Fellow contrarians know that we’ve been following the Baltic Dry Index as a leading indicator of the Reflation Rally for some time now…in fact, we’ve been watching it with a wary eye all the way since last August!
Well, topping processes can often be long, drawn out events. It looks like this has come to pass as far as the BDI is concerned. Zero Hedge’s Tyler Durden reports:
The Baltic Dry index, which is the closest proxy for China’s bubbleliciousness, has dropped to one month lows, and continues accelerating its drop to the downside. The dry bulk shipping sector, which was the bubble of late 2007 and early 2008, does not appear poised to make a repeat appearance just yet. As concerns over commodity overstocking in China, and Australian extraction concerns courtesy of the recent supertax, keep investors awake at night, is CNBC’s “favorite” index about to retrace its 2009 lows?
You can read Tyler’s full analysis of the Baltic Dry Index – including one damning chart that says it all – here.
Hat tip to fellow deflationist Carson for the link!
More leading indicators we like to follow:
- Dr. Copper – Who may have eaten some bad Chinese food!
- Commodities in general – the trend is now DOWN.
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