The above chart is the blog’s best effort to correlate the change in China’s bank lending with the real economy. It shows electricity consumption (blue line) and lending (red column) since July 2008. Electricity consumption is an excellent proxy for the real economy, and probably more reliable than GDP figures, which are widely believed to […]
Chemicals and the Economy
Deepwater Horizon raises ‘licence to operate’ issues
The chemical industry can be very proud of what it has achieved with the Responsible Care programme since 1985. But it may need to consider how this develops, in the light of the Deepwater Horizon disaster. One key question emerged from this week’s US Congressional hearing with the heads of ExxonMobil, Chevron and Shell. It […]
US housing starts down 17% as tax incentives end
Spring should be a boom time for building new homes in the USA. But in fact, May’s single family housing starts (bottom chart) fell 17.2% versus April, as the $8k tax credit ended. Yet affordability should be high, with prices down 30% from the peak, and mortgage rates at the lowest levels for decades. This […]
EU auto sales fall further 9% in May
The blog has been out and about in recent days, visiting some of the major European chemical companies. Most continue to see strong order books. In normal circumstances, this would lead to considerable confidence about the outlook for the rest of the year. However, there are increasing fears, as Nigel Davis has noted in ICIS […]
Western retailers rely on luxury or budget sales
Consumer spending, particularly in the developed economies, is critical to the chemical industry. And there is increasing evidence that a two-tier pattern is developing: • Wealthier consumers are maintaining their spend, helped by lower interest costs on mortgages and recent stock market gains • Lower and middle-income consumers remain under pressure, as they are more […]
“The name is Bond, Japanese Government Bond”
The blog, an old-fashioned romantic, has always thought that flowers were the way to woo a lady. But apparently no longer in Japan, according to government adverts. Bloomberg reports the Ministry of Finance is advertising Japanese Government Bonds (JGBs) under the slogan “Men who hold JGBs are popular with women!!”. The campaign, developed by Japan’s […]
China focuses on domestic issues, risks US anger
China is a very difficult country for foreigners to understand. The blog suspects that the best approach is to apply Winston Churchill’s insight on Russia, namely “I cannot forecast to you the action of Russia. It is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is […]
Obama’s BP attack will impact chemicals
For the past 20 years, the chemical industry has been making steady progress in improving its environmental, health and safety performance. More recently, security has been added to the list of key items covered by the voluntary Responsible Care initiative, which covers c90% of chemical production. Now, however, this enormously important activity has moved into […]
G20 abandons the Stimulus economy
Politicians finally seem to be giving up on the Stimulus economy. 9 months ago, the leaders of the G20 Group (the world’s major economies) were congratulating themselves on having delivered “the largest and most coordinated fiscal and monetary Stimulus ever undertaken“, and claiming “it worked“. Now, Germany, Europe’s largest economy, has announced €80bn ($96bn) of […]
USA money supply slows to near-record lows
“Money makes the world go round” as the song from the musical Cabaret tells us. But the chart above, from BofA Merrill Lynch, suggests there isn’t too much money circulating in the world’s largest economy today. It shows M3 (the broadest measure of money supply). Merrill note that its growth is now close to the […]
Jump to page: