“Year after year we have had to explain from mid-year on why the global growth rate has been lower than predicted as little as two quarters back.” That was the comment, last August, from the new deputy chairman of the US Federal Reserve, Stanley Fischer. This year, he won’t have to wait until mid-year to start the […]
Chemicals and the Economy
Most oil producing countries have operating costs below $20/bbl
“I don’t take the view that they (OPEC) are in any way trying to threaten other suppliers. I think they’re really kind of on a classic price-discovery exercise, which is important for all of us as investors to know.” This was the analysis of ExxonMobil CEO, Rex Tillerson, in Houston last week. And he […]
China lending curbs will hit global property bubbles
China’s interest bill this year is around $1.7tn, according to ratings agency Fitch. And no, the “tn” isn’t a typo. China’s interest bill is indeed around the total size of India’s economy, and larger than the economies of S Korea ($1.3tn), Spain ($1.4tn) or Mexico ($1.3tn). Common sense tells us that no economy can afford […]
Global chemical slowdown highlights China impact
The global chemical downturn has now been underway for nearly a year. And latest data on regional production volume from the American Chemistry Council for March shows no sign of improvements, as the chart highlights: Global demand growth in March was just 2.9% (black line), versus the healthy 5% growth seen a year ago Asia has […]
Swiss pensions bankrupt by 2025: US Social Security by 2030
Nobody would imagine that the SFr 800bn ($840bn) Swiss pension scheme could go bankrupt. But Swiss pension experts suggest it “will be bankrupt within 10 years (without)…a radical overhaul of the retirement system.” The problem is simple – a combination of low/negative interest rates and an increase in life expectancy. A major analysis in the Financial Times […]
Propylene strength a major support for European petchems
Vast over-expansion is underway in the global petrochemicals industry, as companies rush to build new capacity at a time when demand patterns are going through major change. US companies and investors are worst exposed, as their plans are based on exporting polyethylene and other ethylene-based derivatives. There are a number of fundamental problems with these […]
Q1 auto sales rise just 1.9% in world’s ‘Top 7’ markets
Its hard to be optimistic about the outlook for the global auto market. The chart above of the Top 7 markets, which account for around 2/3rds of global sales, highlights the growing uncertainty. It shows Q1 sales in 2015 (blue column) versus 2014 (blue). Overall, these were up just 1.9% at 15.8m. And although the […]
China Q1 electricity consumption up only 1% as economy slows
More and more evidence is emerging of the major slowdown now underway in China’s economy. China’s leadership have warned this would take place since they took office 2 years ago. And they have reinforced the message in recent months with their focus on explaining the move into the New Normal and its consequences. A major interview […]
OPEC hit as ‘peak oil demand’ arrives and US imports fall
Oil market traders have been having fun in recent weeks, as they have managed to create guaranteed price movements every week: US oil inventory data is published on Tuesday and Wednesday This gives traders the chance to push prices lower as the inventories continue to rise US oil rig data is published on Friday This creates the chance to […]
Germany could face €86bn bill from a Greek default
Who would pay the bill, if Greece defaulted on its current €320bn debt ($340bn)? This is no longer just a theoretical question. Of course, we have all known since 2012 that Greece would never be able to repay its debt. But the EU covered up this hard truth by a ‘pretend and extend’ policy: The default deal deferred repayment […]
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