Saturday’s blog post highlighted the risk of a hard landing in China. This risk is very real, and is centred on the government’s need to achieve a difficult balance between reducing today’s high rate of food price inflation, whilst not collapsing the property market. House prices are now falling in 60 Chinese cities. An excellent […]
Chemicals and the Economy
China’s inflation at new high, bank lending slows
The blog continues to worry about signs of a slowdown in China. Major commodity trader, Glencore, said this week “we see a pullback in China and it will continue“. This challenges the views of Dow CEO Andrew Liveris last month, and Rhodia CEO Jean-Pierre Clamadieu – who said last week he saw “no material signs […]
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 […]
US housing starts disappoint, again
US housing used to be one of the largest chemical markets in the world. In 2006 it was worth $35bn, with 2.2 million new homes each using $16k of chemicals, according to American Chemistry Council (ACC) estimates. Yet as the chart above shows, it has completely failed to recover since the financial crisis began: • […]
Buy a US home – get a $17k car free
The New Normal has definitely arrived in the US housing market. US new home sales are down 80% from their peak, and builders are getting desperate. Offers in the Chicago area now include a $17k credit for a GM car, when a buyer closes the deal. As the New York Times comments, “a long-term shift […]
China’s empty shopping malls
The South China Mall opened nearly 6 years ago. Nearly 3 times the size of Minnesota’s vast Mall of America in the USA, it supposedly symbolised China’s arrival as a consumer power. But as this Australian TV video shows, the Mall today is virtually empty. As are numerous other shopping malls built more recently. Yet […]
China’s inflation out of control
China’s inflation hit 5.4% last month. As the chart above shows, it has more than doubled over the past year. And food prices jumped 11.7%. Clearly, inflation is now out of control, with the Ministry of Finance admitting the situation is “severe and hard to handle“. A sign of the scale of the problem is […]
US house starts remain at all-time lows
Changes in US housing values continue to exert a larger and more important impact upon household consumption than do changes in stock market values“. That’s the conclusion of an important new study by the developers of the main S&P Case-Shiller US House price index. The chart above, based on US Census Bureau data, shows the […]
China has “60% risk of banking crisis by 2013”
China’s housing market seems to be facing the threat of a major downturn. That is the only conclusion to be drawn from the rising sense of concern being expressed by policymakers and the official media. Last year, China’s Academy of Social Sciences estimated that “there are 64.5 million empty apartments and houses in China’s urban […]
China battles food and house price inflation
When China announced that inflation had reached 5.1% in November, the authorities insisted it was only a temporary peak. But this seems less likely today, with January’s inflation still at 4.9%. The surge in food prices is very worrying. They jumped 10.3%. And with a major drought underway in the North East, there is a […]
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