Central banks have acted as the proverbial tooth fairy towards financial markets in recent years. But they have not just left a small amount of money under the pillow when a child lost its first tooth. Instead they have printed trillions of dollars via Quantitative Easing (QE), to persuade investors to buy shares and commodities, […]
Chemicals and the Economy
Denmark, and the West, wake up to a lack of babies
“We have for many years addressed the very important issues of how to avoid becoming pregnant, how to avoid sexual diseases, how kids have a right to their own bodies, but we totally forgot to tell them we cannot have children forever.” Suddenly, and it does seem to be a sudden realisation, Western countries are beginning to […]
US reaches ‘peak car’ moment as incentives, inventories rise, whilst fewer Americans carry driving licenses
The blog’s suggestion back in March that now would be a good time for US readers to buy a new car is looking more and more prescient. As the head of American Honda explained to investors last month: “In addition to a heavy reliance on fleet sales to boost volumes, we are seeing some of our […]
US jobless dominated by Blacks, Hispanics and those without high school diplomas
Financial markets today only care about one thing – whether central banks will continue to provide more low-cost financing to support higher asset prices. Thus markets liked last Friday’s weak US jobs report. They hoped that the US Federal Reserve would slow its tapering process as a result. This inverted logic explains why bad news for the […]
Boom/Gloom Index tumbles as S&P 500 hits record
The stock market used to be a good leading indicator for the economy. But that was before the central banks decided to manipulate it for their own purposes. As then US Federal Reserve Chairman boasted 3 years ago on launching their second round of money-printing: “Policies have contributed to a stronger stock market just as […]
US dollar rises as investors worry low-cost money may disappear
Nobody knows how the Great Unwinding of central bank stimulus policies will develop. The world has simply never been in this position before. Thus the senior economics and business correspondent of the Financial Times, John Plender, began an article this week: “In a market where asset prices are comprehensively rigged by central bankers, rational investment […]
Oil price costs remain close to 5% of global GDP
Oil markets have been driven by speculative excess since 2009. None of the factors that were supposed to create supply shortages have ever occurred. Markets have never even been close to scrambling for product. And the rallies are getting shorter and shorter, as this simple fact is finally being better understood. Thus traders’ most recent efforts to create […]
And now the stumble?
Last week the US Federal Reserve announced the second move in its so-called tapering process, and reduced its bond buying by another $10bn/month. But there was only a temporary repeat in stock markets of the enthusiastic response to its first reduction in December. We are thus about to test whether the blog’s theory of ‘two steps and a […]
“2 Steps and Then a Stumble”, as the Fed starts to taper
The most important event of the past week, and possibly of the whole year, was Wednesday’s decision by the US Federal Reserve to finally “taper” its vast stimulus effort – now worth $4tn, nearly 25% of US GDP. The timing was no great surprise. The blog was convinced Ben Bernanke would want to start the process […]
Can oil prices stay at $100/bbl forever?
Sometimes the blog’s mind goes back to its happy days in Houston, Texas, when it set up and ran ICI’s feedstock and petchems trading office. And it thinks through the factors that it would have considered when deciding whether to buy, sell or sit on the sidelines. The memory came back during last week’s lively ACS webinar, when […]
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