leading indicators

The crash of the leading indicators

Before you have a finished product you have a commodity, and before that commodity becomes a finished product it has to be shipped to market. That's why the Baltic Dry Index is a leading indicator.

The index of freight rates on international trade routes fell 38 points, or 2 percent, to 1,902 points today, according to the London-based Baltic Exchange. Today’s drop was the 31st straight decline. That’s the longest since the 34 sessions to Aug. 15, 2001, according to Baltic Exchange prices. Charter rates for all types of ships tracked by the exchange fell.
“We don’t see anything in the next two to three weeks that’s going to turn the market around,” Guy Campbell, head of dry bulk at Clarkson Plc, the world’s largest shipbroker, said by phone.

While the Baltic Dry Index hasn't fallen nearly as far as it did in 2008, it is falling faster than it did in 2008. It has collapsed by over 50% since May.