The chemical industry continues to be the best leading indicator we have for the global economy. Whilst stock markets were continuing to move higher during H1, its depressed level of capacity utilisation was signalling that the economy was far more fragile than generally realised. Company results for Q2 reflect this concern. Of course some, tied […]
Chemicals and the Economy
US housing sees major change as middle-market is squeezed
US house prices have recovering for 3 years, as the chart from the Wall Street Journal confirms. It shows two lines: The dark blue line is money of the day: prices rose steadily from 1989, peaking in 2006 at 141% of 1989 value The grey line adjusts for inflation: “real prices” were negative until 2000, […]
Investors worry US ethylene expansions mimic mining downturn
I spent most of last week in New York and Boston, meeting with major investors. One key topic on all their agendas was the major downturn underway in the global mining industry. The connection with my visit was that some have already begun to worry that the planned US ethylene expansions may lead to a […]
China’s collapsing stock market underlines need for New Normal reforms
My latest post for the Financial Times, published on the BeyondBrics blog is below | Jul 27 15:08 | Red is a lucky colour in China, which is why share price displays go red when prices are rising. A green display means prices are falling, the opposite to stock markets elsewhere. There is a similar discontinuity between the short-term impact […]
BASF warns on outlook; Dow warns on China, ethylene cycle
BASF and Dow Chemical both warned on the outlook when presenting their H1 results last week: BASF CEO Kurt Bock warned, “We have for second quarter in the row in chemicals no growth worth mentioning . . . that is not a gratifying development. We have the impression that there is little growth dynamic at the moment and our customers remain extremely cautious […]
Speculators exit London’s high-price property developments
London house prices are one of the major faultlines in the debt-fuelled Ring of Fire created by central banks stimulus policies: It is crazy to have created a situation where potential buyers are asked to pay hundreds of thousands of pounds to buy even very basic apartments in unfashionable area It is complete madness that […]
GM says owning a car in a city “is the last thing you should do”
Something strange is happening in the European auto market, as the above chart from the industry association shows: Normally there are seasonal patterns, with March seeing the highest sales of the year But the trend of increase or decline is normally fairly stable in either direction This year, however, both March and now June have […]
H1 auto sales fall 2% in Top 7 markets, as BRIJ sales drop 15%
Hi data for auto sales in world’s top 7 markets is confirming my suggestion last October that global auto sales had reached their “top of the mountain moment“. Total volume was down 2.1% versus 2014, with sales in Russia and Brazil showing major downturns. As the chart shows, the sales decline is focused on the […]
Yellen offers hostage to fortune on US growth
Previous chairs of the US Federal Reserve had a poor record when it came to forecasting key events: Alan Greenspan, at the peak of the subprime housing bubble in 2005, published a detailed analysis that emphasised how house prices had never declined on a national basis Ben Bernanke, at the start of the financial crisis […]
China electricity consumption growth drops to 1% in H1
Latest data for China’s economy continue to suggest a major slowdown is underway: Rail freight, one of Premier Li’s key data points, was down 11% in January – May versus 2014 Total lending was down 15% in H1 versus 2014, with shadow lending down 50% And electricity consumption, his 3rd data point, was up just […]
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