Monday, January 26, 2009

Early sign of global recovery

I've mentioned the Baltic Dry and Capesize Indices before, most recently here. These indices are published by the London-Based Baltic Exchange, and are designed to provide "an assessment of the price of moving the major raw materials by sea." The Capesize index is up about 150% from its low in early December. It covers only 10% of the world dry shipping fleet, but 62% of Dry Bulk Traffic. The global economy is showing increasing signs of life.


Donny Baseball said...

As always, appreciate the fine - more importantly, frequent - blogging. The Baltic Dry Index may or may not be a sign of global economic recovery. I hope it is. But it also may be a sign of massive Chinese stimulus getting going. A huge percentage of all sea-borne bulk trade is related to Chinese steel production. China is simply ahead of us in addressing the recession by building more infrastructure. I further hope that this is worthy investment that will bring China into the modern world, but I fear it is just more centrally planned spending.

jpnmitchell said...

Hello Scott!

I saw this article, and thought you would appreciate it:

I see your tip on TIPS from last October has held up very well. As always, thanks for all your great information, charts, and opinions. Lovely snow out here on the mid-atlantic east coast. Enjoy your balmy beach!


Scott Grannis said...

Donny: China is undoubtedly a big part of the global recovery story, but I don't think that diminishes the import of it. What's good for China is good for the world. They can't stop growing, and they will need to buy things from other economies in ever-increasing quantities. Central planning is not optimal, but the main driver of their growth is the horde of people who want to work.

Scott Grannis said...

JP: good article, thanks. A nice reminder of how the Obama stimulus plan could end up wasting hundreds of billions of taxpayer money by forcing the development of technologies that are not yet ready to stand on their own.