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Chemicals and the Economy

US home ownership back at 1995 level as decline continues

  Conventional wisdom seemed to think the US housing report was positive this week.  But analysis of the data makes it hard to see why. One confusion comes from media use of the ‘seasonally adjusted’ number.  But why do we need an adjustment, when we have data going back to 1959?  It simply creates more potential for error.  […]

US housing fraud rises as first-time buyers priced out of market

Signs of stress seem to be appearing in the US housing market once more.  Thus the Wall Street Journal reports: “An estimated one in seven appraisals conducted from 2011 through early 2014 inflated home values by 20% or more..Bankers, appraisers and federal officials in interviews said inflated appraisals are becoming more widespread as the recovery […]

China’s commodity imports have financed its property bubble

Today, the blog launches a major new Research Note in the ‘Your Compass on China’ series, produced in association with leading Hong Kong-based financial advisory firm Polarwide. Titled ‘Here today and gone tomorrow – a simple guide to China’s world of trade finance’, it is probably the single most important paper it will publish all […]

Prime Beijing house prices drop 40% since December

China’s property market is the epicentre of the global debt bubble discussed yesterday.  It has been red-hot since urban residents became free to buy their own home in 1998.  Before then, they lived where the state told them.  With interest rates held low to boost state-funded infrastructure spending, people had few options for investing their money. The […]

China’s PTA, PVC exports jump as it moves to preserve jobs

To assume, as they say is “to make an ass out of u and me”.  That was certainly the case last week, when financial markets assumed that China’s slightly better PMI index was a sign that its domestic economy was stabilising.  They had temporarily forgotten the key message of February’s Research Note, namely that the government would aim to […]

China auto sales depend on lending and property bubble

The above chart is the blog’s simple guide to forecasting China’s auto sales.  We know from all the data that most Chinese are far too poor to afford to buy a car out of their income.  Average per capita consumer spending in the towns is just $2600/year, after all.  While rural incomes are only a […]

London house price bubble hits the record books

The UK no longer leads the world in soccer, as next month’s World Cup will confirm.  But it can still hold its own when it comes to creating house price bubbles. China would be the obvious winner of the World Bubble Championship, with Shanghai prices at an eye-watering 29 times average earnings.  But London would have […]

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