China’s credit bubble is one of the largest the world has ever seen. This is true not only of its total size, but also in relation to GDP. The history of credit bubbles is very clear about what happens next. Anyone who has followed the US subprime lending disaster will know the script already. But […]
Chemicals and the Economy
Protectionism moves closer as countries try to devalue
A year ago, a panicked Federal Reserve introduced its QE2 programme. One of its key aims was to kick-start US growth via driving down the value of the US$ and boosting exports. Since then: • The US$ has fallen, and US exports have increased • But other major countries have become alarmed about the impact […]
Goldman halves global ethylene growth estimate
Goldman Sachs today halved its estimate for global ethylene growth to ~2.5%, and slashed its earnings estimates for some major US companies. Analyst Robert Koort warns: “Our outlook for earnings growth has decelerated substantially in recent weeks … Our economists now expect US GDP to grow only 1.7% in 2011 and 2.1% in 2012 vs. […]
Eurozone moves closer to crisis
New analysis by Bloomberg supports the blog’s view last month that the arrest of former IMF head Dominique Strauss-Kahn (DSK) probably marked a critical turning-point in the Eurozone debt crisis Not only was DSK no longer able to persuade German chancellor Merkel that the problems needed just “a little more time, a little more money”. […]
ACS webinar tomorrow
The blog was delighted to learn last night that 400 people have already registered for the next American Chemical Society ‘Chemicals and the Economy’ webinar. This takes place tomorrow, July 7, at 14:00-15:00 pm US EDT. It will focus on the transition now underway to the New Normal, and the challenges this presents for companies […]
An unmanaged Greek default gets closer
The Dominique Strauss-Kahn affair may come to be seen as a critical turning point, when the story of the Greek default is written. The then IMF head was en route to meet German Chancellor Merkel, when arrested in New York last month. He had been at the forefront of the campaign to pretend that Greece […]
55+ year olds will change chemical demand
Last week’s European New Normal seminar built on the successful Q1 launch in Singapore. Attendees came from a wide variety of businesses. This led to very lively discussion and workshops, as people debated the likely impact of the major demographic changes underway: • There was a 44% increase between 1970-2010 in the number of 25 […]
Greece needs a managed default
Many Greeks have always preferred not to pay taxes, and to retire in their 50s. This lifestyle was well understood by their new partners when they joined the Eurozone a decade ago, since when German/French banks have happily funded it with support from their governments. The chart, from the Bank of International Settlements (the central […]
Global stock markets slide as demand disappoints
It is now 5 weeks since the IeC Downturn Alert was launched. The chart above therefore updates the blog’s regular review of financial markets, showing how these have moved over the same period. Most are down around 4%-5%. Russia is the worst performer (down 8%) and Brazil the best (down 3%). But government bond prices […]
The tide of European debt default keeps advancing
A thousand years ago, the Viking King Canute had himself carried into the sea by his courtiers. He was the most powerful king of his time. But by showing that he could not turn back the incoming waves, he hoped they would understand that he was not all-powerful. This is a lesson still to be […]
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