Ambrose Pritchard-Evans is feeling a wee bit less sanguine these days:
Port statistics are revealing. They were a leading indicator before the production collapse in the Japan, Europe, and the US over the winter, and they may be telling us something again. Amrita Sen at Barclays Capital says the number of Baltic Dry ships waiting to berth — mostly in China and Australia — has begun to fall after peaking at 154 in mid-June. The Capesize Iron Ore Port Congestion Index (a new one for me, I must confess) is replicating the pattern seen a year ago just before the commodity boom tipped over.
At 3,100, the Baltic Dry Index is down more than 25 percent from 4,290 on June 3rd. This strikes me as being potentially more significant than all the happy talk and upwardly revised GDP numbers, especially since there’s little ability for speculators to bias the index with their expectations.
It strikes me that something just isn’t computing. The precipitous falls in shipping and steel production appear to be much greater than a mere 4 percent decline in GDP can possibly balance. I am beginning to get the impression that even if California is reduced to Mexican cannibals dwelling in hemp-built huts, the Bureau of Economic Analysis would report it as a modest decline in GDP with a recovery expected later in the year.