Category Archives: Economic indicators

13th December 2013 – The Baltic Dry Index surges back to life

Since the early summer, I’ve been following the Baltic Dry Index (BDI) closely. Tracking twenty three of the world’s busiest shipping routes, the BDI is one of the purest indicators of genuine economic activity out there. It has acted as a superb leading indicator for the general mining sector over the years and I’ve been watching for any sign of a turnaround, as a precursor for getting back into these battered stocks. My original target was for the BDI to regain and hold 1,500, the minimum level I associate with genuine global growth.


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30th July 2013 — The re-rating of American GDP is not cheating (honest!)

Tomorrow lunchtime, before the release of the evening’s much anticipated FOMC policy statement, the Bureau of Economic Analysis (BEA) will release America’s GDP figure for Q2. The consensus is that the US economy will have grown by 1% in the last quarter. However, interestingly, the nominal figure for output is likely to expand by between 2.5% and 3%.

Now this may sound like another bureaucratic, sneaky sleight of hand to bedazzle a confused public into believing that all is well, growth is real and things are picking up but, in this instance, the change looks justified and, indeed, quite positive. In short the BEA is going to revise its methodology for calculating GDP to include intangible assets for the first time. This will mean that items such as R&D expenditure and “artistic originals” (e.g. television series or music productions) will be treated as investment rather than expense. Given the real value such items can generate in an economy it seems a sensible step to recognise their contribution in the headline figures.


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