russo, a Beijing-based senior adviser at Booz & Co.
‘Saying Something’
There were 273 new Bentleys, Lamborghinis, Rolls Royces, Ferraris, Aston Martins and McLarens sold in the six months to June 30, up from 186 in the first half of last year, according to Englewood, Colorado-based IHS. This outpaced the 23 percent gain in the U.S., the world’s richest nation, and the 40 percent jump in mainland China, the world’s biggest car market, IHS data show.
For these buyers, price isn’t an issue and settling for second-hand is not an option, Russo said.
“It’s the brand image and it says something about you,” said Russo, who was formerly Chrysler Group LLC’s China head. “Used-car buyers are more price sensitive and economic cycles will affect these shoppers more. They are paying for the cars with their income as opposed to their savings.”
The European debt crisis is slowing expansion in emerging markets including China, the International Monetary Fund said this month, when cutting its global economic growth forecast for next year to 3.9 percent from 4.1 percent.
Aspirational Buyers
Hong Kong’s economy eked out 0.4 percent growth in the first quarter, the slowest since escaping the recession caused by the 2008 global credit crisis. Average daily turnover on the city’s stock exchange, the world’s fourth biggest, was 22 percent lower in the first half than the corresponding period of 2011. Asia-Pacific takeovers have dropped 22 percent to $306 billion, according to data compiled by Bloomberg.
People shopping in the second-hand market are typically aspirational buyers who are more likely to sit it out rather than trade down when they can’t afford the brand they want.
“An uncertain economic outlook encourages consumers, particularly those without a buffer provided by sizeable financial assets, to pause on big-ticket purchases,” said Tom Rafferty, a London-based Economist Intelligence Unit analyst.
Vin’s Siu said the drop in high-end customers who typically account for 30 percent of turnover at his 300-lot business was the most important factor behind a 20 percent drop in total sales. Expatriates made up about 70 percent of customers, he said. “A lot of expats are leaving Hong Kong,” he said. “For every 10 who are leaving, two are coming.”
Mercedes Discount
To spur demand, dealers in pre-owned cars are slashing their prices -- together with how much they’re willing to pay sellers.
A yellow, 2011 Lamborghini Gallardo 550 recently listed for HK$2.88 million ($371,000) on second-hand car website 28car.com is about $830,000 cheaper than a new model -- chump change that would buy a new Mercedes E-Class Coupe to run the kids to school. A silver-gray 2011 Ferrari California with 980 kilometers (613 miles) on the clock is available for HK$2.68 million. That’s a 19 percent discount to a brand new 2012 vehicle, and HK$400,000 cheaper than a 2011 version sold by Ferrari’s official in-house used-car dealer.
“We started cutting prices at the beginning of the year to stimulate sales because the market was slow,” said Tony Chan, a director at GP Motors a short walk up the hill from Vin’s, adding that second-hand Ferraris and Bentleys are leaving the 30-lot dealership at half the speed of last year.
Someone looking to sell a 2009 Bentley Continental will have to accept HK$1.7 million, a third less than they would have received at the start of the year, Chan said.
In the basement automall beside Hong Kong’s Grand Hyatt hotel, trader Samuel Chui said he has stopped buying more cars.
“People want cash now, they don’t want the commodity,” said Chui, who reduced the number of car lots he rents from 15 to nine at the end of last year as business began to slow. “We’ve got plenty of stock and it’s not moving.”
To contact Bloomberg News staff for this story: Liza Lin in Shanghai at llin15@bloomberg.net
Used Lamborghinis Linger on H.K. Lots Amid China Lull
By Bloomberg News - Jul 29, 2012
Waiting lists for ultra-luxury cars in Hong Kong are getting shorter and used-car lots are cutting prices on Lamborghinis, Ferraris and
Bentleys in the latest sign of China’s slowdown.
At first glance, the numbers are deceiving: Sales of very expensive new autos surged 47 percent in the first six months, according to industry analyst IHS Automotive. Look more deeply, however, and another picture emerges, especially in the city’s used-car lots.
Dealers of such second-hand cars say job cuts and the worsening global economic outlook are creating uncertainty among the finance-industry and expatriate professionals who make up the bulk of their buyers. Morgan Stanley (MS), Citigroup Inc. (C) and Deutsche Bank AG are among firms with Asian headquarters in Hong Kong that are cutting jobs worldwide.
“The more expensive the car, the more dry the business,” said Tommy Siu at the Causeway Bay showroom of Vin’s Motors Co., the used-car dealership he founded two decades ago. Sales of ultra-luxury cars have halved in the past two or three months, he said. “A lot of bankers don’t want to spend too much money for a car now. At this moment, they don’t know if they’ll have a big bonus.”
Unlike Rolex watches, Gucci handbags and other luxury goods, Hong Kong’s car market hasn’t been distorted by the more than 28 million mainland Chinese who flocked to the city last year. Mainland shoppers spend 44 billion euros ($54 billion) on luxury goods while traveling overseas to locations such as Hong Kong and Europe, according to CLSA Asia-Pacific Markets.
‘True Look’
“In the car market, it’s not buying like watches,” said Booz & Co.’s Russo. “Here you are getting a true look at a category of product bought by Hong Kong buyers. It’s a pulse check on how Hong Kong residents view the stability of the financial system.”
The new-car figures look better because of some short-term developments. The release of the latest models from Ferrari and Lamborghini and the opening of the first Hong Kong showroom by McLaren -- maker of the 592-horsepower MP4-12C carbon-fiber coupe -- have given sales a bump. Meantime, depressed demand in Europe means a bigger allocation of new cars for Hong Kong dealers.
With the highest proportion of billionaires in the world, according to a Boston Consulting Group report released in May, Hong Kong has enough buyers unaffected by market conditions to keep new sales going, said Bill Russo, a Beijing-based senior adviser at Booz & Co.
‘Saying Something’
There were 273 new Bentleys, Lamborghinis, Rolls Royces, Ferraris, Aston Martins and McLarens sold in the six months to June 30, up from 186 in the first half of last year, according to Englewood, Colorado-based IHS. This outpaced the 23 percent gain in the U.S., the world’s richest nation, and the 40 percent jump in mainland China, the world’s biggest car market, IHS data show.
For these buyers, price isn’t an issue and settling for second-hand is not an option, Russo said.
“It’s the brand image and it says something about you,” said Russo, who was formerly Chrysler Group LLC’s China head. “Used-car buyers are more price sensitive and economic cycles will affect these shoppers more. They are paying for the cars with their income as opposed to their savings.”
The European debt crisis is slowing expansion in emerging markets including China, the International Monetary Fund said this month, when cutting its global economic growth forecast for next year to 3.9 percent from 4.1 percent.
Aspirational Buyers
Hong Kong’s economy eked out 0.4 percent growth in the first quarter, the slowest since escaping the recession caused by the 2008 global credit crisis. Average daily turnover on the city’s stock exchange, the world’s fourth biggest, was 22 percent lower in the first half than the corresponding period of 2011. Asia-Pacific takeovers have dropped 22 percent to $306 billion, according to data compiled by Bloomberg.
People shopping in the second-hand market are typically aspirational buyers who are more likely to sit it out rather than trade down when they can’t afford the brand they want.
“An uncertain economic outlook encourages consumers, particularly those without a buffer provided by sizeable financial assets, to pause on big-ticket purchases,” said Tom Rafferty, a London-based Economist Intelligence Unit analyst.
Vin’s Siu said the drop in high-end customers who typically account for 30 percent of turnover at his 300-lot business was the most important factor behind a 20 percent drop in total sales. Expatriates made up about 70 percent of customers, he said. “A lot of expats are leaving Hong Kong,” he said. “For every 10 who are leaving, two are coming.”
Mercedes Discount
To spur demand, dealers in pre-owned cars are slashing their prices -- together with how much they’re willing to pay sellers.
A yellow, 2011 Lamborghini Gallardo 550 recently listed for HK$2.88 million ($371,000) on second-hand car website 28car.com is about $830,000 cheaper than a new model -- chump change that would buy a new Mercedes E-Class Coupe to run the kids to school. A silver-gray 2011 Ferrari California with 980 kilometers (613 miles) on the clock is available for HK$2.68 million. That’s a 19 percent discount to a brand new 2012 vehicle, and HK$400,000 cheaper than a 2011 version sold by Ferrari’s official in-house used-car dealer.
“We started cutting prices at the beginning of the year to stimulate sales because the market was slow,” said Tony Chan, a director at GP Motors a short walk up the hill from Vin’s, adding that second-hand Ferraris and Bentleys are leaving the 30-lot dealership at half the speed of last year.
Someone looking to sell a 2009 Bentley Continental will have to accept HK$1.7 million, a third less than they would have received at the start of the year, Chan said.
In the basement automall beside Hong Kong’s Grand Hyatt hotel, trader Samuel Chui said he has stopped buying more cars.
“People want cash now, they don’t want the commodity,” said Chui, who reduced the number of car lots he rents from 15 to nine at the end of last year as business began to slow. “We’ve got plenty of stock and it’s not moving.”
To contact Bloomberg News staff for this story: Liza Lin in Shanghai at llin15@bloomberg.net
Be happy, stay healthy & grow your savings wisely.
-
candy_chia
- Investing Mentor
- Posts: 1731
- Joined: Sun Jul 17, 2011 11:36 am
Re: What is Baltic Dry Index (BDI) how it might affect you?
On 20 May 2008, the index reached its record high level since its introduction in 1985, reaching 11,793 points.
On 3 February 2012, the index had dropped 647 points, the lowest since 1986.
http://ycharts.com/indices/%5EBDIY
On 3 February 2012, the index had dropped 647 points, the lowest since 1986.
http://ycharts.com/indices/%5EBDIY
Dennis Ng wrote:The Baltic Dry Index or BDI, tracks "shipping freight rates" which can be used as a possible indicator for Economic Health.
Why Baltic Dry Index can possibly indicate Economic Health?
(1) Becos if Global Trade Increased, demand for shipping increased, and thus freight rate Rises,
(2) if trade Decrease, demand for shipping is reduced, thus freight rate Falls...
Baltic Dry Freight is an index reflecting changes in the value of the overseas shipments of basic commodities: metal, iron ore, coal and grain. The index includes three other indexes of freight rates, different sizes of ships for which they are calculated - Capesize, Supramax and Panamax.
Dynamics of changes in BDI allows investors and market traders to analyze major trends in world demand and supply.
Often the index is considered as the main indicator of
~~ future Economic Growth(if the index INCREASES)
~~~ or Recession (if it FALLS),
since the raw material on which the index is calculated, has a low potential for speculative operations.
Re: What is Baltic Dry Index (BDI) how it might affect you?
racoon12 wrote:SOS message:
Hi All
"This forum will discontinue unless 30 participate to Give" http://www.masteryourfinance.com/forum/ ... =16&t=2690
please support by doing 3 charity work: and report in on the above forum
1. do a donation
2. tell them about this forum information able to enlightened them on crisis preparation
3. teach kids or children to be good by sharing what they have on their hands
4. Tell them about positive debts & negative debt difference
I just saw this msg again, I have been doing this on a more consistent basis now (as I am sure everyone in this forum are) and I must say, not everyone we "preach" (for a lack of better word ) is appreciative. But then again, as long as even just one person change their life for the better, it is worth it.
one starfish at a time eh?
Freelance Personal Trainer
http://johanngfitness.wordpress.com/
http://johanngfitness.wordpress.com/
-
candy_chia
- Investing Mentor
- Posts: 1731
- Joined: Sun Jul 17, 2011 11:36 am
Re: What is Baltic Dry Index (BDI) how it might affect you?
Great sharing by ilovecck.
Personally, I feel that sharing on the forum is a good deed as it benefits more people & oneself. Sometimes, even simple act of offering a listening ear to those in distress may suffice as good deed.
Have become more appreciative of little acts of kindness bestowed by others, which really makes more contented & joyful than before.
Personally, I feel that sharing on the forum is a good deed as it benefits more people & oneself.
Sometimes, even simple act of offering a listening ear to those in distress may suffice as good deed. Have become more appreciative of little acts of kindness bestowed by others, which really makes more contented & joyful than before.
ilovecck wrote:
I just saw this msg again, I have been doing this on a more consistent basis now (as I am sure everyone in this forum are) and I must say, not everyone we "preach" (for a lack of better word ) is appreciative.
But then again, as long as even just one person change their life for the BETTER, it is worth it.
one starfish at a time eh?