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Pandemic leads to ‘baby bust’ as births decline in most countries

A year ago, many were suggesting the lockdowns might produce a “baby boom” as couples spent more time together. But early data suggests the world is instead seeing a “baby bust”. As Nikkei Asia reports: “Births (in December/January) have fallen between 10% and 20% in such countries as Japan, France and Spain — and even

The post Pandemic leads to ‘baby bust’ as births decline in most countries appeared first on Chemicals and the Economy.

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China’s dual circulation policy aims to reduce debt reliance

Every now and then, people wake up to the fact that debt is only good news when it adds to growth. Otherwise, it simply destroys value. China is usually the case study for this analysis, as the chart confirms. It shows the rise in debt from 2002, when official data begins, versus the rise in

The post China’s dual circulation policy aims to reduce debt reliance appeared first on Chemicals and the Economy.

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“They may ring their bells now, before long they will be wringing their hands”

The wisdom of Sir Robert Walpole, the UK’s first premier, seems the only possible response to this weekend’s headline from the Wall Street Journal. How can a National Emergency ever be the basis for a major rise in stock markets? Of course, we all know that stock markets have become addicted to stimulus. But the

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China GDP reports remain “man-made and therefore unreliable”

The blog got 54.8m results from Google when it entered the phrase “China GDP” this week.  The only problem, seemingly unrecognised by most analysts, is that China’s GDP report is a completely fictitious number, invented by the leadership each quarter to suit its own narrative. This sounds a bold statement, but it isn’t: China is the only country to […]

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China’s earthquake opens fault-lines in debt-fuelled ‘ring of fire’

We can all hope that China’s ‘collateral trade’ turns out not to be as big a problem as seems likely.  But history shows that this type of problem has a way of escalating once people start investigating more closely. Thus state-owned Citic revealed yesterday that it has lost $40m in the Qingdao scandal, as half of its […]

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China’s commodity imports have financed its property bubble

Today, the blog launches a major new Research Note in the ‘Your Compass on China’ series, produced in association with leading Hong Kong-based financial advisory firm Polarwide. Titled ‘Here today and gone tomorrow – a simple guide to China’s world of trade finance’, it is probably the single most important paper it will publish all […]

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Prime Beijing house prices drop 40% since December

China’s property market is the epicentre of the global debt bubble discussed yesterday.  It has been red-hot since urban residents became free to buy their own home in 1998.  Before then, they lived where the state told them.  With interest rates held low to boost state-funded infrastructure spending, people had few options for investing their money. The […]

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China’s PTA, PVC exports jump as it moves to preserve jobs

To assume, as they say is “to make an ass out of u and me”.  That was certainly the case last week, when financial markets assumed that China’s slightly better PMI index was a sign that its domestic economy was stabilising.  They had temporarily forgotten the key message of February’s Research Note, namely that the government would aim to […]

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China auto sales depend on lending and property bubble

The above chart is the blog’s simple guide to forecasting China’s auto sales.  We know from all the data that most Chinese are far too poor to afford to buy a car out of their income.  Average per capita consumer spending in the towns is just $2600/year, after all.  While rural incomes are only a […]

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China’s PE imports jump 26% as credit bubble peaks

Strange things are happening in China’s polyethylene (PE) market, as the chart shows: Imports suddenly jumped 26% in Q1 (red column) versus last year (green) This would be an extraordinary amount at any time, but especially now with the economy slowing It comes at a time when China’s own production continued to increase, up 8% As a result, […]

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China’s polyester market flashes red warning signals

China’s polyester market seems to be trying to tell us something quite important about the real state of China’s economy, as the chart above shows for the main raw material, PTA (terephthalic acid): It focuses on the margin between PTA prices and naphtha feedstock (Singapore basis) Normally this is a premium between $200/t – $300/t as shows […]

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Free China outlook webinar on Wednesday

The blog’s recent Research Note on the likely impact of China’s economic reforms has attracted enormous interest. As a result, it will hold 2 free webinars on Wednesday to discuss the outlook in more detail. The webinars will be co-hosted with John Richardson, author of the Asian Chemical Connections blog – and co-author with the blog of Boom, […]

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Interesting Quotes (7)

Every now and then, somebody in a senior position says something that really deserves to be noticed.  Often this is when they are in a state of Denial.  This was the case in the blog’s first post in the Interesting Quotes series, when CitiGroup CEO, Chuck Prince dismissed worries about subprime losses in August 2007, saying: […]

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China’s slowdown accelerates as IOUs substitute for credit

The end of Q1 seems a good moment to look back at the position of the benchmark markets in the IeC Downturn Monitor.  Compared to previous quarters, there has been surprisingly little movement: Benzene has remained the most volatile, with supply outages temporarily pushing up prices (green line) HDPE has trended higher, but these are […]

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Sentiment weakens as US stock markets wait for more QE

Sentiment, as measured by the IeC Boom/Gloom Index has weakened considerably over the past 3 months as the chart shows: It peaked at 12 in November, hitting its highest level since before the 2008 Crisis began (blue column) It then drifted lower in December, before rallying back to 9 in the New Year But now […]

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“Reservations are no longer necessary at many high-end restaurants”

Think back a moment to September 16 2008.  Newly released transcripts analysed by the Wall Street Journal and Financial Times reveal for the first time what was really going on that day at the world’s most important central bank. Lehman Bros, one of Wall Street’s largest investment banks, had just gone bust.  Merrill Lynch, another giant, had […]

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Global auto industry sales growth depends on China

Autos remain the world’s largest manufacturing industry, and the single biggest source of demand for chemicals and plastics.  According to detailed analysis by the American Chemistry Council, each new US auto is worth $3,539 in terms of sales – and involves a wide range of products including antifreeze, plastic dashboards, bumpers and windows, as well as upholstery […]

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“Disaster is still some way off” for Cyprus, as Germany prepares to vote

Back in April, the blog suggested that capital controls might remain for rather longer in Cyprus than the “few days or weeks” suggested by the central bank.  And a month later, the bank was still unrealistically claiming they would be lifted “as soon as possible”. Today, the blog’s own view that they could be in place “for […]

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Investors pay Switzerland to borrow from them

2 years ago, Italy was paying 3.82% to borrow for 10 years (red column). Spain was paying 4.11%. These rates were similar to the UK’s 3.07%.

A year ago (blue column), the world was clearly changing. This led the blog to introduce the concept of the…

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‘Moving forward in volatile times’ the motto for H2

The chemical industry has a long track record as a leading indicator for the global economy. Its position in the value chain means that it sees what is happening upstream in energy markets, and downstream in consumer markets.

Anyone studying Q2 resul…

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EU banks cut lending to the PIIGS by 23% of GDP

On 7 September 2008, in its now famous warning that a financial crisis was imminent, the blog noted that “‘Deleveraging’ is an ugly word, and it has ugly implications”.

The chart above shows just how ugly these implications are becoming for the PIIGS …

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"This is far worse than the banking crisis of 2008"

Long-standing readers will remember that then-UK Finance Minister Alastair Darling was the first Western politician to recognise in August 2008 the disaster that was about to hit financial markets.

Now out of office, his warning today therefore deserv…

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2012 Budgets

The blog will publish its fifth annual Budget Outlook next weekend. As usual, it is therefore time to review last year’s Outlook. Past performance may not be a perfect guide to future outcomes. But it is one of the best that we have.

The blog’s 2008 O…

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EPCA attendees worry about China slowdown

China was understandably a key item on most people’s minds at this week’s annual EPCA (European Petrochemical Association) meeting in Berlin. It has been the motor of global chemical demand growth over the past 3 years.

The blog’s discussions ident…