Trade data for net US PVC exports seems to be trying to tell us something very important about the current state of the global economy. As the chart shows, based on data from Global Trade Information Services: Net exports failed to grow in 2013 (red column) versus 2012 (black) and were only up 2% versus 2011 […]
Chemicals and the Economy
China’s urban consumers depend on property ‘wealth effect’
One of the great myths of modern times is that China is now full of middle class people with Western levels of consumption. Nothing could be further from the truth. Annual per capita incomes have certainly soared over the past two decades. But the main impact has been to lift people out of absolute poverty, […]
“The dog ate my homework”: excuses for economic slowdown
There were never any excuses from policymakers during the BabyBoomer-led SuperCycle from 1983 – 2007. The Chairman of the US Federal Reserve, Alan Greenspan, came to be styled ‘The Maestro’. Whilst the Governor of the Bank of England argued that his efforts had created the NICE decade of Non-Inflationary Constant Expansion. Central bankers came to be seen as wise […]
US house price recovery “living on borrowed time”
Housing used to be the key driver for US chemical demand in the SuperCycle, and went into overdrive in the subprime era between 2003-6, when housing starts rose to 2 million/year. We don’t yet have December’s data, but we already know that 2013’s total will be only half this level, despite all policymakers’ efforts to revive the […]
Asian ethylene margins soar on China stimulus, plant outages
Volatility is one of the blog’s key themes for the next few years, as the world transitions to slower growth and a more regional economy. And the chart above from the latest ICIS pricing Asian ethylene margin report highlights this new trend very well: Margins jumped 42% last week to reach $290/t, based on naphtha […]
A little bit of China stimulus goes a long way in housing
It was only a “mini-stimulus” that was delivered by China’s new leaders in July. Well, thank goodness it wasn’t more, to judge by the above chart from Albert Edwards at SocGen. It shows how house price inflation has jumped in 69 of China’s 70 main cities between March and September: In March (orange column) inflation […]
Income and age will determine American’s future housing needs
Affordability is the key factor in today’s markets. And nowhere is this more true than in US housing. The subprime lending boom of the early 2000s is now long finished. And US GDP growth averages just 1.7% since 2000. So understanding the detailed picture of income levels is becoming critically important for forecasting future demand. Housing used […]
One in three US adults now in the New Old 55+ generation
“Its only when the tide goes out that you learn who’s been swimming naked.” We may soon discover the meaning of this wisdom from Warren Buffett, one of the world’s leading investors. The reason is that the macro trends that have driven growth in the global chemical sector are now turning. For the past five […]
Bank of England boosts UK house prices as foreign buyers flood into central London
Last week saw new Bank of England governor, Mark Carney, follow the lead of US Fed Chairman Ben Bernanke on trying to deliver a ‘quick fix’ for the economy by boosting asset prices – particularly house prices and stock market levels. But as the Bank of England chart shows, this means trying to return the ratio of house prices to earnings back […]
US housing starts stumble as rental demand weakens
US housing is core to the US economy. And as the US economy is 22% of the global economy, developments in housing matter to all of us. We learnt this during the subprime Crisis, when the blog’s warnings that the supposed boom was an illusion were ignored until too late. Now the same problem is developing again. Thus […]
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