Since the start of the Crisis, many policymakers have chosen to look backwards rather than forwards. Instead of facing reality, the US has wasted $5trn on stimulus programmes and quantitative easing. Whilst China created a massive credit bubble by doubling bank lending in 2009 to reach 1/3rd of GDP. Yet in the end, demographics drive […]
Chemicals and the Economy
China’s producers lose pricing power
China’s economy is slowing rather fast. That’s the only conclusion to be drawn from the above chart. It shows a major collapse in producer price inflation (PPI), from July’s 7.5% peak to just 2.7% in November. The decline from September’s 6.5% level has been particularly dramatic, with the index down nearly 2/3rds in just 2 […]
EU leaders turn to Anger
Human beings go through a number of stages when confronted by a major change such as today’s Crisis. As first described by Elisabeth Kübler Ross, the process starts with: • Denial that any change is taking place • Then Anger at the implications of the change • Bargaining to reduce its magnitude • Depression as […]
DuPont warns and stresses “productivity initiatives”
By now, companies should be reordering for the New Year. CFOs have achieved their working capital targets for year-end. And the commercial people should be planning Q1 sales. So far, however, it seems that this restocking has proved rather weak. This parallels September’s disappointment, when the return from the summer holidays also failed to produce […]
India’s failed reforms leave food to rot
Many analysts have argued that demand in India could easily replace volumes lost due to a slowing Western economy. Sadly, this week has provided further evidence of why this is merely wishful thinking. As the chart shows, India’s GDP is the same size as Canada’s. But India’s 1.4bn people means its GDP/capita is only $1371, […]
Leaving the Eurozone creates practical problem
There is much discussion of countries such as Greece being likely to leave the Eurozone. Some even believe it is inevitable. But on a practical basis, how would it happen? This is a question that has been bothering the blog for some months. But with another crisis summit meeting about to start, it is no […]
Next ACS webinar – Thursday 15 December
Home appliance and furnishings demand declines, as home ownership rates fall
Western banks now demand higher deposits when lending to first time buyers. The Bank of England expects this to increase the average age at which first-time buyers buy a home, and reduce home ownership. This will hit demand for home furnishings and appliances, unless companies change their approach to the market. The Bank’s conclusions apply […]
China’s Minsky Moment may be starting
Long-standing readers may remember the video posted in January 2010 showing ‘China’s empty city’. This was the new city being built in Inner Mongolia, to help ensure local officials met China’s GDP growth target. Unlike the West, GDP in a communist country is a target, not a result. Thus East Germany under communism was alleged […]
Petchem trading slows as holiday period nears
The blog was in Singapore last week, running the final New Normal workshop of the year with co-author John Richardson. The main topic during the breaks was the continuing concern over China’s demand. This is reflected in the latest Downturn Monitor above. On the positive side, China’s PTA prices improved due to hopes of easier […]
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