China stock market and Baltic Dry Index are in current disagreement.

China manufactures things and ships them around the world.  Much of that transport is done by sea.  The Baltic Dry Index is an assessment of the price of moving major raw materials by sea.

As global trade increases, the Baltic Dry Index tends to increase.  As global trade decreases, the index tends to decrease. The number of cargo ships can and does fluctuate to moderate swings in the index, but not rapidly.  That makes the Baltic Dry Index a useful tool to view global trade (and to a great extent the Chinese export economy) in a single indicator.

The following Baltic Dry Index chart shows the index collapsing in the last 6 months.  However, FXI (the China ETF) did not fall nearly as much, resulting in the rising relative performance shown in the middle panel of the chart.  Both FXI and the

t’s official, for what it’s worth. Both Europe and Japan are in recession. The Eurozone contracted by 0.2% for the second straight quarter. Germany (the largest economy in Europe) and Italy (fourth largest) both shrank in the third quarter. Japan’s economy-the world’s second largest-shrank by almost half a percentage point in the third quarter.

The world’s largest economy, as you already know, is in recession too. In the U.S., financial capitalism is imploding. Citigroup’s CEO Vikram Pandit told analysts the company would lay off over 50,000 workers. He cited rising loan losses and an economy slowing much faster than the company previously expected.

Gulp.

As over-sold as we believe Australian stocks are at the moment, we’d be foolish to ignore the warning signs flashed yesterday all over the globe. Bill had better take down the crash alert flag and run up the depression alert flat.

World GDP is around $54 trillion. The U.S., Japan,

The base metals were all off to the races on Wednesday. Copper blasted back over the $2 mark, rising from the pre-dawn hours to past noon before easing a bit and finishing at $2.0678/lb., up 14¾ cents. Nickel followed a similar path, cresting above $6 before pulling back to close at $5.8559/lb., up 61¼ cents.

Zinc was strong, ending just off its intraday high at $0.5375/lb., up nearly 5 cents. Aluminum hit 97 cents before beating a sharp retreat back to $0.9479/lb., up three-quarters of a penny, while lead shot up to $0.6728/lb., up 3¼ cents.

Copper led the industrial metals on a tear yesterday, shooting up the most in two years, as traders became consumed with optimism generated by the Federal Reserve.

The metal is up 25% so far during this comeback week.

The price of copper is also likely to be supported by “supply-side vulnerability,” according to analysts at