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Chemicals and the Economy

London house prices risk perfect storm as interest rates rise

2000 should have been the natural end of the BabyBoomer-led economic SuperCycle. The oldest Boomer (born in 1946) was about to leave the Wealth Creator 25 – 54 age group that drives consumer spending and hence economic growth.  And since 1970, Boomer women’s fertility rates had been below replacement level (2.1 babies/woman).  So relatively fewer young people were […]

Budgeting for the Great Unknown in 2018 – 2020

“There isn’t anybody who knows what is going to happen in the next 12 months.  We’ve never been here before.  Things are out of control.  I have never seen a situation like it.“ This comment from former UK Finance Minister, Ken Clarke, aptly summarises the uncertainty facing companies, investors and individuals as we look ahead […]

China’s Dalian trading suggests trouble lies ahead

They don’t ring bells at market tops, to warn about what might happen next. But the above chart may turn out to be the next best thing. It shows the relationship between WTI crude oil prices (blue line) versus LLDPE (linear low density polyethylene, red line) on China’s Dalian futures exchange. The exchange has been […]

US housing starts down 17% as tax incentives end

Spring should be a boom time for building new homes in the USA. But in fact, May’s single family housing starts (bottom chart) fell 17.2% versus April, as the $8k tax credit ended. Yet affordability should be high, with prices down 30% from the peak, and mortgage rates at the lowest levels for decades. This […]

Credit crisis losses head for $4 trillion

To misquote the famous HL Mencken phrase, “nobody ever went broke under-estimating the losses caused by the credit crisis”. Initially, Fed chairman Ben Bernanke estimated the losses at just $100bn. Then, a year ago, the IMF said its estimate was $1 trillion. Now, the IMF is raising its estimate even higher, this time to $4 […]

‘The largest bank failure in American history’

Another day, another bank failure. That almost seems to be the pattern in US financial markets at the moment. Yesterday the nation’s 6th largest bank, Washington Mutual, was taken over by government regulators and sold to JP Morgan. The 119 year old bank, headquartered on the US West Coast in Seattle, had $307bn in assets […]

A debate opens up

Peer Steinbrück, the German finance minister, has joined the growing list of politicians with a view on the current economic crisis. His analysis differs markedly from that expressed by President Bush on Wednesday. ‘The financial market crisis is above all an American problem’, Steinbrück told the Bundestag (German Parliament) yesterday. He added that ‘the current […]

5 key questions about the US bailout

The proposal now before Congress to authorise the spending of $700bn to bail out Wall Street contains just 849 words. It avoids the need to go into further detail via its suggestion that the Treasury Secretary should simply have unlimited authority to act as he ‘deems necessary’. But 5 key questions are bound to be […]

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