I mentioned the Baltic Dry Index a year ago in this article. For those who aren't familiar with it, Wikipedia describes it as follows:
Most directly, the index measures the demand for shipping capacity versus the supply of dry bulk carriers. The demand for shipping varies with the amount of cargo that is being traded or moved in various markets (supply and demand).
The supply of cargo ships is generally both tight and inelastic—it takes two years to build a new ship, and a ship's fixed costs are too expensive to take it out of circulation the way airlines park unneeded jets in deserts. So, marginal increases in demand can push the index higher quickly, and marginal demand decreases can cause the index to fall rapidly. e.g. "if you have 100 ships competing for 99 cargoes, rates go down, whereas if you've 99 ships competing for 100 cargoes, rates go up. In other words, small fleet changes and logistical matters can crash rates..." The index indirectly measures global supply and demand for the commodities shipped aboard dry bulk carriers, such as building materials, coal, metallic ores, and grains.
Because dry bulk primarily consists of materials that function as raw material inputs to the production of intermediate or finished goods, such as concrete, electricity, steel, and food; the index is also seen as an efficient economic indicator of future economic growth and production. The BDI is termed a leading economic indicator because it predicts future economic activity.
There's more at the link.
The Baltic Dry Index is thus a very accurate predictor of world economic trends. It measures the volume of all goods dispatched by sea all over the world. If there's heavy demand for shipping, this indicates high economic activity and good times. If there isn't, it shows declining economic activity and warns of bad times ahead.
With that in mind, take a look at this graph.
Right now, the Baltic Dry Index is lower than its lowest point during the financial crisis of 2007-2008. That should worry us. In fact, in economic terms, it should scare the hell out of us. As Zero Hedge puts it:
... since Thanksgiving, The Baltic Dry has fallen on 43 or the 47 days, down over 60% from ... late October ... At 569, The Baltic Dry is inching ever closer to what will be the lowest level ever (554 on 7/31/1986) for the global shipping cost indicator ...
One or two more days like this and it will be the all-time low ...
Again, more at the link.
What this means is that companies and nations are simply not ordering or shipping anything like the quantities of goods needed to sustain economic activity at its present level, let alone provide growth. The Christmas shopping season was difficult for retailers, as consumer demand simply didn't materialize. This is our warning sign that things are going to get a lot worse over the next few months.
Next, consider that 'Consumer spending comprise[d] 71% of the US economy in 2013'. If that falls off even further, where does it leave our economy?
You figure it out. Just don't take too long about it, because otherwise events will overtake you.