G7 Summits began in the crisis years of the mid-1970s, bringing Western leaders together to tackle the big issues of the day – oil price crises, the Cold War with the Soviet Union and many others. Then, as stability returned in the 1980s with the BabyBoomer-led economic SuperCycle, they became forward-looking. The agenda moved to […]
Chemicals and the Economy
Italy’s referendum is next test for Eurozone stability
Italy was one of the 6 founding members of the European Union (EU) in 1957, along with France, the Netherlands, W Germany, Belgium and Luxembourg. Its referendum next month will therefore be a critical test of whether the Eurozone and EU can survive the pressure from the Populists. If the Populists win, then the future […]
“Disaster is still some way off” for Cyprus, as Germany prepares to vote
Back in April, the blog suggested that capital controls might remain for rather longer in Cyprus than the “few days or weeks” suggested by the central bank. And a month later, the bank was still unrealistically claiming they would be lifted “as soon as possible”. Today, the blog’s own view that they could be in place “for […]
Italy’s oil consumption back at 1967 levels
The wrong diagnosis can often make the problem worse not better, as doctors know very well. But the message hasn’t got across to policy makers. They refuse to believe that ageing populations spend less and save more – even though all the evidence confirms this commonsense observation. So instead, they have convinced themselves the world […]
EU banks cut lending to the PIIGS by 23% of GDP
On 7 September 2008, in its now famous warning that a financial crisis was imminent, the blog noted that “‘Deleveraging’ is an ugly word, and it has ugly implications“. The chart above shows just how ugly these implications are becoming for the PIIGS countries (Portugal, Italy, Ireland, Greece, Spain). It is based on data produced […]
Fragments from the G20
3 years ago, many hoped the G20 group of the world’s wealthiest countries might work together to solve the global financial crisis. Last week’s Cannes meeting ended that illusion. Instead, its decision to abandon the Doha trade round, launched in 2001, made it clear we have passed the high-water mark of globalisation. This conclusion was […]
Eurozone moves closer to crisis
New analysis by Bloomberg supports the blog’s view last month that the arrest of former IMF head Dominique Strauss-Kahn (DSK) probably marked a critical turning-point in the Eurozone debt crisis Not only was DSK no longer able to persuade German chancellor Merkel that the problems needed just “a little more time, a little more money”. […]
Greece needs a managed default
Many Greeks have always preferred not to pay taxes, and to retire in their 50s. This lifestyle was well understood by their new partners when they joined the Eurozone a decade ago, since when German/French banks have happily funded it with support from their governments. The chart, from the Bank of International Settlements (the central […]
OECD indicators signal slower growth
The OECD’s leading indicators for the global economy suggest that GDP growth is continuing to slow. As the above chart from the American Chemistry Council shows, the OECD’s three key indicators have all slipped from H1 2010’s peaks. The composite indicator (blue) has fallen sharply to +5% from +13%, whilst industrial production (red) is down […]
Markets approach the “drawn-out fundamental downtrend” phase
Sell in May and Go Away” is the oldest rule in stock market investment. This week has certainly provided further support for it: • The major Western stock markets are down c8% • The major emerging markets are down between 4% – 13% • Crude oil prices are down 13% This May panic may well […]