By John Richardson The ABOVE CHART shows that lending via China’s shadow banking system fell by no less than 70% in January-February 2018 over the same period last year. This follows the 90% year-on-year fall in January 2018. The latest data underline the key conclusion that lending via the highly speculative shadow lending system is […]
Asian Chemical Connections
China Shadow Banking Squeeze Threatens Global Economy
By John Richardson THE trend that I identified last August is continuing. China is in the midst of a major contraction in lending via its highly unregulated, and so very risky, shadow banking system. Last year we saw a big fall in shadow lending, but now it has totally collapsed. In January, shadow lending was […]
Petrochemicals Destocking Phase Likely As Crude Volatility Increases
By John Richardson WE COULD now be in a destocking phase in petrochemicals markets as oil prices are falling on a surge in US production. This would obviously mean lower petrochemicals pricing, leaving companies that have overbuilt raw material inventories with substantial financial losses. I hope that most companies have been prudent. In January, the […]
The Dollar, Yen and Euro Battle: Implications For Crude Oil
By John Richardson STILL don’t buy the argument of the role of central bank money in distorting the oil prices, which I made last Friday when I argued that is more of this cheap money that is behind today’s oil price rally? Then also consider the role of currencies in all of this. Hedge funds […]
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 […]
China To Follow In America’s Oil And Gas Footsteps
By John Richardson DURING the economic Supercycle it all worked beautifully, as the above picture indicates. China sold stuff to the West and then bought lots of US Treasuries from their earnings in order to keep US interest rates low. This enabled US consumers to buy even more shirts, washing machines, refrigerators, TVs etc from […]
China Hints At Yuan Depreciation
By John Richardson LABOUR markets are tight in China and so on the surface there appears to be no great pressure on Beijing to attempt to export its way out of an unemployment crisis. But what happens if, as we suspect, real GDP growth has fallen to 4% or even lower? The government, despite its […]
The False Promise Of US Petrochemicals?
By John Richardson THE remarkable shift in the competitive landscape of petrochemicals resulting from shale gas was highlighted yesterday in an excellent post by our fellow blogger, Paul Hodges. Drawing on data from the NPRA, with analysis from the ICIS data and analytics team and Bob Townsend of International e-Chem, Paul shows the steep rise in ethane […]
Indian PP Growth On The Right Track
Here’s the stereotype…. Source of picture: www.watblog.com By John Richardson WE talked last week about how emerging markets continue to astound when it comes to demand, meaning that we might have to take a long and hard look at the parameters used to measure growth. Further support for this argument came from a visit […]
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