Tag Archives | stimulus

Chemical industry warns of likely global recession in 2017

The chemical industry is the best leading indicator for the global economy, and it is flagging major warning signs about the outlook for 2017.  As the chart above shows, based on American Chemistry Council (ACC) data:   Since 2009, Capacity Utilisation (CU%) has never returned to the 91.3% averaged between 1987 – 2008   It […]

Continue Reading

S&P 500 volatility close to 43-year lows as uncertainty rises

Something very strange is happening in US stock markets, as the above chart highlights:   It shows weekly (blue line) and average quarterly (red line) volatility in the US S&P 500 Index since 1928   Both are very close to 43-year lows, going back to September 1973, at 1.7% and 1.6% respectively This seems quite […]

Continue Reading
Ring of fire Feb15

Fault-lines open connecting the debt-fuelled ‘Ring of Fire’

Next week, I will publish my annual Budget Outlook, covering the 2017-2019 period. The aim, as always, is to challenge conventional wisdom when this seems to be heading in the wrong direction: The 2007 Outlook ‘Budgeting for a Downturn‘, and 2008′s ‘Budgeting for Survival’ meant I was one of the few to forecast the 2008 […]

Continue Reading

Oil markets enter the “post-fact economy”, where details of supply/demand no longer seem to matter

Once upon a time, oil markets were based on facts.  Producers and consumers focused on trying to understand what “would” happen”, whilst the speculators placed their bets on what “could” happen. In those days – even 20 years ago, as the chart shows – the role of the speculators on the futures markets was very […]

Continue Reading
China credit Oct16

President Xi tells China’s government to “control asset bubbles”

China’s housing bubble is not just about Shenzhen.  It is the most obvious sign of problems ahead, as I noted last month.  But as the chart above shows from the Wall Street Journal, total lending to the property sector has rocketed in recent months:    More than one-third of all loans went to the sector […]

Continue Reading

Central bankers create debt, not growth, by ignoring demographic reality

The world’s 4 main central bankers love being in the media spotlight.  After decades climbing the academic ladder, or earning millions with investment banks, they have the opportunity to rule the world’s economy – or so they think. But their background is rather strange preparation to take on this role – even if it was […]

Continue Reading
Stocks Sept16

Investors panic in “search for yield” as interest rates go negative

Its been a great few months for financial markets.  All the major markets have seen gains, as the chart shows – something that has happened only once before, since my half-yearly reviews began in March 2009: □   Long-term US Treasury bonds have gained, as long-term interest rates have been falling □   The 30-year bond […]

Continue Reading

Pensions crisis finally becomes a mainstream issue

It has been 5 years since we first warned of a looming pensions crisis in Boom, Gloom and the New Normal.  Now, finally, it is becoming a mainstream issue.  The latest round of central bank stimulus policies has clearly been the proverbial “straw that breaks the camel’s back” for anyone connected with pension funding. The […]

Continue Reading

China becomes net PTA exporter, whilst cotton prices tumble

China used to be the world’s largest importer of PTA (the raw material for polyester). But not any more. Instead it has become a net exporter for the first time in history: □  Its imports ramped up from 400kt in 1995 to 7 million tonnes in 2006, as Western textile manufacturing moved East □  They […]

Continue Reading

Bank of England’s new stimulus policy creates bankruptcy risk for corporate pension funds

The Western BabyBoomers (born between 1946-70), have been one of the luckiest generations in history.  By and large, they have escaped the major wars that have plagued society down the ages.  They have also lived in a world where living standards and material wealth have made astonishing gains.  Equally priceless has been the rise in […]

Continue Reading