After a brief hope-strewn bounce in September and October, world trade volumes have reverted to their recent stagnating growth trend, drooping 0.1% MoM in November as world industrial production swoons 0.4% MoM. On a smoothed year-over-year basis, world trade volume growth is decelerating at the fastest pace since Q4 2012 (right before QE3 was announced to save the world) and world industrial production growth is near its weakest since Q4 2008. It's not just China either as import volumes declined at the same rate in advanced economies and emerging economies.
The Baltic Dry Index hit a new all time low this week.
This is not new: we have been tracking the collapse of the Baltic Dry - aside for the occasional dead cat bounce - to all time lows, a proxy of global shipping and thus trade, for the past 7 years.
To be sure, for staunch goalseeking Keynesian the collapse in Baltic Dry rates had little to do with actual demand for this services, and everything to do with the alleged supply of drybulk shipping, which was the stated reason for the collapse in costs.
In other words, "trade was fine."
Except it's not!!
The last time world trade growth was decelerating this fast, The Fed stepped in with QE3...
And world industrial production growth is collapsing at nearly the fastest pace since Q4 2008...
Source: CPB
Seems like the perfect time to be hiking rates?
As we noted previously, given these trends, the crummy performance of our heavily internationalized revenue-challenged corporate heroes is starting to make sense: it’s tough out there.
And further, as the baltic dry index continues to plumb new record lows, how long until central banks realize that for all their omnipotence and all their attempts to restore growth, inflation and the "wealth effect" they never mastered the only thing worth printing in a globalized world: printing trade?