Jump to content
House Price Crash Forum

Recommended Posts

^Thank you for the link. It is well worth reading that article.

Hmm, Does anyone hypothesize that the lowering of the oil price wasn't just for the Russians/IS, but also putting the reverse thrusters on the BDI?

bdi.gif

^ This chart updates, so for the future reference it is at 709 pts on 11th February 2015, lower than in 2008.

Dryships, which acts like the BDI is at 97c

---

If things aren't profitable to ship, then they won't be shipped at all.

The end of deflationary spirals is probably marked by periods of shortages, and no supplies. The price will rise as existing stocks are depleted, and only then, supply will come back. Have you all got everything you need?

Edited by 200p

Share this post


Link to post
Share on other sites

Commodity bubble and bust right there.

Quite beautiful isnt it.

Demand > supply 2005-2008

Supply > demand 2008--->

follows the classic bubble pro-forma / duration for bubble & bust. Commods, gold, silver and oil (only gold has yet to fully complete back to sub - $1000. Should occur as US yield curve starts to steepen again)

http://en.wikipedia.org/wiki/Jean-Paul_Rodrigue

Edited by R K

Share this post


Link to post
Share on other sites

^Thank you for the link. It is well worth reading that article.

Hmm, Does anyone hypothesize that the lowering of the oil price wasn't just for the Russians/IS, but also putting the reverse thrusters on the BDI?

bdi.gif

^ This chart updates, so for the future reference it is at 709 pts on 11th February 2015, lower than in 2008.

Dryships, which acts like the BDI is at 97c

---

If things aren't profitable to ship, then they won't be shipped at all.

The end of deflationary spirals is probably marked by periods of shortages, and no supplies. The price will rise as existing stocks are depleted, and only then, supply will come back. Have you all got everything you need?

I don't doubt the underlying message of falling commodity prices (I'm nursing losses on my Antofagasta shares!), but we need to be a bit careful with the Baltic index because it reflects many factors besides the demand for shipping. First is the supply of ships which has never been higher, and it also reflects the cost of shipping which is fast declining with oil costs.

Share this post


Link to post
Share on other sites

Commodity bubble and bust right there.

Quite beautiful isnt it.

Demand > supply 2005-2008

Supply > demand 2008--->

follows the classic bubble pro-forma / duration for bubble & bust. Commods, gold, silver and oil (only gold has yet to fully complete back to sub - $1000. Should occur as US yield curve starts to steepen again)

http://en.wikipedia.org/wiki/Jean-Paul_Rodrigue

gold, a monetary commodity, will track the real interest rate(inversely) in a free market. By that measure we should be at record gold prices. Iow we don't have a free market

Share this post


Link to post
Share on other sites

gold, a monetary commodity, will track the real interest rate(inversely) in a free market. By that measure we should be at record gold prices. Iow we don't have a free market

It does. You need to look at the 10yr real yield (10yr TIPS will do as a reasonable proxy. gold bubble very clear)

As the curve steepens again gold will tank. . Nothing surprising in this. 100% g/teed etc

Eventually gold will revert to $500-$700 long run avg of course.

Edited by R K

Share this post


Link to post
Share on other sites

It does. You need to look at the 10yr real yield (10yr TIPS will do as a reasonable proxy. gold bubble very clear)

As the curve steepens again gold will tank. . Nothing surprising in this. 100% g/teed etc

Eventually gold will revert to $500-$700 long run avg of course.

the average lifespan of a reserve currency is 100 years. Gold will go to infinity(dollar hyperinflation or repudiation) wrt the dollar before it gets to $200

Share this post


Link to post
Share on other sites

the average lifespan of a reserve currency is 100 years. Gold will go to infinity(dollar hyperinflation or repudiation) wrt the dollar before it gets to $200

Whatever.

Share this post


Link to post
Share on other sites

I don't doubt the underlying message of falling commodity prices (I'm nursing losses on my Antofagasta shares!), but we need to be a bit careful with the Baltic index because it reflects many factors besides the demand for shipping. First is the supply of ships which has never been higher, and it also reflects the cost of shipping which is fast declining with oil costs.

Apparently 2014 was Hamburg harbour's busiest year ever. That will also be specifically affected by german manufacturing and trade strength of course.

Share this post


Link to post
Share on other sites

"deflation" panic starting to ease up now. Will bottom over next few months (with noddy media cpi low headlines) and be forgotten by the autumn.

http://stockcharts.com/h-sc/ui?s=$TNX&p=D&yr=1&mn=0&dy=0&id=p61846764528

Well Carney may shake things up at inflation rrport which i think is tomorrow. I suppose it would be an opportunity to tell participants not to focus on CPI.

Share this post


Link to post
Share on other sites

I don't doubt the underlying message of falling commodity prices (I'm nursing losses on my Antofagasta shares!), but we need to be a bit careful with the Baltic index because it reflects many factors besides the demand for shipping. First is the supply of ships which has never been higher, and it also reflects the cost of shipping which is fast declining with oil costs.

Good point.

As the cost of shipping is low, perhaps the margins are healthy with the new lower oil price. There were some worries with Dryships, last year

DryShips plays down ‘going concern’ view from auditors
George Economou-led owner is confident of breathing space on loans worth almost $1.25bn that have covenant breaches

http://www.tradewindsnews.com/weekly/333231/dryships-plays-down-going-concern-view-from-auditors

Feb 2014

And more recently

DryShips' (DRYS) results were not strong in the third quarter. The company, however, reported some improvement in revenue, but its earnings were not up to the mark. However, its earnings beat analysts’ estimates. The company believes that it can improve its performance in the future on the back of positive trends in the market. It is now focused on maintaining a strong liquidity position. Let's take a look at its prospects

http://www.gurufocus.com/news/307477/dryships-improving-business-points-toward-better-times-in-the-long-run-

Jan 2015

Edited by 200p

Share this post


Link to post
Share on other sites

Apparently 2014 was Hamburg harbour's busiest year ever. That will also be specifically affected by german manufacturing and trade strength of course.

Weak Euro...not all bad news for the Germans! Its paid for re-unification.

Share this post


Link to post
Share on other sites

Now down 2.35% in one day ...down to 540.

Down nearly 31% this year and nearly nearly 51 % for the year to date.

http://www.bloomberg.com/quote/BDIY:IND

I remember that Robert Peston first reported a similar drop in 2008 as recalled below.

http://www.moneyscience.com/pg/blog/RobertPestonBlog/read/692092/what-is-baltic-saying-about-global-slowdown

Now those of you who have lived with me through the amazing ups and (mainly) downs of the global economy in the past decade may recall one of my proudest journalistic minutes: an appearance on the News at Ten in the autumn of 2008 when I sententiously declared that the then collapse in the Baltic was the canary in the coal mine, that it showed the banking crisis was turning into a global recession.

That was, of course, what was happening.

So should we be just as worried by this Baltic meltdown?

Well it certainly shows, as the oil price collapse does, that conditions in the world's most important manufacturing economy, China, are probably weaker than official stats indicate (no real revelation there, you may say).

But we cannot properly judge that weakness until the new year holidays and factory shutdowns are over.

That said, Baltic blues will be seized on as supporting evidence by those worried we are entering a new and depressed era of deflation.

2008 was a much more dramatic fall, but the BDI is much lower now than the bottom of 2008.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   215 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.