Thoughts for Today

The Baltic Freight Index is down because of iron ore miners shutting down supply to pressure China during their price negotiations. 30% iron ore increase is in the bag, but the miners want 50%. They may very well get it… China’s supplies are rumored to be low, they’re building infrastructure for the Olympics, they’re being pressured by Indian tariffs, their attempts to buy out smaller miners in Australia is taking forever, spot prices for ore in China are up over 100% of last year’s contract price, etc.

I expect a crash in China, possibly this year, probably next year, so this trade makes me wary.However, I do see this as a possible short term trade for, say, RIO (or if you have lots of balls, DRYS) until the new contract price is negotiated. I think the miners will get their price.

Question is ..... Do I have the balls to buy DRYS?

Another thought:

Inflation #'s out today: 2007 4.1%. That's the highest since 1990, when inflation reached 6.1%. The next year there was a recession. Coincidence?