By John Richardson AN investment bubble can only remain stable if you pump ever-more air into the bubble. If you don’t continue to do this, then the bubble is in severe danger of bursting. The warning signs started flashing red for China after the crucial November 2013 Third Plenum meeting. At that point, it had […]
Asian Chemical Connections
Following In The Footsteps Of China Is Impossible
By John Richardson THE chart above shows how China’s consumption of polypropylene (PP) rose from 4.6 million tonnes in 2000 to 19 million tonnes in 2014. It also illustrates how, in the process, China’s percentage share of global PP consumption jumped from 15% in 2000 to 32% in 2014. Meanwhile, imports also rose during the […]
China By Itself Is Not A Strategy
By John Richardson SOMETIMES a bit of data is worth many thousands of words – and so my choice of chart for today. It shows that in one major petrochemical, polyethylene (PE), China’s imports in 2014 continued to hugely overshadow shipments to every other major importing region of the world (the chart above excludes Japan, […]
Stand Back And Think: Can This Oil-Price Rally Really Last?
By John Richardson THE talk in oil markets right now is largely about falling US rig counts and how this has resulted in tighter supply. But it is very important to note that this focus on the rig count is a recent phenomenon. “People have only started paying attention to the oil rig count in […]
China After The Lunar New Year: Your Five-Point Guide
By John Richardson HERE is a five-point guide to what will happen in China after the Lunar New Year is over (most of China will be only holiday from 18-24 February): The People’s Bank of China (PBOC) now seems almost certain to further reduce interest rates and the bank reserve requirement (RRR). If you recall […]
Collapse Of China “Carry Trade” Threatens A Yuan Devaluation
By John Richardson CONVENTIONAL wisdom, as everyone should have discovered over the last 16 months, has a horrible habit of being completely wrong. Today, therefore, if anybody tells you this, “China might widen the band within which the Yuan trades against the US, but, other than that, it won’t allow a sharp depreciation of its […]
China January Data Concludes The Debate
By John Richardson THE latest data from China further underlines what I have been arguing since early last year – that it is at the centre of a Great Unwinding that will have deep and lasting global economic consequences. Here is the data: Chinese imports, primarily of raw materials, fell by 19.9% in January. Exports […]
Australia: This Is No Way To Run A Country
By John Richardson TONY Abbott has survived an attempt to remove him as Australia’s Prime Minister. Do you really think this will bring to an end the political instability that has resulted in four changes in PM since 2007? This really is a rhetorical question because anybody who lives and works in Australia, as I do, […]
A Perfect World? If Only It Were So
By John Richardson IN A perfect world everything always turns out for the best in the end. And so quite a few people who argued that high oil prices were good for the global economy, as they said that expensive crude pointed to robust consumption growth well ahead of demand, are now arguing the exact […]
China’s Damage Limitation: The Reserve Requirement Cut
By John Richardson DAMAGE limitation is the motive behind China’s decision cut its reserve requirement ratio (RRR) by 0.5% to 19.5%. (The RRR is the amount of money that banks have to set aside against this lending, and so the lower the percentage the more the capacity to lend). The decision, which was announced yesterday […]
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