A new report from Pimco, the world’s largest bond fund manager, makes it clear they share the blog’s worries about the increasingly negative impact of western central bank policy: “Central banks have reached a critical inflection point in which the negatives of their aggressive policies may be outweighing the positives and in fact hampering growth. […]
Chemicals and the Economy
10th ICIS Innovation Awards now launched
Innovation is the life-blood of the chemical industry. It is also a critical success factor as we transition to the New Normal. Many of today’s plants and processes are simply too old and too inefficient to remain competitive in a world of slow and volatile economic growth. Yet making the case for investment in new […]
US job growth remains slow as Boomers leave the workforce
Last week’s US jobs report contained some good news, but not very much: • Employment inched up again to 136m. This is still below the 2007 peak of 139m – and never before has the number of jobs failed to rise over a 6 year period • Equally, disposable income fell back in Q1 to […]
Global auto sales up 3%, as China’s luxury market stalls
Auto sales data is now available for the first 4 months of the year, covering the 5 key markets of China, US, EU, Japan and India. These account for 75% of global sales. As the chart shows: • Demand patterns in 2013 (red line) have been more volatile than in 2012 (green) • Total demand […]
Unique and timely insight on China from John Richardson
Credit where credit is due, is the blog’s motto. It would thus like to recognise the insight of co-author John Richardson in being one of the first people to warn publicly that the economies of China and India both faced enormous risks in their quest to reach developed country status. Writing 18 months ago, when […]
“Its going to be scary”
As the Financial Times wrote on Saturday: “Earlier this year, it all seemed so straightforward. Central banks printed money and proffered soothing words, and markets went up. Now, it’s getting more complicated.” In fact, nervous readers might want to stay away from financial markets for a while. Just 2 weeks ago, crude oil prices suddenly […]
Reshoring brings manufacturing jobs back to the West
Outsourcing and offshoring took off in western industry during the 1990s. The babyboomers’ demand supercycle meant new manufacturing capacity was urgently needed. And the entry of East Europe, China and India into the global economy offered a seemingly cheap way of achieving this. But today, new factors are reversing this trend. The tragic deaths of […]
Underwater mortgages temporarily support US house prices
US investors are continuing to excite themselves over the potential for a re-run of the sub-prime housing boom from 2003-7. Thus they welcomed last week’s news of higher house prices with a major rally, after having ignored earlier reports of a slower pace in housing starts themselves. As the chart shows: • Starts dropped back […]
What goes up, usually comes down
Something very strange has happened to oil prices since 2009, as the chart of the ratio between US oil and natural gas prices shows: • Between 1986-2008, the ratio averaged 9.6, and was typically in the 6 – 14 range (6 is oil’s relative energy content versus natgas, whilst 14 was seen during the first […]
China’s GDP data suggests rebalancing is now urgent
China has now published initial data on its key areas of GDP growth in 2012. As the chart shows, this highlights the major task ahead of the new leadership as they seek to rebalance the economy towards a more sustainable future: • Infrastructure (green) continued to increase as a share of GDP to 46% • […]
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