BalticDryBearMarketIndex
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As much as we loathe saying "we told you so" – especially when it relates to highlighting the fallacious bullshit of one James Cramer – the truth is that just 3 weeks ago we pointed out the fact that the Baltic Dry Index was being heralded as proof of China’s (and therefore the world’s great recovery) was a mistake. At the time, wenotedthetemporarynatureofthemoveandnowforwardmarketsindicateditwasnotsustainable; and of course, were met with a chorus of deniers. Well, following a 4.4% decline today, the BalticDryIndex has nowplungedover 20% fromitsrecentpeak (andthe more crucial Capesizecontainerrateseven more) as underlying demand simply cannot keep pace with the massive (overbuilt) ship glut that remains. Added to this is the apparent ‘tightening‘ stancebythePBOCthatwehavebeennotingandwesuspect, as wewarned, the 2011 deja vus will be clear.

Chart: Bloomberg

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