Thursday, February 12, 2015

"It's like a tax-cut for the world's freight shippers..."

Sarcasm and wit to a point, ZH nails the crashing BDI again:


As I blogged about it earlier, a crashing BDI is a bad sign for the global economy.

All that bullshit you hear on TV about lower oil prices equating to extra cash and margins for consumers and companies? Yeah, it's bullshit. (probably)

The market is schizophrenic and it can't decide if lower oil is good or bad for the economy.

Methinks: Slightly lower oil? Good for the economy. Crashing oil? Bad for the economy.


Since I went away for holiday, crude has blasted off about $10 reaching up to $54pb from $44pb. Quite a few people were fishing for the bottom to be in at that $44, but I have some nagging doubts about it.

As mentioned before, tops and bottoms are usually extremes, and we haven't seen any extreme fear in oil yet. On the contrary, we have been seen a lot of brave young men put on their finest knife catching gear and head out into the field to catch them some knives. I don't want to sound sadistic, but in my experience, it's not so simple, clean and easy to find a bottom like that. I know I might be proven the fool in the weeks and months to come, but something really doesn't smell right to me yet.

I'm waiting for a nice big flush before I get into this space. Call me greedy or scared, it doesn't matter. We all have our own opinions and style of investing which we are comfortable with. Oil right now just doesn't feel right to me.

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