The World Cup runs till December 18. That’s a long time for Chinese viewers to ask themselves “Why am I still locked down, when the rest of the world is living a normal life again”? And in the background, the real estate bubble continues to burst.
Chemicals and the Economy
Global economy set to go ex-growth as world population hits 8bn
Underlying growth has been slowing since 2000 as more people joined the Perennials generation. Now, the bursting of the central bank stimulus bubbles – combined with the impact of Russia’s invasion – will likely cause the global economy to go ex-growth.
‘The chemical industry is screaming “Recession”‘
The chemicals industry is a bellwether for the global economy and its message couldn’t be any clearer:
A severe global recession is imminent.
Scenario planning key amid volatility
Russia’s invasion is a major wake-up call about the danger of assuming business will always be “as usual”. The window for investing in future growth is starting to close. As Hemingway warned in “Fiesta”, major changes (such as Net Zero) occur “gradually, then suddenly”.
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.
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.
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.
China’s housing bubble starts to deflate
But now, the bubble is starting to deflate, as the zero-Covid policy cripples the economy. GDP grew just 0.4% in Q2. Beijing is issuing record amount of debt, but confidence has gone. Prices for unsold apartments are being discounted. And developers’ cashflow is being hit by mortgage strikes for unfinished apartments.
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