The Baltic Dry Index (BDI) is known around the world as the go-to place for dry bulk shipping stock information, as well as being an indicator of the status of the general shipping market. It has nothing to do with cheap real estate in Monopoly.
The index measures the demand for shipping (cargo) versus the supply of carriers (cargo ships). Cargo ships are comprised of different sized carriers referred to as Capesize, Panamax, and Supramax (large, medium, and small cargo ships, in that order).
The demand for shipping varies seasonally and socioeconomically, but the supply of cargo ships is consistent, or at best, slow to increase. It takes a while to build a cargo ship.
Furthermore, the contents of the cargo (raw materials) can be indicative of the demand for certain finished products. In that sense, the BDI can be viewed as an economic indicator of future economic growth and production based on the shipping information (how many ships of what size carrying what raw materials to where and how often).
Why is it dry? No booze? No. The index comprises the shipping of non-liquid energy and food commodity things like coal and grain and ore.
Related or Semi-related Video
Finance: What Are Commodities?74 Views
Finance allah shmoop What are commodities This is a comm
owed And this is my monnet ease And neither of
them have anything to do with commodities though if you
say them fast enough well you'll never mind A commodity
is something that is common like it's everywhere See the
com o there for the big hand Like gold is
a commodity it's everywhere oil is a commodity it's everywhere
seven hundred fourteen page paperback copy of moby dick is
a commodity and yes we can't resist clueless politicians are
a commodity as well Well a commodity is basically the
same thing no matter where and how you buy it
That copy of moby dick is the same copy whether
you get it at your local bookstore If a physical
book stores even exist anymore or on amazon the serial
killer of those aforementioned book stores So if something is
the same everywhere well what would be the opposite Well
how about a swim lesson from michael phelps You know
you can't buy that on amazon Not yet anyway Or
say you want to be the proud owner of a
three headed dog Well you might be able to find
one somewhere but it's going to cost you a whole
lot of kibble Or what if you were looking to
buy a blouse like one that was worn by j
edgar hoover Well those are pretty uncommon and or unique
commodities Well the basic idea is that most commodities can
be sold by lots of people so their profit margins
are generally low They may sell an extreme volume but
if you have thirty people competing to sell you that
same copy of moby dick don't don't you think the
last guy just desperate to get it off his shelves
will drop the price really low and you'll take it
Yeah unfortunately then you have to read that book That 00:01:41.357 --> [endTime] book really will be your way
Up Next
What are petrodollars and what do they have to do with dinosaurs?
What is inflation, and if we poke it with a pin, will it pop?