Russian downturn causes GM, Ford U-turn; EU slows despite discounts

August is a holiday month for Europe’s statisticians.  So we had to wait until yesterday for a combined summary of July and August’s EU auto sales.  As the chart shows, they indicate a new slowdown is underway after the more encouraging volumes at the start of the year: Sales were up only 5.6% in July and 2.1% in August (red square), […]

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Shiller warning suggests S&P 500 bubble coming to an end

Nobel Prizewinner Prof Robert Shiller correctly forecast the dot-com collapse in 2000, and the 2008 financial Crisis, using the chart above.  Now he is warning we risk a 3rd collapse. The problem is that Western central banks have undertaken the largest financial experiment in history.  Their policy has been to boost financial markets, particularly the US S&P 500 - the world’s […]

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US PVC exports tumble as demand weakens in key markets

The US PVC industry is hitting new problems, to add to the post-2006 collapse of the US housing market. Yet only 10 years ago, it was riding high.  Demand into housing (the main outlet) was at record levels thanks to subprime lending, and PVC production had just hit a record 7.3 million tonnes. Even after the financial Crisis, global […]

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Unwinding

Great Unwinding sees dollar rise, oil prices fall

The day after our China Economic Transformation webinar last week, Premier Li Keqiang confirmed its key message: “There’s already a lot of money in the pool, and we can’t rely on monetary stimulus to spur economic growth…Facing the New Normal state of the Chinese economy, we have remained level-headed and taken steps to tackle deep-seated challenges….in the […]

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Global stock markets still depend on low-cost money for support

The blog’s 6-monthly review of global stock markets highlights the narrow nature of the advance since September 2008, when the blog first began analysing developments.  It shows their performance since the pre-Crisis peak for each market, and the performance of the US 30-year Treasury bond. Remarkably, only the US, India, Germany and the UK stock markets […]

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US reaches ‘peak car’ moment as incentives, inventories rise, whilst fewer Americans carry driving licenses

The blog’s suggestion back in March that now would be a good time for US readers to buy a new car is looking more and more prescient.  As the head of American Honda explained to investors last month: “In addition to a heavy reliance on fleet sales to boost volumes, we are seeing some of our […]

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Great Unwinding of policymaker stimulus creates interest rate risk

Interest rate risk is rising in the developed economies as the Great Unwinding of policymaker stimulus continues.  Since the blog first highlighted this Unwinding last month: Oil prices have continued to tumble, with Brent now down over $15/bbl from its late-June peak The US$ has continued to rise from multi-year lows versus the yen, euro and pound And of course, […]

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US jobless dominated by Blacks, Hispanics and those without high school diplomas

Financial markets today only care about one thing - whether central banks will continue to provide more low-cost financing to support higher asset prices.  Thus markets liked last Friday’s weak US jobs report.  They hoped that the US Federal Reserve would slow its tapering process as a result. This inverted logic explains why bad news for the […]

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China Transformation webinar tomorrow

Today is Mid-Autumn Festival day in China, held to celebrate the harvest.  Traditionally it features the exchange of moon cakes filled with lotus paste and egg yolks, whilst children go to lantern parades. But in recent years, it has also become synonymous with corruption.   Silver moon cakes, as pictured above, became a common gift for […]

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Boom/Gloom Index tumbles as S&P 500 hits record

The stock market used to be a good leading indicator for the economy.  But that was before the central banks decided to manipulate it for their own purposes.  As then US Federal Reserve Chairman boasted 3 years ago on launching their second round of money-printing: “Policies have contributed to a stronger stock market just as […]

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