Thursday, August 27, 2009

The Debts of the World: Container Freight Rates Mirror Equity Volatility

Record volatility in the equity, fixed income, and credit markets is being echoed in the Baltic Dry Index. Shippers are apparently as confused by the situation as their counterparts in the financial services arena. This is what happens when central banks (namely the Fed) gives 0% loans and free cash to primary dealers and other connected Wall Street insiders to pump the highest beta (junk) stocks and credit. How else can you explain a 30-40% rise in high yield this year?

For my part, I continue to remain bearish on the prospect of an uptick in global trade.
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