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Falling cotton/polyester prices create ‘deflation shock’ for consumers

Cotton prices appear to be collapsing again due to the surpluses created by central bank stimulus policies since 2009.  As the chart shows, these had initially caused prices to soar to levels not seen since the American Civil War: They reached 230c/lb in March 2011, nearly double the post-1982 peak of 117c/lb in May 1995 (blue […]

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G7 births in 2013 equal Great Depression year of 1933

In 2013, there were fewer births in the G7 countries – responsible for nearly 50% of the global economy – than in any year since the Great Depression year of 1933.* As the chart also shows, 1933 was an exception.  Births bounced back immediately afterwards.  But the low figure in 2013 is part of the declining trend seen since […]

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Chart of the Year – China’s auto sales bubble begins to burst

‘How China fooled the world’ was the subject of an excellent BBC documentary early in 2014 by senior editor, Robert Peston.  The BBC headline was as follows: “Now, Peston reveals what has actually happened inside China since the economic collapse in the west in 2008. It is a story of spending and investment on a scale never […]

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FT

Sanitation is the greatest challenge facing Modi

The Financial Times has kindly printed my letter, commenting on their editorial about Premier Modi’s economic policies in India. Sir, Your editorial “India’s Modi should act more decisively in 2015” (December 24) has too limited a view of the policies required to generate growth in India’s economy. With gross domestic product per capita of about […]

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US home ownership back at 1995 level as decline continues

  Conventional wisdom seemed to think the US housing report was positive this week.  But analysis of the data makes it hard to see why. One confusion comes from media use of the ‘seasonally adjusted’ number.  But why do we need an adjustment, when we have data going back to 1959?  It simply creates more potential for error.  […]

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70% of China’s auto dealers unprofitable, as lending curbs bite

Would anybody have believed these charts, if one had presented them as a forecast for auto sales a few years ago?  Clearly not: Everyone knew that Europe was one of the world’s top 2 markets, and China was very small Europe’s average incomes were around $40k, whereas China’s were less than $5k even in the […]

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US housing fraud rises as first-time buyers priced out of market

Signs of stress seem to be appearing in the US housing market once more.  Thus the Wall Street Journal reports: “An estimated one in seven appraisals conducted from 2011 through early 2014 inflated home values by 20% or more..Bankers, appraisers and federal officials in interviews said inflated appraisals are becoming more widespread as the recovery […]

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American shoppers focus on needs, not wants

Tomorrow is the great American shopping day, Black Friday.  In the past, every true American would head for the malls, to shop till they dropped.  But more and more evidence keeps emerging that consumer habits are rapidly entering the New Normal, as I discussed last week. Thus a detailed study by the Wall Street Journal highlights, as […]

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Where will all the new US ethylene capacity be sold?

I worry about the $100bn+ investment that it currently being made in new US chemical output.  On paper, it seems a ‘slam dunk’ as a US College basketball player might say: Shale gas has created a massive surplus of ethane feedstocks that can provide low-cost production for export Oil prices are very high, and so all […]

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UK grocery sales fall for first time since records began

Next Friday sees the start of the main shopping period in the US – ‘Black Friday’, the day after Thanksgiving.  But increasingly, consumers are giving the stores a miss.  Or even worse (from the retailers’ viewpoint) only visiting to check out products before buying them online. Thus Wal-Mart, the largest US chain, is now having to extend its Black Friday […]

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