We are facing a perfect storm of global food, energy and financial crises set off by the war in Ukraine. Analysts need to stop focusing on monetary policy and the inversion of the yield curve. They need to look out of the window and start dealing with the geopolitical reality of Putinflation.
Chemicals and the Economy
Hertz goes bankrupt as non-essential consumer demand disappears
The US Federal Reserve has now spent $7tn bailing out Wall Street. But it couldn’t save the 102-year old Hertz rental company from filing for Chapter 11 bankruptcy protection for its US business on Friday night. Sadly, Hertz won’t be the only casualty. Its collapse instead marks the moment when the problems created by two […]
A new recession era to emerge
Contingency planning has become mission-critical. The longer the coronavirus pandemic continues, the more it will expose the underlying fragility of today’s debt-laden global economy. Companies therefore have to move into crisis management mode, with a number of key areas requiring immediate attention: • Employee health and safety is the top priority. Governments are slowly waking […]
Boom/Gloom Index suggests downturn resuming
A recession is often defined as being when your neighbour loses their job. A depression is when you lose your job. Latest industrial production data shows output is falling around the world. And US unemployment is rising again, with the wider measure at 16.2% as long-term joblessness becomes a major problem. Last month’s IeC Boom/Gloom […]
Consumers prioritise “needs” versus “wants”
The current recession is the blog’s fourth, after those of the mid-1970s, and early 1980’s and 1990’s. It is, however, already different from these, as it is the only one which has led to comparisons being made with the 1930’s Great Depression. As Harvard’s Prof Shiller has noted, “Depression fear did not take off” in […]
Crisis “more serious than the 1930’s”
Last August, the blog noted that politicians were beginning to wake up to the scale of the current crisis. There are still many politicians (and businessmen) who still hope we are facing just a ‘normal recession’. But last week, IMF head Dominique Strauss-Kahn told a Malaysian audience that “advanced economies are already in a depression”. […]
Global manufacturing sinks
Manufacturing output is contracting around the world. JP Morgan’s global index sank 15% in December, and they expect “an intense contraction phase” to continue “for some months to come”. The G7 and BRIC countries are all seeing a decline, as Nouriel Roubini notes: • The US ISM manufacturing index hit a record low of 32.2 […]
The aptly named Mr Darling
In August, the blog welcomed the statement by UK Finance Minister, Alistair Darling, that the ‘global economy was at a 60-year low’. It noted that he was ‘the first western politician to abandon reassurance and instead to focus on the reality of current problems’. But it still took until last weekend before all the relevant […]