Bubbles are great fun while they last. But they are much less fun when they burst. For the past 20 years, central bank stimulus has created some of the largest bubbles ever seen. But now, led by developments in Japan and China, they are bursting
Chemicals and the Economy
Prepare for the coming crisis
As the head of Germany’s Employers’ Associations warned last month: “We are facing the biggest crisis the post-war Federal Republic has ever had. We have to be honest and say: First of all, we will lose the prosperity that we have had for years”.
“We now understand better how little we understand about inflation”, Jay Powell, US Federal Reserve Chairman
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.
Markets will see plenty of rallies, but history suggests the real bottom will be at least 2 years away
The history of the 1929 and 2000 downturns suggests the real pain is yet to come. Housing markets look terribly over-valued around the world, as I noted last month. And US consumer sentiment is at all-time lows. So most company earnings seem set to fall, with more than 60% of US CEOs now expecting to see a recession.
Consensus wisdom defies reality around the world
“Consensus wisdom” is a handy way of keeping up with events. Nobody likes to be the person who says “I don’t know” when the boss asks a question about something important. But unfortunately, “consensus wisdom” is often wrong, as Ipsos MORI confirm in their new ‘Perils of Perception‘ survey, As the authors note: “It highlights how […]
Auto sales and the oil price: the Great Unwinding continues
Serious questions need to be asked about the likely level of future demand growth for oil and auto sales in Emerging Markets (EMs), as I describe in my latest post for the Financial Times, published on the BeyondBrics blog Oil market volatility has reached near-record levels in H1 this year, as the first chart shows. […]
US$ breaks out of 30-year downtrend
Attention has rightly been focused on the collapse of oil prices over the past 6 months. These have further to fall, but the major part of the move must now be behind us. After all, Brent was at $104/bbl when I first forecast the move in mid-August, and closed at $56/bbl last night, so probably “only” has $20/bbl-$30/bbl further downside. […]
Unilever says Q2 market growth slows in emerging countries, developed countries weak
The global economy really isn’t getting any better. That’s the key conclusion from the blog’s quarterly survey of company results for Q2. Of course, some companies are doing well – either because of shale gas economics, or their own market positioning. But consumer giant Unilever summarised the general picture very well: “Market growth continued to slow in emerging […]
Earnings disappoint again, as companies face challenge of slowing global growth
Most of today’s executives and policymakers grew up during the SuperCycle. Many therefore continue to believe that a return to constant growth is somehow inevitable. Sadly, of course, they are doomed to disappointment. And disappointment is the predominant message from the blog’s usual quarterly review of company results. Thus BASF note that “achieving our earnings target […]
Roubini cautions on China growth, highlights India
Prof Nouriel Roubini, one of the few to forecast the current Crisis, is very positive about the opportunities for growth in India over the next 20 years. Speaking in Mumbai, he argued that: • “While the economies of India and China are not large enough to lead global growth, emerging markets remain ‘bright spots’ compared […]
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