By John Richardson THE above infographic explains the end of the economic Supercycle: •During the 1980s/1990s, the BabyBoomers – the largest and wealthiest generation that the world has ever seen – entered the Wealth Creator generation (those aged 25 – 54), when income and spending peak •They powered the SuperCycle. •The world’s largest economy, the […]
Asian Chemical Connections
US Split Into Two Countries And Both Must Prosper
By John Richardson WHAT is the most important job for any politician? Ensuring the long term economic health of her or his country. And in the ideal world, our politicians should pick the policies that get this essential job done, whether they are from the left, the right or the political centre ground. Who cares […]
US Needs A New Normal “Permanent Study Group”
By John Richardson A LOT of the discussions taking place in and around last week’s American Fuel & Petrochemical Manufacturers International Petrochemical Conference (IPC) in San Antonio, Texas, was, of course, around oil prices. Lower crude prices means less of a production cost advantage for the US petrochemicals industry, which is predominantly based on natural […]
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 […]
US Petrochemicals: Three Predictions For 2015
By John Richardson AS you can see from the table below, there are no less than 12 US ethane-based cracker projects being planned with lots of associated downstream capacity. Theoretically, this represents: 14.8m tonnes/year of new ethylene capacity at these 12 proposed facilities. There are also eight planned expansions of existing plants, adding up to […]
US Petrochemicals Will Suffer From “The Blame Game”
By John Richardson THE chat below provides some very instructive reading as it shows that: Since 2000, overall real consumption in US polyethylene (PE) has fallen from around 12.5m tonnes to 12.3m tonnes (real consumption is domestic production plus imports, and then minus exports, with end-year adjustments made for any inventory distortions). Low-density PE […]
Another Failed US “Wealth Effect”
By John Richardson HERE are some alarming facts about the US economy: The wealth of the average American tops $301,000 per adult, which left the US in fourth place in the latest Credit Suisse Global Wealth report. But median wealth was a mere $44,900 per adult. That was only good enough for 19th place in […]
China, The US Stock Market And Overvaluation
By John Richardson THE US economist, Robert Shiller, has a very good track record in identifying when bubbles have become inflated. For example, as early as 2003, he foresaw the dangers of the US housing bubble. And so the blog thinks it is worth listening to him when he warns that: The US stock market […]
What A “Low Growth World” Really Looks Like
By John Richardson ONLY six new US crackers would be built over the next five years because of rising construction and labour costs, said Dow Chemical’s CEO, Andrew Liveris, in an earnings conference call last week. This would be out of the 12 crackers that have been announced (see the above table). Demand would therefore […]
China: How Conventional Wisdom Becomes Conventional Wisdom
By John Richardson HOW does conventional wisdom – i.e. the opinion of the majority – become conventional wisdom? This is a subject that the blog pondered over the last few days as it wandered around Euro Disney. Unfortunately, Mickey, Donald and his pals weren’t able to give us an answer. The reason why we dwelled […]
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