Ethylene prices have 96% correlation to oil prices

C2 pricing Jan14

Companies are about to review their Q1 performance, and re-forecast profit and revenue for the rest of the year.  Most will be disappointed with results so far, as the long-promised economic recovery has again failed to appear. This will be no surprise to blog readers.  But there is another and connected issue for Management Teams to worry […]

Continue Reading

China’s lending problems begin to worry wider world – too late

Suddenly, people are starting to talk about China and the risks it creates for the global economy.  There is a lifecycle to the way that such issues develop in the general consciousness, as John Mauldin has observed.  And so this development suggests that we are now well along the process, as highlighted in the chart above: […]

Continue Reading

Oil markets pressured by copper price falls

Whisper it quietly to your friends in the oil business.  But oil prices are looking very vulnerable.  Producers and the central banks have done a great job in creating the myth of imminent shortages – these have always been ‘just about to happen’ as a result of supply disruptions or the long-promised recovery in global […]

Continue Reading

Surprise! Economists suddenly wake up to reality about China

“Forget the Crimea annexation or a U.S.-Russia standoff. The biggest international threat to U.S. economic growth is the slowdown in China, say economists polled by The Wall Street Journal (WSJ).” That was last week’s headline in the WSJ.  These, of course, are the same economists who have been busy telling us for years that China […]

Continue Reading

Crimea referendum highlights growing geo-political risks

Markets have been remarkably calm ahead of Crimea’s planned Sunday referendum to leave Ukraine and join Russia.  Yet as Associated Press has reported: “The Group of 7 world leaders say they won’t recognize results of a referendum for the Crimea region to split from Ukraine and join Russia.  A statement from the seven nations released from […]

Continue Reading

India’s car buyers remain cautious despite pre-election tax cut

Its pre-election time in India, as the world’s largest democracy prepares to go to the polls next month.  And so auto sales are receiving special attention from the politicians in advance of the vote. Thus the Finance Minister cut taxes last month on all models, to 8% from 12% for small cars, 2-wheelers and commercial vehicles; to […]

Continue Reading

5 years of stimulus have only delayed move to the New Normal

Coincidentally the blog began its 6-monthly review of global financial market performance on 7 March 2009, as the US market hit its post-Crisis bottom.  At this point, it was possible to hope that central banks would allow markets to resolve the issues that they themselves had created. After all, there would have been no subprime crash if the US Federal […]

Continue Reading

China focuses on domestic PE production, ME/SEA imports

China’s growth has been the main support for the global economy since the Crisis began in Q4 2008.  The slide above captures the extent of this in polyethylene (PE), one of the world’s largest chemical markets, based on data from China’s chemical association and Global Trade Information Services: The total market grew 11% in the 3 […]

Continue Reading

Central banks have “attempted to manipulate asset prices and financial makets”

“The proper role for monetary policy is to work behind the scenes to promote long-term growth and price stability, yet central banks have instead attempted to “manipulate asset prices and financial markets” to fine-tune their economies. “I do not think this is a particularly healthy state of affairs for the central banks or our economies. […]

Continue Reading

US automakers increase incentives as sales fail to boom

This month is likely to be a very good time to buy a new car in the US.  The reason is that auto manufacturers had believed that a recovery in consumer spending and the economy had become inevitable.  Thus they had built inventories of new cars in anticipation of the sales rush. These are now […]

Continue Reading