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China’s G20 Summit shutdown highlights risks to commodities buying “frenzy”

China’s polyester industry, like many others, is already preparing to shut down ahead of September’s G20 Summit in Hangzhou, to reduce pollution levels.  The phenomenon even has its own Wikipedia page, APEC Blue, to describe the moment in November 2014 when Beijing suddenly saw blue sky for the whole of the Asia-Pacific Economic Co-operation (APEC) summit meeting.  It […]

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Flea on dog1

Chemicals, the “flea on the tail of the currency/interest rate dog”

Markets are becoming increasingly chaotic, as the world’s major central banks each try to devalue their currencies. They have created a traders’ paradise, with oil on a particularly wild ride.  But this has not been based on supply/demand fundamentals.  Instead, it has been due to hedge funds jumping back into the commodities market. They don’t […]

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Currency Apr16

US Federal Reserve aims to devalue the dollar, again

What we “assume” can make an “ass of u and me“, as the proverb says.  And that is certainly true of the way central banks have manipulated the major currencies since the financial crisis began in 2008, as the chart shows of the US$’s movements versus the Japanese yen and the euro: It shows the change […]

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Global stock markets weaken as Great Unwinding of stimulus continues

It is 7 years since global stock markets bottomed after the 2008 financial crash.  But as my regular 6-monthly update on their performance shows, it has been a very mixed picture since then.  The chart shows how prices have moved since their pre-2008 peak in the world’s 8 major markets, and in the US 30-year […]

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Brexit poll creates UK, euro interest rate rise risk

Financial markets are very bad at evaluating political risk.  They assume people will always be rational, and expect a ‘business as usual’ scenario to continue.  But as we all know, people are not always rational.  And emotion, as today over immigration may cloud their judgement. This week has seen the first signs of this complacency […]

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FT

If only the central banks could print babies

The Financial Times has kindly printed my letter below, arguing that central bank stimulus can’t restore growth to previous Super Cycle levels. Sir, John Plender’s excellent analysis “Central banks’ waning credibility is the real threat to confidence” (Insight, February 17) highlights the need for a new narrative to explain the economic slowdown of recent years. […]

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US 10-year interest rates jump 23% as Fed debates 0.25% hike

Media hype over the potential for a 0.25% interest rate rise by the US Federal Reserve is well underway.  But as often happens these days, this is missing the bigger picture. The issue is simple: developments in China are far more important to the global economy than anything the Fed might, or might not, do […]

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China’s total lending declines as shadow sector squeezed

Go, go, go, said the bird: human kind Cannot bear very much reality. Time past and time future What might have been and what has been Point to one end, which is always present These lines from the great poet TS Eliot seem to sum up current thinking towards China.  Analysts compete with themselves to […]

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Coppock, Farrell indicators suggest financial market downturn underway

They don’t ring bells to warn of financial market tops and bottoms.  But there are 2 very good substitutes in terms of the Farrell and Coppock Indicators, as the above chart for the UK stock market since 1973 shows: It is based on the Financial Times All-share Index (FTA), as the FTSE 100 only began […]

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Financial markets head towards chaos as Great Unwinding continues

Financial markets are slowly descending into chaos.  The process began in China over the summer, and has now started to impact Wall Street and other developed markets as the Great Unwinding of policymaker stimulus continues. The problem is that successful investment, whether in financial or chemical markets, requires the combination of A clear understanding of […]

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