A recent Financial Times article, “The shipping news: BDI does not mean buy, buy, buy,” makes reference to a passage in The Shipping Man in its opening paragraph:
Robert Fairchild gazed deeply into the amber numbers illuminated on his Bloomberg terminal, staring in disbelief that something called the “BDI” has fallen by 97 per cent . . . as a New York City hedge fund manager who valued volatility, (he) was immediately intrigued by what he saw.
And as any political consultant, portfolio strategist, or art dealer could tell you, getting the revenues in is all about client management. There is no better way to do that than to quote some piece of information that is both apparently profound and yet incomprehensible, at least until the electrons dry on the wire transfer.
The BDI, or Baltic Dry Index, which measures a basket of daily time charter rates paid for different sizes of cargo ships, has been a useful means of confusing investor-clients for many years. The BDI has been used as a macroeconomic indicator, and yet seems to be so . . . real, made of steel. Not like some repo rate. One of Alan Greenspan’s client-management tools as Fed chair was the confusing interjection of freight-car loading numbers, or cardboard production.
Harmless fun, you think? Sadly, animals have been harmed during the making of this film. Such as your money. As the fictional Robert Fairchild finds out, things are a little more complicated than they seem when he tries a “contrarian” play guided by the BDI.
You cannot depend on these people to do your homework for you.
To read the full article, please visit FT.com.