Companies and investors need to invest time now on having a genuine debate about the risks ahead. The regulatory failures of the past few days highlight what can quickly go wrong, if one hasn’t war-gamed out potential risks. As the saying goes, “Failing to plan, equals planning to fail”.
Chemicals and the Economy
Food prices hit record level as fertilizer costs/availability reduce farm output
As the World Food Programme warns, “High fertilizer prices could turn the current food affordability crisis into a food availability crisis, with production of maize, rice, soybean and wheat all falling in 2022.”
Clean energy set to squeeze fossil fuel demand as ‘the electrification of everything’ continues
Portugal is showing the way. Despite 6 months of drought last year, 57% of its electricity came from renewables. And its clean energy focus means it is becoming “one of the cheapest markets in Europe”. CO2 emissions will also have reduced by 75% in 2030 versus 2021.
The next car you buy will probably be Electric, and you may not need to buy another
As the photos from New York in 1900 and 1913 remind us, transitions happen very quickly once they get underway. One day, we are saying “it will never happen”. The next, we are telling our friends “I can’t understand why it took so long”. So it seems safe to assume that the auto industry will see major change in the next few years.
Plastics recycling starts to take off, and potential Winners & Losers emerge
Russia’s invasion has dramatically accelerated the need to transition from fossil fuels to renewables, and from single-use plastics to recycled product. In turn, this will create Winners & Losers. Some companies will decide to take advantage of the new opportunity. Others will continue to hope the issue will go away.
Smartphone market confirms major recession underway – 6th consecutive quarter of falling sales
The smartphone market has now been in decline for 5 years. And whilst the Fed would clearly love to get stocks racing to the moon again, history suggests that Apple’s CFO is likely to be right when talking about the importance of cost control for the future.
Japan’s premier warns of “social dysfunction” as ageing populations challenge Western and Chinese economies
Japan has wasted trillions of yen with its failed stimulus programmes. Had it devoted even a tenth of this money to developing a proper Retraining programme for people in their 50s/60s, it wouldn’t now be facing a major debt and currency crisis. The rest of the Western world needs to rapidly learn from its mistake.
Global auto fleet goes electric as “the electrification of everything” begins
The ‘digitalization of everything’ has transformed the global economy over the past 30 years. The rise of the internet is just one example. Now electrification is set to have a similar impact, starting with the world’s largest manufacturing industry. Fasten your seatbelts for the ride!
The end of stimulus, and the growing importance of demographics, means the economy could face a major downturn
‘Business as usual’ has been a great strategy for the past 40 years. But nothing lasts forever. It has now – like the central banks’ stimulus policies – hit the inevitable brick wall.
“FANGs” lose their teeth as stock markets relearn their key role of price discovery
Now, we are all starting to suffer for the central banks mistake in adopting Bernanke Theory. The bubbles they created are finally starting to burst as interest rates return to more normal levels. This will be very painful for all those who trusted them to manage the economy.
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