FT: Is Baltic Dry a harbinger of doom?

The pubs and coffee shops of Britain are probably not full of chat about the Baltic Dry index. But it is worth a look all the same, as the index tracks the cost of moving raw materials by sea. It is thus a rough-and-ready guide to global trade activity, although of course it is also affected by shipping capacity. The index is very volatile. In the summer of 2008, it was hovering around the 12,000 level. It then suffered a dramatic plunge that took it below 1,000 around the turn of the year. There then followed a sharp rise, with the index hitting 4,000 by June, as hopes grew for economic recovery. A tax break for homebuyers will end in November, but already there are signs of another slowdown in home sales.