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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: johnlw who wrote (47446)	1/31/2012 10:34:15 AM
From: robert b furman	1 Recommendation Respond to of 70309

BDI is being depressed due to a glut of new AND EXISTING TANKERS. STACKED LIKE CORD WOOD FOR MILES OUTSIDE HONG KONG Korean shipyards over built and Euro banks are sweating their over financing. Its excess capacity and will go low much like dot.com bomb. There are several reports out on surplus ships. Bob

To: johnlw who wrote (47446)	1/31/2012 12:54:59 PM
From: Johnny Canuck	Read Replies (2) \| Respond to of 70309

I agree with what Bob has posted. There is an over supply of ships right now that have to be worked through. Keep in mind the BDI refers to the shipment of dry goods not oil tanker traffic or other liquid products and as the name say it refers to the Baltic region which is essentially Europe. With an oversupply of ships and weak economic activity in Europe I would expect the index to be at an all time low. I think the thinking of using the index to measure worldwide trade comes from the fact that ships can be re-tasked for shipping outside of the Baltic regions which has an effect on day rates. I don't know if there is a 1 to 1 relationship as some ships are locked into long term contracts. If BALT, which is dependent on the spot price of day rate, is any indication day rates have fallen by half in the last year.