Tag Archives | credit bubble

Financial markets worry as Fed talks of ending stimulus

After 5 years of government stimulus, policymakers are having to think about their exit plans.  US Federal Reserve chairman Ben Bernanke retires in January, and most of the blog’s clients in the financial community believe that he intends to start the process before he leaves, perhaps as early as next month. This is likely to prove very scary […]

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London’s £300m house

Blog readers are often very successful people. So the blog thought you might like to know that the London house above is now on sale. A bargain at just £300m ($480m), the Financial Times reports it has 45 bedrooms on 7 floors and overlooks Hyde Park. Covering the area of a soccer pitch, it naturally […]

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‘Waiting for Bernanke’ is hottest show on Wall Street

‘Waiting for Godot’, the great play by Irish writer and Nobel Literature Prizewinner, Samuel Beckett, deals with the meaning of existence. Written just after the Second World War, its two characters wait endlessly for the arrival of Godot. US financial markets are currently staging their own version of the play: • They no longer see […]

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China’s leaders mark time till power handover

How many more empty cities like Ordos does China really need? Are 64.5m empty apartments enough, or should there be more? Should we build more steel mills, to add to the current 220MT of over-capacity? These are the questions facing China’s leadership today, as they debate the economic slowdown. Growth has slowed to a relative […]

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China battles economic slowdown

Wenzhou in coastal Zhejiang province was the first city to encourage private enterprise when China began opening its economy in 1978. Its growth accelerated after China joined the World Trade Organisation in 2001, attracting 2.8 million migrant workers to join the city’s population. Now its 9 million people are at the forefront of China’s slowdown, […]

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PE demand decline highlights China risks

China’s slowdown is continuing to gather pace. Polyethylene (PE) demand has been a very reliable leading indicator for the economy. Its 50% growth between 2008-10 highlighted the overheating economy, as the government stoked a credit bubble, even whilst official GDP growth reports were reassuringly low. GDP numbers, however are merely targets. Likely future premier Li […]

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A China ‘hard landing’ gets closer

China’s leadership remain preoccupied with the transition to a new politburo in October, and the continuing fallout from the Bo Xilai affair. Equally, April’s 7% rise in food price inflation remains a major issue for a country where 96% of the population earn less than $20/day. Data for April bank lending and electricity consumption highlights […]

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China lending jumps to hit $380bn Q1 target

China’s leaders have a lot to worry about. The purge of Bo Xilai has now been followed by news of his wife being suspected of murder. This makes the run-up to October’s leadership transition even more difficult. Only 3 months ago, Bo was being tipped by some to join the Politburo, and even to become […]

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A China ‘hard landing’ may be unavoidable

Saturday’s blog post highlighted the risk of a hard landing in China. This risk is very real, and is centred on the government’s need to achieve a difficult balance between reducing today’s high rate of food price inflation, whilst not collapsing the property market. House prices are now falling in 60 Chinese cities. An excellent […]

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The banana skin risk

This week’s news provided more evidence to support the blog’s fear that the global economy is close to recession: • The German economy, Europe’s motor, saw negative growth in Q4 • US retail sales grew just 0.1% in December, despite good auto sales • China’s auto sales fell in Q4, and house prices fell in […]

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