Baltic Dry Index has Worst Week Since October 2008 - Blame China. Precursor to Loan Growth Slowing?
Submitted By Trader Mark
I continue to be amazed how the Chinese are dominating so many markets - if they say jump, the market jumps. If they back off, said market usually crumbles. [its-chinas-world-rest-of-us.html">May 13, 2009: Commodities - It's China's World: We Just Live in It] [Mar 23, 2009: FT.com - Chinese Stockpiling Spurs Copper Price Rally] [Feb 9, 2009: China and the Baltic Dry Index - What's Really Going On?]
Looks like this week was "break time" as the Chinese backed off on iron ore and coal. Since market participants are using the Baltic Dry Index as a "health of global trade" proxy (when in reality it has become a ward of the state of China) I wonder why no one is talking up the worst week in nearly a year? Ah yes, that would not fit into the mosaic of recovery... shhh.... I had to sneak this off the back pages of Bloomberg.com. BDI lost almost a fifth of its value in a week - have you been seeing that on CNBC? Just wondering? ;)
 Remember, good news is to be trumpeted, and bad news (or anything perceived as such) is to be ignored. ;) But lest you worry, with the index down so severely THIS week when it invariably rebounds it won't be ignored - it will be a lead story for 'reasons you need to buy stocks' on certain financial entertainment TeeVee stations.
- The Baltic Dry Index, a measure of shipping costs for commodities, had its worst week since October as Chinese demand for shipments of coal and iron ore slowed. The index tracking transportation costs on international trade routes today slid 135 points, or 4.6 percent, to 2,772 points, according to the Baltic Exchange. That took its weekly drop to 17 percent, the most since the end of October.
- “The Chinese have backed off and it’s starting to show in the number of shipments this month,” a Cape Town-based official at Island View Shipping SA, Africa’s biggest commodities shipping line, said by phone today. “Iron ore and coal seem to be slowing down.”
- China’s IND' ))">record coal and IND' ))">iron ore imports in the first half helped the index to advance as much as fivefold this year, reversing some of the record 92 percent collapse in 2008. Demand rose after the country’s government announced a 4 trillion yuan ($586 billion) stimulus package.
- The Baltic Dry Index has slumped 35 percent from this year’s high on June 3.
I am going to repeat what I said earlier today again - China's market started moving up before the rest of the world late this winter. China is coming off its worst week since February 2009. If China does not bounce next week let us begin to think about the implications - even if these questions are not convenient to the bull case. Now is this slowdown on imports at all related to the signs we are getting that loan growth is potentially ratcheting down after a massive sugar high in the 1st half of 2009? Or just a temporary respite as the Chinese negotiate on iron ore prices. Too soon to tell. But right now I am reading every article I can on the loan growth of China in 2nd half 2009. The story seems to change by the day but it is the most important variable in the world right now - their Super Keynesian policy has been the driver for much of the world's surge. I can't see them taking away the punch bowl already but don't lose track of it.... we're starting to get some interesting cross currents.
- China Construction Bank’s President Zhang Jianguo said new loans will fall by about 70 percent in the second half compared with the preceding six months, helping the nation’s second-largest bank avert a surge in bad debt.
- “We noticed that some loans didn’t go into the real economy,” Zhang, 54, said in an interview yesterday at the bank’s headquarters in Beijing. “I feel that some industries are expanding too rapidly. For example, housing prices are rising too fast, and housing sales are growing too fast.”
- Zhang’s comments add to evidence that Chinese banks may curtail credit after they advanced a IND' ))">record $1.1 trillion of new loans in the first half, almost equivalent to India’s gross domestic product last year.
- Excess capacity in some industries and a IND' ))">property bubble has led to increased risks for banks, Zhang said.
- The central bank said on Aug. 5 it would use “dynamic fine- tuning” and guide “appropriate” loan growth. The statement suggests the central bank will tighten monetary policy, said Galaxy Securities Co. chief economist Zuo Xiaolei. Construction Bank said last month it plans to follow the government’s monetary policy.
As always we're usually early here on Fund My Mutual Fund... ahem. [Feb 16 2009: Is China Pulling an Alan Greenspan?]
Now the Chinese are asking the same questions we proposed 3 months ago [May 27, 2009: How is China Spending their Stimulus Money; and How many Loans will go Bad?] We already know much of this money is going into the stock market [Jun 29, 2009: China Business News - $170B of Bank Loans Funneled into Stock Market], and now real estate - instead of the 'real economy'. Now the Chinese are looking in the mirror and admitting as much. Many of these loans rushed out will go bad over the coming year(s) - I am sure we will never hear the full story. Just as in the US we have a sugar high in China in the near term; when we'll look back sometime in 2010 I believe we'll see it much more clearly.
[Jul 28, 2009: FT.com: China Warns Over Asset Bubbles]
Did you like this article?
|
Recommended Online Finance Courses
|
$5000 Practice Forex Trading Account
Software and live rates provided by FXCM
|
liliHello,I'm Lily,the news
Hello,I'm Lily,the news you post is very useful for me, I am agree with this view, but I also have some of my own opinion about this.For myself,the stars blowing a wing about the Ugg Boots ,ugg boots sale unique material, so that it can be worn all year round.Ugg Classic Boots are hotsale in 2009 such as UGG Classic Short ,UGG Classic Tall,UGG Classic Mini, simple style and easy match with clothes are their greatest strengths,sure the UGG Ultra Short,UGG Ultra Tall,Ugg Bailey Button,UGG Classic Crochet, UGG Coquette Slipper,UGG Lo Pro Button,UGG New Style Boots,UGG Nightfall,UGG Sundance are also very hot.If you like to buy cheap ugg boots ,you can enter the www.uggboot.org ,in there you can find many uggs on sale.
Very great!wow,wow!The
Shop online for authentic
If you are looking for the
puma shoes |puma speed
london links links london
links london jewellery
links of london
love links jewellery
love links
links bracelet
links bracelets
links bracelets london
links bracelets cheap
links bracelets for men
links charms
links charms sale
love links charms
links jewellery
links of london usa
links of london sale
links of london wholesale
links jewellery sale
links jewellery wholesale
tiffany co
tiffany and co
tiffany rings
tiffany jewelry
tiffany & co
tiffany jewellery
tiffany engagement rings
engagement rings
tiffany uk
tiffany ring
tiffany ring on sale
tiffany ring for sale
tiffany ring for men
ugg bailey boots Ugg Bailey Button Boots Ugg Bailey Button ugg button boots Ugg Bailey UGG Classic Cardy boots Cardy boots UGG Cardy boots UGG Cardy sale ugg classic short sale ugg short boots ugg classic short ugg classic tall Boots ugg tall ugg tall boots ugg classic tall mbt m.walk peachblow
mbt lami
colt brennan jerseys
authentic saints jersey
pink nfl jerseys
jet jerseys
Adidas shoes are famous for
cheap nfl jerseys are what
GHD Hair Straightener and
Christian Louboutin Sale
Christian Louboutin Sale
As the climate is colder and colder, many more warm boots fight against cold. Christian Louboutin Boots avariable in worldwide, have become femininity, hight quality and nice design for women. So Christian Louboutin boots are very popular. Getting a pair of Christian Louboutin that is dream of every girl.
Christian Louboutin Shoes have peep toe, signature red leather sole will help you show your taste. They are sexy, gorgeous and fun. The designers ' national spirit, is " make shoes that are like jewels" and each unique design demonstrates an unparalleled degree of quality and a born sultriness. Christian Louboutin Shoes desined with leather lining,round toe, concealed platform,hidden heel and signature red sole,which will bring much confidence and comfort and make you more beautiful.
However, if you purchase online, you will find a couple of Christian Louboutin begins at a fraction of the price of the originally price, you should be aware that buy Christian Louboutin online can save your money. One began the discount Christian Louboutin and is payment have been offered in goodugg.net store.
Look at the Christian Louboutin! What a slender and graceful line! Ladies are crazy about it. If you are engaged in the vogue or you want keep the same pace with the trend. Christian Louboutin Sale could be your best choice.
This is the official
Introducing the
Site features catalog of
christian louboutin
mbt mbt trainers mbt
mbt trainers
mbt schuhe
mbt sale shoes
mbt sale
mbt shoe
mbt shoes review
mbt shoes clearance
walking shoes
mbt walking shoes
mbt shoes uk
mbt reviews
mbt shoes
mbt shoes on sale
cheap mbt shoes
mbt shoes for sale
anti shoes
mbt anti shoes
Cheap Coach Shoes Cheap Nike Shoes Coach Handbags Coach Shoes Coach Mens Shoes Coach Womens Shoes Gucci Shoes coach shoes outlet coach outlet coach shoes sale gucci shoes men gucci shoes gucci shoes 2009 gucci women shoes Nike Air Max Shoes Nike Air Max TN Shoes Air Max 2009 Nike Air Max 90 Shoes Everything dynamic and very positively! UGG Boots Cheap UGG Boots UGG Boots Sale UGG Boot UGG Boots Cheap UGGs on Sale UGG Classic Boots UGG Classic Short UGG Classic Tall UGG Classic Tall Boots UGG Classic Short Boots UGG Classic Cardy UGG Cardy UGG Cardy Boots UGG Cardy Sale Cheap UGG Cardy UGG Bailey Button Boots UGG Bailey UGG Bailey Button Cheap Uggs
mbt mbt trainers mbt
mbt trainers
mbt schuhe
mbt sale shoes
mbt sale
mbt shoe
mbt shoes review
mbt shoes clearance
walking shoes
mbt walking shoes
mbt shoes uk
mbt reviews
mbt shoes
mbt shoes on sale
cheap mbt shoes
mbt shoes for sale
anti shoes
mbt anti shoes
mbt chapa shoes
mbt m.walk grey
mbt m.walk pink
mbt m.walk black
mbt m.walk peachblow
mbt lami
mbt lami shoes
mbt lami sale
mbt lamis
mbt lami purple
mbt sport
mbt sport 2
mbt sport
mbt sport shoes
nike high dunk
dunk high
nike sb dunk
nike sb
dunk sb
nike dunk low
dunk low
nike dunk shoes
dunk shoes
nike dunk sb
nike dunk
nike sb high
nike dunk high
dunk sb high
dunk low sb
Nice contribution.
Rolex Air-King Oyster
Ugg Classic Tall Boots Ugg
replica watcheswatches for
watches for sale
watches replica
Bvlgari replica
Rolex Submariner watches
replica Tudor
Montblanc watches
Some butterfly knot in the
ugg boots uk discount ugg