Shipping Indices Point to a Global Recovery

Both these measures of shipping costs for bulk commodities have strengthened meaningfully over the past two months. U.S. goods exports are up at a 34% annualized rate in the five months ended September and spot industrial commodity prices are up 33% from their lows of late last year.

Clearly, the wheels of global commerce are spinning back up. Skeptics continue to claim that this huge and pervasive rebound in activity and pricing is being driven by mindless Chinese stockpiling of commodities. I think it must go far beyond that. Everything I see is consistent with a global recovery in confidence, in demand, and in production.

Accommodative monetary policy undoubtedly is playing a role here, but for now I view it more as facilitating the recovery in confidence that is necessary to get things going. At the end of last year, the world's investors and businesses were frozen by the terror of counterpary risk, and the demand for money was almost overwhelming. This demand desperately needed to be satisfied by the world's central banks, and they have complied. Now that things are back on track, however, they should start to reverse their massive liquidity injections. The longer they wait, then the greater the risk that the upturn in demand that we are seeing will get blown out proportion by speculation.

Comments

[User 488834:]

Everything points to a global recovery for this guy!!! ...well not everything because he appears too lazy to do any research. Instead we get the same sort charts recycled.

In this set notice how he uses a logarithmic y axis to give the illusion of a large recovery.

He thinks commodity prices are up due to demand. WRONG. This is a pundit who has apparently never heard of US dollar weakness, carry trade, zero interest rates etc.

Export are up! Yeah right. Export of goods: Sept 2008 106 bill, Sept 2009 91.4 bill. Imports of goods: Sept 2008 180.2 bill, Sept 2009 141.2 bill.

There is a line where optimism ends and misinformation begins. He continues to cross it.

Nov 13 04:35 PM

[calafia_beech:]

I guess you haven't read this then pal:

www.bloombergnews.com/...

Demand is as weak as your articles.

Nov 13 05:37 PM

[Archman Inv...:]

Typical BS Calafia Beach Pundit article.
Just remember this: Scott Grannis aka Calafia Beach Pundit, and all his buddies (Larry Krudlow, Dr. Mark Perry, Brian Wesbury et al) have not a care in the world. They are all wealthy beyond imagination. It is so easy for them to "talk" about recoveries, rationalize all news as good news, etc, because they themselves will never worry about money, feeding their families, nor getting out of debt. They have not a care in the world, while 20% of Americans are unemployed, another 20% on welfare on top of the average American family who earns $45K per year and is 120% in debt.

Nov 13 06:28 PM

[j-dub:]

The three rules of pundithood:

1) If it's bad, throw it out.

2) If it's less worse, scream and shout.

3) Using half @$$ed research, tout, tout, tout.

Nov 13 09:40 PM

[calafia_beech:]

On Nov 13 06:28 PM Archman Investor wrote:

> Typical BS Calafia Beach Pundit article.


It's a shame we can't vote on articles on this site. It would be nice to be able to send a message to SA that Grannis writes drivel.


However it wouldn't surprise me if he is actually one of the owners. His articles get published within minutes of submission and he is often listed as an editors pick even though his articles are mindless handwaving. Also he never discloses his financial positions. Is he simply a market pumper?


> Just remember this: Scott Grannis aka Calafia Beach Pundit, and all
> his buddies (Larry Krudlow, Dr. Mark Perry, Brian Wesbury et al)
> have not a care in the world. They are all wealthy beyond imagination.
> It is so easy for them to "talk" about recoveries, rationalize all
> news as good news, etc, because they themselves will never worry
> about money, feeding their families, nor getting out of debt. They
> have not a care in the world, while 20% of Americans are unemployed,
> another 20% on welfare on top of the average American family who
> earns $45K per year and is 120% in debt.

Nov 14 08:55 AM

[sako shooter:]

10 percent of global shipping capacity sits idle and the weak dollar is driving commodity prices. Good grief. I should have been an economist. Who in the world would pay this guy for advice?? I suspect he is part of the Wall Street cabal attemping to draw dumb money into the market so the smart money will finally have someone other than themselves to trade with, and then bolt.

Nov 14 01:46 PM

[Pax Americana:]

As an impartial observer of the above comments and the main Article, may I suggest you refrain from personal invective, towards this contributor and concentrate on the data, which can be manipulated in manifold ways to make a case for onside or the other. Imho, their are suggestions of Economic recovery, although weak if we consider the recent emergence of France and Germany, and China's improved trade figures.

Nov 15 08:43 AM

[Wildebeest:]

On Nov 15 08:43 AM Pax Americana wrote:

> As an impartial observer of the above comments and the main Article,
> may I suggest you refrain from personal invective, towards this contributor
> and concentrate on the data, which can be manipulated in manifold
> ways to make a case for onside or the other.

The comments above probably need to be seen in the context of serial misinterpretations of data in article after article. There are many writers on SA that I disagree with but respect the effort they take in making their case, even though I have a different view. With Mr Grannis some of the conclusions he draws in his artlcles beggar belief. It seems at least some others feel the same way.

Since I cannot add charts to my comments I have made an instablog to rebutt the stuff in this article:

seekingalpha.com/insta...

Imho, their are suggestions
> of Economic recovery, although weak if we consider the recent emergence
> of France and Germany, and China's improved trade figures.

I can't speak for other commenters but for me the question--in the context of this article-- is not whether their are ANY signs of green shoots, but whether the scant data Mr Grannis continually uses point to green shoots.

Nov 15 11:24 AM