Key shipping index nearing Sept. 2008 highs

Regular readers of this blog know of the Baltic Dry Index (BDI), the key shipping number that tells you how much stuff is moving on the world's oceans in big boats.

The BDI is a measure of shipping costs for commodities. Simply: It's how much the mega cargo ship companies can charge for what they haul -- coal, wheat, metals and so on -- on boats that look like this.

The 265-year-old index soars upward when the global economy is humming, because shipping companies can raise their prices, as the demand for cargo ships outweighs the supply.

During a recession, when no one's buying things and no one's producing things, cargo ship companies are desperate for business and can't charge as much to use their ships. The BDI goes down.

The BDI peaked near mid-2008 then fell off a cliff as the economy collapsed during the fall and winter, bottoming out at the end of last year.

This morning, Miller Tabak equity strategist Peter Boockvar informs me, the BDI is up for the 13th straight day and is just shy of hitting its highest mark since Sept. 24, 2008.

"It is now up 535 percent off the Dec '08 low but still remains 64 percent off its record high in May '08," Boockvar writes.

-- Frank Ahrens
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