An abrupt change of direction is never a pleasant experience in global financial markets. Yet unfortunately, the blog’s regular 6 monthly review suggests this has started to occur since March. Investors are beginning to fear we may not be be entering a new Supercycle after all. Some are also worrying that high oil prices may […]
Chemicals and the Economy
Global economy weakens as China oil demand drops
There seems little doubt that the global economy is now entering a new downturn. Pessimists may worry that it has already begun in Q3. Optimists might hope it will be delayed till Q4, or even Q1. But almost all major indicators are pointing in the same direction. • On the macro-level, the latest American Chemistry […]
Surrey win 40-over cricket Final at Lords
The blog has just returned from Lords cricket ground in London, where its Surrey team has just won the UK’s 40-over competition. It thought you might like to see above photo of the winning team (source: Cricinfo) at the moment of victory.
China’s lending continues to tighten
Financial bubbles are like balloons. Only instead of air, they need to be constantly pumped up with new lending. Otherwise they begin to deflate, and the Minsky Moment occurs. The above chart of China’s bank lending shows, as discussed last month, that the Minsky Moment is getting close. August’s lending (red square) was exactly the […]
Brent’s premium to WTI hits Europe’s energy users
Europe is at the eye of the storm when it comes to energy pricing. This is the last thing required by its struggling economy. As the chart shows, Brent in euros (green line, RHS) is now back at the same level as June 2008, whereas WTI is 35% cheaper (black line, LHS). Such a divergence […]
Algebra is the new alchemy for central banks
The blog’s Boom, Gloom and the New Normal eBook highlights the impact of the ageing Western babyboomers on future demand patterns. Yet central banks such as the US Federal Reserve and the European Central Bank believe demographics have nothing to do with demand. For them, as one former central banker told the blog “demand is […]
Central banks alchemy fails to convince
Alchemists have always claimed to be able to perform the impossible. The most common claim was that they could turn lead into gold. In Europe, the European Central Bank has been trying the same trick. It claimed to turn near-worthless Greek bonds into German-quality euros. Now its German board member Jürgen Stark has followed German […]
OECD warns economic growth “close to a halt”
The IeC Downturn Alert has hopefully done the job for which it was intended. It was launched at the end of April, when the blog became convinced that the global economy was highly likely to enter a new downturn. It also realised from its experience in 2007-8, when it later became known as ‘The Crystal […]
China heads for 45% over-capacity in autos by 2013
China’s auto market growth has clearly stalled. As the chart above shows, August figures (red square) continued the trend of recent months, and were only 5% above 2010 levels (brown line). Rao Da, head of China’s automotive association, also repeated his warning that “there is no sign of a market recovery“. The reason is not […]
Budgeting and the New Normal
Companies are now starting the Budget process for 2012-14. As always, the blog will present its own view next month. It will also review last year’s Budget Outlook, presciently titled ‘Budgeting for Uncertainty’. In the meantime, companies might like to use its recent ‘The world in 2021′ as a way of challenging their own thinking […]
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