US investors are continuing to excite themselves over the potential for a re-run of the sub-prime housing boom from 2003-7. Thus they welcomed last week’s news of higher house prices with a major rally, after having ignored earlier reports of a slower pace in housing starts themselves. As the chart shows: • Starts dropped back […]
Tag Archives | housing
It would be nice to believe that a sustained recovery was now underway in the US housing market. But unfortunately, there is little evidence to confirm the claims now being made. As the chart of prices from the S&P Case-Shiller index shows: • February prices (red square) remain in the same range seen since the […]
Is a recovery underway in the US housing market? Investors on Wall Street certainly think so. One over-excited fund manager called the blog recently to exclaim “housing starts were at 500k, now they are at 900k, and they’ll be back to 2 million within a year or two”. His definition of a pessimist was someone […]
When ‘everybody knows’ something, experience has taught the blog to become very suspicious. And when everybody knows that rising US house prices are certain to drive a US economic recovery, it becomes very suspicious: • For a start, as the above chart shows, the prices shown in the authoritative S&P Case-Shiller Index haven’t actually risen […]
The UK housing market has led a charmed life in recent years. Unlike the US, Spain, Ireland and many other Western countries, prices have not collapsed. Instead, near zero interest rates, and the high proportion of mortgages on variable rates, meant that UK homeowners have seen their monthly payments reduce dramatically. There is just one […]
It has been obvious for most of this year that China’s economy is in trouble. As the blog wrote in the Financial Times in March: “PTA is thus warning that China’s economy could be slowing faster than generally realised”. Yet it is hard for the government to move beyond short-term responses: • The new Politburo […]
Housing used to be the engine-room of the US economy. Rising prices allowed people to use their house as a cash machine. In turn, this drove GDP growth, as consumer spending is 70% of the US economy. But for the past 5 years, this process has gone into reverse: • Owners now have $9.18tn in […]
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 […]
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, […]
The blog’s series on the emerging ‘VUCA world’ today looks at how companies have to manage increased levels of Uncertainty. This can be seen in key areas of demand, such as housing. The above chart shows how US housing starts (blue line) have fallen from 2.1m in 2005 to just 0.6m last year. Housing permits […]
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Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry.
The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts.
Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.