A strange thing happened to German 10-year interest rates last week – they rose quite sharply, by a further 0.2%. That may not sound a lot, but it is when the starting point is so low. On 20 April, they were at 0.07%, and on Friday they closed at 0.37% – for a total rise […]
Chemicals and the Economy
US GDP disappoints again as aging Boomers slow the economy
“Year after year we have had to explain from mid-year on why the global growth rate has been lower than predicted as little as two quarters back.” That was the comment, last August, from the new deputy chairman of the US Federal Reserve, Stanley Fischer. This year, he won’t have to wait until mid-year to start the […]
Market volatility jumps as Great Unwinding continues
As I have feared, major volatility is developing in financial and chemical markets, as the Great Unwinding of policymaker stimulus continues. The chart above shows the dramatic increase in the benchmark portfolio since the Unwinding began in mid-August: There was very little volatility from January until August, with prices generally remaining within +/- 10% Volatility then […]
Volatility rises as central bank policies prove wishful thinking
Q1 was very difficult for many companies and investors. They had wanted to believe since 2009 that central banks could somehow control the global economy: The oil price would always be $100/bbl The US $ would always remain weak Central banks would always be able to stimulate growth in the economy Stock markets would always go up in the […]
Atlanta Fed Q1 GDP indicator at 0.2%, as US housing, auto sales remain below previous trends
US housing starts are slowing so far this year, with February’s starts just below the million level again on an annualised basis. This follows the steadily declining rate of home ownership, which is now back at 1995’s level of 64%. And yesterday’s Case-Shiller report on home prices suggests the 10-City Index may well have peaked back in […]
European interest rates go negative as Draghi boosts stock markets
Historians will not look kindly on Mario Draghi, head of the European Central Bank. They will ask what he thought he was doing, issuing an extra €1tn ($1.05tn) of debt from March 2015, when the Eurozone was already struggling under a dead-weight of government debt: In the big countries, Italy has $47k of debt per person; […]
US stock markets weaken as bond yields signal deflation is near
Increasing volatility in major Western financial markets suggests they are struggling to maintain their momentum. It is certainly hard to be very optimistic about the outlook for the major Western stock markets this year. The reason is that investors are still failing to think about political risk. They continue to believe, as they did a year ago, […]
US shale gas bubble will end in tears for ethylene expansions
A return to lower oil prices is good news for the global economy. But it is bad news for all those who have invested in expanding ethylene production on the assumption that US gas prices would maintain the temporary advantage of recent years. As the chart shows: Oil (blue line) has around 6x the energy […]
Equity markets under pressure as Boom/Gloom Index signals Great Unwinding
Whisper it quietly if you are walking past the imposing Federal Reserve building in Washington DC, so as not to disturb the occupants. They believe that their efforts to boost financial markets have had their effect, and that the real economy, in which we all live and work, will now recover. But what if the […]
US Fed governor agrees it helped fund Alibaba bubble
The last days of a bubble are always the most fun. And Alibaba’s New York market debut last Friday will be one of those to treasure and report to the grandchildren in decades to come. There were so many elements to enjoy: The investment bankers got the price wrong by 40%, but will still walk away with […]
Jump to page: