“Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough”. That was the statement by European Central Bank head Mario Draghi in July 2012, where he aimed to draw a line under the Eurozone debt crisis. Yet here we are in December 2014, […]
Chemicals and the Economy
Chart of the Year – China’s auto sales bubble begins to burst
‘How China fooled the world’ was the subject of an excellent BBC documentary early in 2014 by senior editor, Robert Peston. The BBC headline was as follows: “Now, Peston reveals what has actually happened inside China since the economic collapse in the west in 2008. It is a story of spending and investment on a scale never […]
Sanitation is the greatest challenge facing Modi
The Financial Times has kindly printed my letter, commenting on their editorial about Premier Modi’s economic policies in India. Sir, Your editorial “India’s Modi should act more decisively in 2015” (December 24) has too limited a view of the policies required to generate growth in India’s economy. With gross domestic product per capita of about […]
US shale gas bubble will end in tears for ethylene expansions
A return to lower oil prices is good news for the global economy. But it is bad news for all those who have invested in expanding ethylene production on the assumption that US gas prices would maintain the temporary advantage of recent years. As the chart shows: Oil (blue line) has around 6x the energy […]
The blog in 2014
Historians will probably agree that 2014 marked a turning point for the global economy. It was the year when China’s new leadership turned away from stimulus policies, which had been based on creating a wealth effect via a lending and property bubble. The impact of this change of direction is still hardly recognised in mainstream […]
A Christmas wish: focus on toilets to create growth in 2015
2.5bn people in the world still lack access to toilets, according to the World Health Organisation. That’s down just 7% from the 2.7bn people without toilets in 1990. What have we been doing over the past 20 years to allow this terrible situation to continue? Why have we not focused on this area as a […]
Fed jumps in to boost stock markets, yet again
Every time US stock markets weaken on a day-to-day basis, the US Federal Reserve now jumps in to support them, as the chart above shows: We saw this first on October 16, when the S&P 500 fell 5% in a week to 1862. In jumped Fed Governor James Bullard to calm market nerves by suggesting that the Fed should […]
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. […]
Oil prices, Russia, open new fault-lines in the ‘Ring of Fire’
One by one, the fault-lines are opening in the debt-fuelled ‘Ring of Fire’ created by the central banks. First published in June, the map above highlights where I believe these fault-lines run: China is the epicentre of the approaching earthquake – its manufacturing industry is now contracting Russia is in financial crisis, with interest rates at […]
70% of China’s auto dealers unprofitable, as lending curbs bite
Would anybody have believed these charts, if one had presented them as a forecast for auto sales a few years ago? Clearly not: Everyone knew that Europe was one of the world’s top 2 markets, and China was very small Europe’s average incomes were around $40k, whereas China’s were less than $5k even in the […]
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