Optimism over the outlook for the US housing market has formed a key part of the global economic Recovery Scenario in recent months, as housing used to be one of the main supports for the economy: During the BabyBoomer SuperCycle, large numbers of new houses were required to house the Boomers as they settled down and […]
Chemicals and the Economy
Aluminium shortage “temporary and artificial” says world’s largest buyer
When was the last time you told your customers that they would have to wait 570 days for delivery of material for which they have already paid? You’ve never done this? Well, you need to take lessons from those super-smart people who own the aluminium warehouses, such as Goldman Sachs (pictured above by Reuters). As the blog […]
Global auto industry sales growth depends on China
Autos remain the world’s largest manufacturing industry, and the single biggest source of demand for chemicals and plastics. According to detailed analysis by the American Chemistry Council, each new US auto is worth $3,539 in terms of sales – and involves a wide range of products including antifreeze, plastic dashboards, bumpers and windows, as well as upholstery […]
A day in the life of an “activist” fund
A prominent “activist” fund in New York has told Dow Chemical to spin off its performance plastics, performance materials and feedstocks-and-energy units. The news led the blog to imagine a fictional scene in the offices of Activists-R-Us fund last Tuesday morning, as the news came through. Any resemblance to actual events is purely coincidental, as they say in movies. […]
China’s new policies send earthquake tremors through markets
The blog used the metaphor of a hurricane in 2007-8 to describe the likely impact of the looming financial crisis. Thus in July 2007, it discussed the potential for a “global hurricane” to develop. And it repeated this metaphor as the crisis built, until writing in September 2008 that “the financial hurricane had arrived in New York” with the […]
The Deng, Jiang model for China’s economic growth under Xi
Major change is already underway in China, with potentially enormous implications for all of us. Corruption is being stamped out via a policy of ‘shock and awe’ Similarly, wasteful lending is under attack in both the official and the so-called ‘shadow banking’ sectors Thirdly, pollution is being tackled by literally ‘sending in the bulldozers‘ to […]
From Jiang to Hu and the lost decade
President Jiang Zemin inherited a difficult economic and political situation when taking power in 1993, as did Deng in 1977 and current president Xi last year. Jiang had to set in motion China’s second economic cycle of the post-Mao era, or risk seeing the country fall back into poverty and the political turmoil of another Cultural Revolution. Similarly today, […]
Deng’s economic policy in China’s post-Mao period
China’s economic policy has gone through 2 complete cycles since Chairman Mao’s death is 1976. Under new president Xi, it now seems to be about to start a 3rd cycle. If this cycle follows the pattern of the previous cycles, it will have very major implications for anyone doing business with China, either directly or […]
You can’t print babies to create new demand
What would you have done 5 years ago, in 2009, if you had been given $16tn to restore global economic growth? Would you have boosted spending in areas such as education, health and infrastructure in the belief this would create a sustained boost to economic capability? Would you have cut taxes in order to encourage entrepreneurs to develop new businesses and promote […]
US markets see Happy Days again
New Year optimism over the economic outlook is breaking out all over the USA. Weak employment numbers for December were ignored, as were weak data on housing markets. Whilst prices for benzene, the blog’s favourite sentiment indicator, not only jumped to a record high but dragged European levels to an all-time record as well. Happy Days are clearly […]
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