baltic dry index falls 93%, page-22

I read a story in the FT recently about Somali pirates, but they also had some interesting points about shipping quantities in the Suez canal as Egyptians are very concerned about the local piracy as they do not want the piracy around Africa to effect the quantity of traffic through the Suez canal since they derive a lot of income from this traffic.

Anyway, long story short, the top guy at the Suez canal authority or something like that said that in the last year due to credit crunch, recession etc. that traffic (big transport ships) through the canal had slowed by about only 10%.

I have no idea how traffic around Suez relates to traffic around other shipping lanes around the globe, however I would assume what effects Suez would effect the rest of the world to a similar proportion.

So a first person account says a drop of ~10% in global shipping, as opposed to a drop of 90% in the BDI.

Then through in problems with credit and you may be opening up a world of problems for what an old index is capable of adequately measuring.

So what I would propose from these observations is that the BDI is extremely sensitive to fractional changes in over or under supply. And hence is very volatile in times like this.
It's just as likely that a slight pick-up in global traffic will produce a massive rally in the BDI.

I don't think the world is as bad (or was as good) as what the BDI shows. And the media loves a sensational headline to sell a story, just for their ego's sake.

Anyway I'm an optimist, bears are just depressing.

choice