I am going to take a break from the global warming issue to talk about the economy. Those who know me know that I do a lot of investing. While I claim no particular expertise, I do see some real problems right now with the economy that many, in this period when everyone is thinking the market has bottomed out. I don't know if the market has bottomed, no one does right now, but I do know this. If the economy is turning around, the world should be shipping more goods.
Most people don't know what the Baltic Dry Index is. That is an index which measures the cost of shipping product overseas. When there is lots of economic activity, the Baltic Dry Index is high, like it was last May at 11793. By December, the shipping index had fallen to 693! Ships were and still are parked all over Singapore and Hong Kong according to friends and family reports (my daughter-in-law is from Singapore and I used to live in China and have several friends in Hong Kong.
Now, by March 10, 2009, the Baltic Dry Index had risen to 2298, quite a rise from the low of 693. But, by today, the index had dropped to 1498, a 35% drop since March. If international business, and the shipping of products to customers over seas was improving, if the economy was actually improving, one has to ask why is the index for international economic activity declining again?
This also has implications for the price of oil. If no one is making goods (spending energy) and no one is shipping many goods (spending energy), the price of oil will continue to be weak for a while until the natural decline of the oil fields will bring supplies into balance with the demand.
Now back to global warming for a while.