US inflation was last at 8.3% in January 1982. And then, the 10-year yield was 14.6. History may not be a perfect guide, but it is the best we have. So it might be worth planning for rates to go much higher than most “experts” expect, now that they have broken out of their downtrend.
Chemicals and the Economy
The Sentiment Index continues to be a reliable guide to the S&P 500’s performance
Most commentators chose to ignore the warnings on inflation and recession provided by chemical industry data. As a result, they have been blindsided by the speed and scale of the S&P 500’s downturn. But the Sentiment Index has proved far more reliable.
Smartphone sales continue to fall as consumers cut back
Consumers around the world are tightening their purses and cutting back on non-essential purchases, as the recession continues to develop and China’s real estate bubble bursts.
Queen Elizabeth’s death marks the end of an era for the UK
Truss will be the first UK premier since Churchill to operate without the Queen in support. And as Robert Shrimsley had already noted in the Financial Times: “Few would envy Truss this moment. She is going to have to be one of the great premiers just to be a merely good one.”
Food costs and interest rates rise as energy and fertilizer supplies are hit by the invasion
It’s going to be a very difficult winter. Most of the world will be impacted as Europe bids up energy/food prices to keep its people warm and fed. And it would never have happened if policymakers had recognised the importance of geopolitics, energy markets and demographics.
Jackson Hole is a chance to prepare for a financial shock
The problems began with the supply chain crisis caused by the pandemic. Russia’s war in Ukraine then created a further challenge. And now we face the risk of famine as fertiliser costs become unaffordable. Central bankers at their annual Jackson Hole get-together should therefore focus on preparing for the arrival of a potential Fourth Horseman of the Apocalypse, in the shape of a major financial crisis.
The blog returns on 28 August
The blog returns on 28 August
Prepare for the coming crisis
As the head of Germany’s Employers’ Associations warned last month: “We are facing the biggest crisis the post-war Federal Republic has ever had. We have to be honest and say: First of all, we will lose the prosperity that we have had for years”.
IMF warns the risks “for the economy are overwhelmingly tilted to the downside”
Millions of people around the world are already having to cutback on buying food for their families due to today’s high prices. By wintertime, the risk is that they will have to choose between buying food or heating their homes.
The blog’s 15th birthday – and the chemical industry remains the best leading indicator for the global economy
The US is moving into recession as the Atlanta Fed chart confirms. Chemicals have been warning of this for some time. But policymakers and commentators remain in Denial about the economy. They prefer to focus on their computer models, and ignore the real world outside their window.
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