Global chemical operating rates remain below SuperCycle levels

Operating rates (OR%) rose to 84% in the global chemical industry in April, according to data from the excellent American Chemistry Council (ACC) weekly report. As the chart shows: This was back at January’s rate, after 83.6% in February and 83.7% in March (orange line) But rates are still below the minimum 88% rates seen in the SuperCycle (red) And they […]

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Winners and losers from the end of China’s property bubble

As promised yesterday, the blog looks today at the potential Winners and Losers from President Xi Jinping’s ‘China Dream’.  It is a complete break from the policies of the previous leadership, which ended up being based on a ‘wealth effect’ created by an unsustainable property bubble. Xi’s programme is emphatically about the longer term.  There […]

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China dream

President Xi Jinping’s ‘China Dream’

A new type of leader seem to be starting to emerge in China and India.  President Xi Jinping in China, and premier Narendra Modi in India, are not spending much time studying the output of focus groups or investment bank analysts.  Nor do they have ‘spin-doctors’ worrying about every phrase on the 24-hour news channels. Instead, they […]

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FT

ECB gives a figleaf for politicians to hide behind

It is impossible to overstate the seriousness of today’s threat from deflation.  Policymakers refuse to accept that demographic change can create an economic impact.  Instead, they want to believe that increasing debt can somehow stimulate growth. The Financial Times has kindly headlined the blog’s letter on this subject as its lead letter. June 10, 2014 […]

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European policymakers no longer able to ignore deflation

A year ago, European policymakers and central bankers were dismissive when the blog suggested deflation was a far bigger threat than inflation – when it was speaking at the world’s major conference for bond investors.  Later this month, the blog expects a different response when returning to speak at the same conference. Last week, the European Central Bank (ECB) was forced to […]

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Network effect leaves central banks fighting the real world

The blog first learnt about the network effect in the late 1990s, during the successful launch of the eBusiness platforms CheMatch and then ChemConnect.   Its Silicon Valley colleagues patiently explained that markets tended to move in predictable stages, once a new concept or product was launched: Everyone would initially jump on the bandwagon, not wanting […]

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Index Jun14

Financial market melt-up takes S&P 500 to new record

A year ago, the blog suggested that financial markets were reaching their most dangerous ‘melt-up’ stage, driven by investor complacency about the ability of central banks to protect them from any downturn.  This analysis was confirmed in November, when absurdly high prices were paid for works of modern art, smashing previous records. Gillian Tett of the Financial Times (another of […]

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Affordability, not affordable luxury, key trend for next 20 years

The world changes, and successful companies and people learn to change with it.  That was the blog’s experience 20 years ago in one of ICI’s most profitable business.  As an executive team, we expected recessions to take place every 3-4 years.  But we began to realise we were being too cautious in our strategies, and missing opportunities. […]

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China map a

Prime Beijing house prices drop 40% since December

China’s property market is the epicentre of the global debt bubble discussed yesterday.  It has been red-hot since urban residents became free to buy their own home in 1998.  Before then, they lived where the state told them.  With interest rates held low to boost state-funded infrastructure spending, people had few options for investing their money. The […]

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RingOfFire Jun14

Central banks have created a debt-fuelled ‘ring of fire’

A new article by an IMF economist makes the point that in April 2008, not a single one of the mainstream economic forecasts covered by ‘Consensus Economics’ was forecasting a recession in 2009. The IMF itself expected growth to continue, as did the World Bank and the Organisation for Economic Co-Operation and Development.  Even by […]

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