Jan 9, 2012 0
A puzzling and precipitous divergence
Its been a few months of good (or rather better) news on the employment front – the employment situation being a lagging indicator implies that the economy is on the mend and has been so for a few months. So what is the divergence then? See here below:
This is the Baltic Dry Index (BDI). You can see the steady build up that kicks off in August 2011 and continues till about Nov 2011. After that, it drops precipitously going into 2012. Now isn’t that a puzzling divergence? Well, it isn’t if you think that the general economy is going to tank again but can you really say that with today’s picture, today’s expectation – rosy getting rosier?
Well, at the very least I get to check whether the BDI is any good as an indicator?