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As Somali pirates hold captive the Sirius Star, a Saudi ship with almost $100 million in oil on board, and Indian, British, Russian, and German ships battle pirates up and down the Gulf of Aden, one might imagine that the battle against piracy (BusinessWeek.com, 11/18/08) is the largest crisis faced by the merchant navy industry.

After all, since January of this year, some 580 crew members have been held hostage, according to data collected by the International Maritime Bureau, and many millions of dollars have been paid in ransom. Insurance rates are up, ships are trying to avoid the Suez Canal (which ships get to via the Gulf of Aden, along the coastlines of Somalia and Yemen), and crews from India to Britain are refusing to board ships that pass through that zone. "This sort of thing can't be shut down immediately," says an aide to Indian President Pratibha Patil, who advises her on naval affairs. India's navy has fought at least three different pirate groups in the last week. "To some extent, the world's navies have to flex their muscles, and that takes time."

But what's missing in the news reports about the modern-day pirates and the political repercussions is a simpler fact: The world's shipping industry is already on its knees and has spent the past six months in a slow-motion collapse kicked off by the . And the pirates, it would seem, are the least of the problem. Just six months ago, despite the fact that the economy in the U.S. was already slowing down, the industry was steaming ahead. As ships of every flag, color, and size were crossing oceans, carrying in their often cavernous cargo bays the essentials of trade—oil, steel, cement, iron ore, and coal—shipping rates worldwide in June hit their highest peak ever. It cost nearly $234,000 a day to rent one of those large capesize vessels, the ones so big that they don't even fit through the Suez Canal.

Last week, you and your friends could have rented one of those ships for a weekend bachelor party and football game for less than $4,000, according to data collected by the London-based Baltic Exchange.

Low Shipping Costs

What happened? And what does it mean for the world economy? Not good news. Let's start with shipping rates. They are the lowest they have been in six years, as measured by a relatively obscure indicator called the Baltic Dry Index. The index, which measures the cost of shipping most commodities other than oil, has been in free fall since the middle of the year, down 93% from its peak of 11,793 in May 2008. As a result, daily rates for chartering a merchant ship are still down by as much as 98% from just six months ago.

With shipping rates so low, the first casualties, not surprisingly, are shippers. Stocks for companies that construct ships and operate container carriers have languished. For instance, Singapore-based Neptune Orient, the largest shipping carrier in Southeast Asia, on Nov. 19 announced it was cutting nearly 1,000 jobs, or 10% of its workforce. All of the lost jobs are in the U.S. and Canada.

Not too many people pay attention to the BDI other than shippers, but economists trying to read the tea leaves of global trade see it as a solid leading indicator of whether the world's economy is headed up or down. There's a good reason for that: A ship leaves from somewhere in the world with a cargo load of iron ore, cement, or coal, heading most likely for China, India, Western Europe, or the Americas; two months later, when the ship finally docks, that cargo gets used for roads, dams, cars, buildings, airplanes, anything that generates economic activity. As global trade hums along, the index gains, because the number of ships in the world is pretty steady at about 22,000, so increasing demand increases shipping costs.

Shares of Tiffany & Co. slipped to a multi-year low before rebounding on Friday, after an analyst warned that softening consumer spending and declining tourism will hurt the jeweler this year and in 2009.

Tiffany shares rose $1.62, or 9.1 percent, to close at $19.48, after setting a nine-year low of $16.75 earlier in the session.

Tiffany, which posts third-quarter results next week, is being hurt by a slowdown in luxury spending in the U.S. and declining tourism, according to Cowen & Co. analyst Laura Champine.

Champine, who rates the stock "Underperform," also expects a weak economy to hurt results in Japan, Europe and emerging markets.

Looking specifically at Japan, Champine said Tiffany's expectation for same-store sales in the country to decline in the mid-single digits "could be bullish," as Champine expects Japanese consumers will scale back on spending.

"We believe the company's outlook for a low-double-digit increase in total sales dollars for the entire Asia region, including Japan, is unlikely," Champine wrote in a client note.

Champine also said economic data in the U.K. has been weak, and this country accounts for about half of Europe's sales.

"We expect a deteriorating outlook for the company's fiscal 2009 European results," Champine wrote.

Champine said it's likely Tiffany will forecast an outlook for fiscal 2009 below Wall Street expectations next week when reporting quarterly results.

Shares of Tiffany have declined 61.2 percent so far this year.

MIAMI, Florida (CNN) -- Furry signs of a down-trending economy peer dolefully from every kennel at the Broward County Humane Society shelter in Florida and hundreds of others across the country.

Bentley, a 3-year-old Lhasa apso, was given up by his owners because they just couldn't afford to keep him any more.

Tinkerbell, a sweet, docile house cat, was surrendered by her owners after they found out that they had lost their home.

With foreclosures disrupting life, from the family house down to the dog house, and as Americans toil through a tough economic landscape, some of their pets face an even bleaker future in the pound.

"People lose their homes and have to move to apartments that don't accept pets, so they give them up," says Cheryl McAuliffe, a spokeswoman for the Georgia State Humane Society.

Over the past eight months, shelters around the county have seen more animals turned in because their owners have lost their homes or jobs. The shelters are also straining to meet a sharp increase in requests from people who are struggling just to provide food for their pets, says Stephanie Shain, director of outreach for the Humane Society of the United States.

Although they no longer have loving homes, Tinkerbell and Bentley are lucky because their owners gave them up to the shelter. Not every pet gets that kind of treatment. Miami-Dade Animal Services says that on a regular basis, it is called to foreclosed properties where neighbors report seeing pets chained up in a backyard or locked inside an empty house.

"I understand they may be scared for themselves and their kids when they have to leave, but I just wish people would find a place for their pets, too," says Sherry Marks, a Miami-Dade County animal control specialist.

Marks and other county animal control specialists get calls from police when they find a foreclosed home with a pet left behind. And it's not always easy to deal with the abandoned pet, she says. Some dogs are frightened and run, and others become aggressive.

Responding to a call in North Miami, Marks found two dogs at a home abandoned by foreclosure. With their leashes and water bowls still in the backyard, the dogs lingered. They didn't know and couldn't understand why it wasn't their home anymore.

A spokesman for the Humane Society of Douglas County in Georgia said the abandonment rate is tenfold what it was two years ago, before waves of foreclosures started hitting neighborhoods around the county. With more animals coming in and fewer people with the resources to pay for a pet, nearly all shelters there are overrun.

The rapidly approaching holiday season is usually a very busy adoption time for shelters. Last year, the Broward County Humane Society sent 60 animals to new homes December 23. This year, they say, they'll be thrilled if they adopt out anywhere near that number.

But Humane Society officials say people can economize when getting a pet. They urge people to adopt instead of buying a cat or dog. Adopted pets cost less than animals from a pet store, and they will already be spayed or neutered and have their initial set of vaccinations.

Also, pet owners don't have to choose between taking care of their pets or taking care of themselves. Most local shelters offer vaccinations, spaying or neutering at a fraction of the cost of a private veterinarian's office.