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Chemicals and the Economy

US housing starts at 25% of 2006 peak

US housing is still limping along the bottom. December’s housing starts were only 0.2% above 2008 levels. Overall, 2009 saw just 554k starts, the lowest level for 50 years, despite the support of the $8k tax credit. During the Boom period, as the ACC’s chart above shows, starts (blue line) peaked at a 2.2 million […]

China’s empty city

The blog has come across an interesting example of the impact of China’s credit growth, courtesy of Merryn Somerset Webb in the Financial Times. She highlights a YouTube video (link above) which investigates the new city of Ordos. The old city has become known as “China’s Texas”, because of the recent wealth generated from the […]

China worries about house price inflation

The Dalian polymers future market had a strong end to 2009. As the chart shows, Linear Low Density Polymer volumes (blue line) jumped to 44 million tonnes. The new PVC contract saw the same volume. But there are growing signs that this may prove a ‘last hurrah’. The government is clearly starting to worry about […]

The blog in 2009

The blog is now 2.5 years old. Readership continues to grow, both within the chemical industry and its investment community. It is now read in 121 countries, and 2735 cities, versus 89 countries and 1244 cities a year ago. Readers are also very loyal, with 23% reading it twice a week. Its readership covers all […]

Feldstein says US recession “isn’t over”

Harvard’s Prof Martin Feldstein is one of the very few economists who has correctly forecast the length of the current downturn. Today, he questions whether the US recession is really over, and suggests that “2010 is going to be a very weak year“. He believes that we are entering a more frugal economy, and notes […]

US housing remains weak as unemployment rises

The US housing market was worth $35bn a year in terms of chemical sales in 2006. In that Boom year, 2.2m homes were built, each using $16k of chemicals. But as the chart above shows, from the ACC’s weekly report, there has been a steady decline since then. The recent introduction of the $8000 first-time […]

Housing markets to be slow next year, US Fed

In 2006, there were 2.2 million US housing starts. These were worth $35bn of chemical sales. Currently, and even with the support of an $8k tax credit, they are running at an annual rate of just 600k, worth $10bn. This is the lowest level since records began in 1960. Even in 1975, 1981 and 1981, […]

The Latvian canary

Coal miners used to take a canary with them, to help detect poisonous fumes. If the canary stopped singing, then they knew there was a problem. This led to the concept of “the canary in the coalmine acting as a warning of danger”. Small countries can play the same role in the global economy. Last […]

Operating earnings hide US economic downturn

Companies normally have 3 ways of pleasing investors: • Meet or better expectations for revenue and earnings • Cut costs to meet earnings if revenues disappoint • Focus attention on a more favourable earnings definition When things are going well, the first option is preferred. But under the pressure of a sustained economic downturn, it […]

California seals deal on $26bn deficit

California’s Governor, Arnold Schwarzenegger, has now made a provisional agreement to reduce the State’s soaring budget deficit. Its main features are a $9bn temporary cut in the education budget, plus multi-$bn cuts in welfare and health programmes. The only good news is that it clears the way for oil drilling to resume off the Santa […]

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