Entries from Chemicals & The Economy tagged with 'housing'
90% of new US mortgage bonds now government guaranteed
It would be nice to believe that a sustained recovery was now underway in the US housing market. But unfortunately, there is little evidence to confirm the claims now being made. As the chart of prices from the S&P Case-Shiller...
Aging US BabyBoomers mean new home boom unlikely
Is a recovery underway in the US housing market? Investors on Wall Street certainly think so. One over-excited fund manager called the blog recently to exclaim "housing starts were at 500k, now they are at 900k, and they'll be back...
US house prices unlikely to drive economic recovery
When 'everybody knows' something, experience has taught the blog to become very suspicious. And when everybody knows that rising US house prices are certain to drive a US economic recovery, it becomes very suspicious: • For a start, as the...
UK housing markets approach their Minsky Moment
The UK housing market has led a charmed life in recent years. Unlike the US, Spain, Ireland and many other Western countries, prices have not collapsed. Instead, near zero interest rates, and the high proportion of mortgages on variable rates,...
China increases lending as leadership talks continue
It has been obvious for most of this year that China's economy is in trouble. As the blog wrote in the Financial Times in March: "PTA is thus warning that China's economy could be slowing faster than generally realised". Yet...
US housing stabilises, but Uncertainty remains high
Housing used to be the engine-room of the US economy. Rising prices allowed people to use their house as a cash machine. In turn, this drove GDP growth, as consumer spending is 70% of the US economy. But for the...
China's leaders mark time till power handover
How many more empty cities like Ordos does China really need? Are 64.5m empty apartments enough, or should there be more? Should we build more steel mills, to add to the current 220MT of over-capacity? These are the questions facing...
China battles economic slowdown
Wenzhou in coastal Zhejiang province was the first city to encourage private enterprise when China began opening its economy in 1978. Its growth accelerated after China joined the World Trade Organisation in 2001, attracting 2.8 million migrant workers to join...
U is for Uncertainty
The blog's series on the emerging 'VUCA world' today looks at how companies have to manage increased levels of Uncertainty. This can be seen in key areas of demand, such as housing. The above chart shows how US housing starts...
China's demand growth remains weak
China's demand growth continues to be weak down the main value chains. Auto sales are the most obvious example. As the chart shows, they have recovered from the very slow period over the Lunar New Year holiday, but are still...
A China 'hard landing' gets closer
China's leadership remain preoccupied with the transition to a new politburo in October, and the continuing fallout from the Bo Xilai affair. Equally, April's 7% rise in food price inflation remains a major issue for a country where 96% of...
China's Q1 PE demand down 4% versus 2010
The story of the past 5 years has been how global economic growth moved from a dependency on the West's housing boom to a dependency on China's housing boom. Today's only problem is that history suggests such booms are unlikely...
Beijing home prices fall 21% in Q1
Investment bankers and development economists like to talk about China being a 'middle class' country. Yet Asian Development Bank data shows that 96% of the population earn less than $20/day on a (PPP) Purchasing Power Parity basis. Similarly, China's 'luxury...
Markets weaken as real problems remain unsolved
It is hard to be very optimistic about the demand outlook for Q2. Demand in Q1 was lacklustre, even though it should have been the strongest quarter of the year. H1 is seasonally strong, and Q1 also benefited from Easter...
US housing discovers New Normal opportunities
The US housing market was the original cause of the current financial crisis. It has gone quiet recently, but this does not mean that the problems are resolved. Quite the opposite, in fact. True, foreclosures have slowed recently, due to...
A China 'hard landing' may be unavoidable
Saturday's blog post highlighted the risk of a hard landing in China. This risk is very real, and is centred on the government's need to achieve a difficult balance between reducing today's high rate of food price inflation, whilst not...
China's inflation at new high, bank lending slows
The blog continues to worry about signs of a slowdown in China. Major commodity trader, Glencore, said this week "we see a pullback in China and it will continue". This challenges the views of Dow CEO Andrew Liveris last month,...
Global stock markets slide as demand disappoints
It is now 5 weeks since the IeC Downturn Alert was launched. The chart above therefore updates the blog's regular review of financial markets, showing how these have moved over the same period. Most are down around 4%-5%. Russia is...
US housing starts disappoint, again
US housing used to be one of the largest chemical markets in the world. In 2006 it was worth $35bn, with 2.2 million new homes each using $16k of chemicals, according to American Chemistry Council (ACC) estimates. Yet as the...
Buy a US home - get a $17k car free
The New Normal has definitely arrived in the US housing market. US new home sales are down 80% from their peak, and builders are getting desperate. Offers in the Chicago area now include a $17k credit for a GM car,...
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