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December trade data released today showed continued outright declines in both imports and exports. That's old news, of course. We know that global economic activity almost ground to a halt in the last three months of 2008. Since then, it looks like activity is on the rebound, and this chart is the best indicator I've seen of that. This measure of shipping costs has risen 337% from its early December low, and in percentage terms (i.e., using a log scale for the y-axis) has recovered about half of its losses. This may be purely due to the Chinese making aggressive purchases of raw materials from other countries, but nevertheless it is a sign of a significant reversal of the weakness that prevailed late last year. Meanwhile, the more inclusive Baltic Dry Index is up 200% from its lows. Fascinating!
Wednesday, February 11, 2009
Baltic Capesize Update
December trade data released today showed continued outright declines in both imports and exports. That's old news, of course. We know that global economic activity almost ground to a halt in the last three months of 2008. Since then, it looks like activity is on the rebound, and this chart is the best indicator I've seen of that. This measure of shipping costs has risen 337% from its early December low, and in percentage terms (i.e., using a log scale for the y-axis) has recovered about half of its losses. This may be purely due to the Chinese making aggressive purchases of raw materials from other countries, but nevertheless it is a sign of a significant reversal of the weakness that prevailed late last year. Meanwhile, the more inclusive Baltic Dry Index is up 200% from its lows. Fascinating!
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7 comments:
66.67% retracement before another down leg? ;)
This peice from the Cato institute is absolutely spot on. Everytime we rush into policy, the outcome is disasterous. History never lies.
http://www.cato.org/pub_display.php?pub_id=9951
Scott,
Many thanks for your insightful posts.
Do you have an explanation for the apparent contradiction in the comparison of employment in the current recession to the 1981 recession posted here:
http://woodwardhall.wordpress.com/2009/02/07/employment-crosses-the-line/
and your ongoing series of unemployment comparisons to previous recessions? Your analysis indicates that the current recession while bad is at present no worse than the 1991 recession while the Woodward and Hall analysis seems to demonstrate that the current recession is tracking the severe 1981 recession closely and will likely surpass it in the coming months if current trends continue.
Again thanks for the public service you provide with your clear and timely economic commentary.
Kirby
Bernard: thanks for the Cato link. Niskanen is absolutely correct. We can only hope that the coming mess will prove to be the end of liberalism and the rise of more prudent government.
Kirby: there are several ways to measure how bad the employment situation is today relative to previous recessions. The link you post says that job losses this time around are just about as bad as they were in the 81-82 recession, if we focus on the speed with which job losses have occurred. Total job losses to date have been only 2.2%, whereas total job losses were 3.1% by the end of the 81-82 recession.
My earlier post that compared unemployment claims to total jobs showed that layoffs as a percent of the workforce are not nearly as bad this time as they were in 82.
Until we know that this recession has ended, I don't think it is particularly instructive to label this the worst recession. I've only tried to point out that by some criteria this is not yet the worst. I'm trying to counter the media and Obama hype about how this is potentially catastrophic.
Obama needs to temper his comments about the economy. But, he's probably working to incite more fear in order to get his agenda passed.
It's a good thing he's not reverting to the politics of fear that he so often criticized!
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