China’s housing bubble is not just about Shenzhen. It is the most obvious sign of problems ahead, as I noted last month. But as the chart above shows from the Wall Street Journal, total lending to the property sector has rocketed in recent months: More than one-third of all loans went to the sector […]
Chemicals and the Economy
Political risk rises as voters feel only the populists are listening
This week, the new UK premier, Theresa May, highlighted how the central banks have encouraged the populists’ rise: “We have to acknowledge some of the bad side-effects. People with assets have got richer, people without have not.” The problem, of course, goes wider than this. The continuing failure to recover from the 2008 Financial Crisis […]
Markets struggle with political risk as populist momentum gains
Markets have forgotten how to price political uncertainty in recent decades, as I discussed on Monday. They have become dependent on central bank handouts, and assumed that globalisation and trade agreements are permanent features of the economic landscape. Today, they are having to relearn, very quickly, what has been forgotten. My post a year ago […]
Central banks defy slowing global economy by destroying markets’ power of price discovery
Markets have one main function in life – price discovery. If I want to buy, and you want to sell, the existence of a market allows us to discover the price at which the market will balance in terms of supply and demand. History, however, provides many examples of times when rulers decided they knew […]