About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

Author Archive | Paul Hodges

Ring of fire Feb15

Fault-lines open connecting the debt-fuelled ‘Ring of Fire’

Next week, I will publish my annual Budget Outlook, covering the 2017-2019 period. The aim, as always, is to challenge conventional wisdom when this seems to be heading in the wrong direction: The 2007 Outlook ‘Budgeting for a Downturn‘, and 2008′s ‘Budgeting for Survival’ meant I was one of the few to forecast the 2008 […]

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Sustainability replaces globalisation as key driver for economy

2 weeks ago, India ratified the COP 21 Agreement.  This means the Agreement enters into force on 4 November.  81 countries, responsible for more than 55% of greenhouse gas emissions, have now agreed to reduce emissions in line with the decisions made in Paris last December.  And last week saw another landmark Agreement, with 150 countries agreeing to […]

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Markets question central bank power as Great Reckoning nears

TIME magazine covers often capture the mood of a moment.  And that was certainly true in February 1999, with their now famous cover picturing then US Federal Reserve Chairman, Alan Greenspan, under the heading “The Committee to SAVE the World“. In a further sign of the times, Greenspan was flanked by the US Treasury Secretary […]

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Brexit Oct16

Markets doubt Carney’s claim to have saved 500k UK jobs

Last week as the BBC reported, Bank of England Governor, Mark Carney, explained to an audience in Birmingham that the Bank had saved the UK economy after the Brexit vote in June: “Between 400,000 and 500,000 jobs could have been at risk if the Bank had not taken action after the referendum, he said.  ”We are willing […]

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San Francisco Fed agrees ageing Boomers impact economy

Finally, one of the major Western central banks has agreed that the ageing of the BabyBoomers does indeed have an impact on the economy.  John Fernald of the San Francisco Federal Reserve Bank, wrote in a new paper this week: “Estimates suggest the new normal for U.S. GDP growth has dropped to between 1½ and […]

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Oil markets enter the “post-fact economy”, where details of supply/demand no longer seem to matter

Once upon a time, oil markets were based on facts.  Producers and consumers focused on trying to understand what “would” happen”, whilst the speculators placed their bets on what “could” happen. In those days – even 20 years ago, as the chart shows – the role of the speculators on the futures markets was very […]

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China credit Oct16

President Xi tells China’s government to “control asset bubbles”

China’s housing bubble is not just about Shenzhen.  It is the most obvious sign of problems ahead, as I noted last month.  But as the chart above shows from the Wall Street Journal, total lending to the property sector has rocketed in recent months:    More than one-third of all loans went to the sector […]

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Political risk rises as voters feel only the populists are listening

This week, the new UK premier, Theresa May, highlighted how the central banks have encouraged the populists’ rise: “We have to acknowledge some of the bad side-effects. People with assets have got richer, people without have not.” The problem, of course, goes wider than this.  The continuing failure to recover from the 2008 Financial Crisis […]

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Populists Sept15

Markets struggle with political risk as populist momentum gains

Markets have forgotten how to price political uncertainty in recent decades, as I discussed on Monday.  They have become dependent on central bank handouts, and assumed that globalisation and trade agreements are permanent features of the economic landscape.  Today, they are having to relearn, very quickly, what has been forgotten. My post a year ago […]

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Central banks defy slowing global economy by destroying markets’ power of price discovery

Markets have one main function in life – price discovery.  If I want to buy, and you want to sell, the existence of a market allows us to discover the price at which the market will balance in terms of supply and demand. History, however, provides many examples of times when rulers decided they knew […]

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