Cement Shen’s $563m ‘Peach Blossom Palace’ bankruptcy

The sight above may become more familiar as China’s new leadership seek to burst the property bubble.  It shows unfinished town houses on the Peach Blossom Palace estate in Fenghua city, south of Shanghai. They were built by local developer ‘Cement Shen’, whose Zhejiang Xingrun (ZX) property company went bust last month, owing Rmb3.5bn ($563m).  […]

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Fed Chair Yellen ignores demographics, goes back to stimulus

So, here we are again.  Each year it seems to take less and less time for the US Federal Reserve to give up on its confident New Year forecasts of economic recovery. New Fed Chair, Janet Yellen, argued in February that the weather was responsible for the economy’s poor performance.  But now she seems to have decided the […]

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US shale gas expansions highlight lack of demand

One good thing may come out of the current excitement over the US ethylene expansions being discussed on the basis of shale gas developments. Boards may decide to look at seriously at the way yesterday’s ‘demographic dividend’ has now become today’s ‘demographic deficit’.  That would be a major step forward for the US and the […]

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Leaders need to “see around corners” in today’s VUCA world

The number “42″ was the answer to “the ultimate question of life” in the classic novel ‘The Hitchhiker’s Guide to the Universe’.  Yet as the supercomputer providing this answer then explained, it was a pointless exercise as nobody understood the meaning of the original question. The world’s policymakers are in the same position, although they don’t yet realise this.  They […]

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Japan’s debt now $80k for every man, woman and child

Question:  Why will Starbucks reduce the menu price for its venti green-tea frappucino in Japan next Tuesday, when the price is actually going up? Answer:  Because the government hopes the lower menu price will fool people into thinking the price has gone down It is, of course, a nonsense.  And no doubt most Japanese will be quite annoyed that […]

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China’s struggle for a new economy

“To most outsiders the language of official declarations is mind-numbing. Yet, having listened to Premier Li Keqiang and vice-premier Zhang Gaoli, I found (their plans) at least analytically convincing. They clearly recognise the need for decisive action in response to the challenges faced. What they want to do also makes good sense both on economic […]

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US ethylene boom is a dangerous game

The blog continues to lose sleep at night worrying about the likely impact of the planned 10MT expansions of US ethylene and derivative capacity.  And it seems it is not the only one.  Since it first raised the alarm last August, it has talked to a number of senior industry executives and investors who also cannot […]

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Demographics drive demand and fertility rates have fallen

A major debate is underway in Eurozone financial markets about the imminent approach of deflation.  As the chart above shows, Eurozone inflation has ben falling steadily for the past 2 years.  Yet most still fail to recognise that today’s demographics make this development more or less inevitable.  The Financial Times has kindly printed  the blog’s […]

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China’s electricity consumption shows growth at 4.5% and slowing

There’s a lot of wishful thinking underway about China’s future growth.  All the experts who told us that its growth was ‘inevitable’ and would never end, are now having to face the issue that clearly growth is now slowing fast. Their response, of course, is to remain in Denial mode.  They imagine that a magic […]

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Cotton prices slip as US supply rises and China’s imports fall

It seems that cotton prices are about to return to normal levels again.  The blog’s detailed discussion of the issues last September highlighted how current Chinese government policies seemed doomed to fail, at enormous cost to the wider world.  It now looks as though China’s new leadership agrees with this conclusion. Since late 2008, the previous leadership’s […]

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