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Today’s energy crisis exposes the risk created by governments’ addiction to debt since 2008. So instead, as with a diesel export ban, they risk making a bad situation even worse.
Global interest rates jump as energy crisis builds ahead of the winter Read More
Wars are always inflationary. And the Iran and Ukraine Wars are following this pattern. Inevitably, this inflation will continue to work its way down the value chain. As chemicals are warning, higher prices and shortages almost certainly lie ahead.
Chemical and diesel markets warn of rising prices, potential shortages ahead Read More
European and Asian buyers need to worry about whether US exports of transport fuels will continue in the autumn as the US midterm elections loom. The risk is that the White House won’t want the domestic market to go short to support exports.
Oil product shortages and price hikes seem inevitable as Gulf War moves into 6th month Read More
Two major wars are underway in Europe and the Arabian Gulf. The IEA continues to warn that they have already created “the largest energy supply disruption in history”. And now, it seems financial markets are waking up to the major risks created by the $2.6tn AI bubble
If Trump now walks away, he will leave Iran with control of Hormuz. But he will need a lot of ‘boots on the ground’ to invade a country of 93 million people.. As history confirms, air power alone is unlikely to win the war
Brent returns to $100/bbl, with 25% of global output now impacted by war Read More
Apple’s massive price rises highlight demand destruction in action. Suddenly, prices are going up, not down. The longer the wars and the AI bubble continue, the more prices and inflation will rise as supplies reduce
Smartphone sales collapse confirms War and AI-related demand destruction is now underway Read More
The question is whether normal volumes of oil and gas will now start to flow again though the Strait? If they don’t, then an increasing number of major storage points will join Cushing in being at ‘tank bottoms’. And rationing will start to become inevitable, as the IEA warned in April.
Trump confirms oil reserves are down to just 4 weeks Read More
The World Bank, IMF, IEA and WTO have all warned that the crisis risks spiralling out of control:
“If shipping flows do not return to normal, continued rapid depletion of global oil inventories ahead of peak summer oil demand in the Northern Hemisphere would present increasing risks for fuel security, market conditions, and broader economic resilience.”
Global risks rise as Hormuz remains shut and supply chains start to buckle Read More
US inflation risks are rising as the Hormuz closure enters its 4th month. Inflation rose to 3.8% in April. It was just 2.4% in February before the US/Israel war began. And the upward trend is set to continue
US inflation risks rise as Hormuz closure enters 4th month Read More
The IMF is warning that “Heightened macro risks and the prospect of tighter monetary policy could trigger a sudden repricing by financial markets—with much lower asset valuations, higher risk premia, more capital flight, and dollar appreciation”.
IMF warns on inflation and recession risks, as Iran war continues Read More
The history of energy crises suggests that today’s supply chain surge will likely be followed by recession. Buyers will suddenly start destocking again, as they realise consumer demand was actually slowing, whilst they were busy increasing inventory.
Today’s oil/natural gas price rises will likely repeat previous ‘boom and bust’ cycles. Companies therefore need to (a) prepare for the short-term ‘boom’ and (b) plan in detail for the potential recessionary ‘bust’ which will follow it.
Strait of Hormuz closure risks major economic impact Read More
The Middle East crisis highlights the need for Europe to rebuild its competitive edge. This will need new business models, to address today’s market needs. This will create major new opportunities for forward looking companies
EU’s new ‘One Europe, One Market’ strategy set to challenge China, USA Read More
The Strait of Hormuz has never been closed before. So we are in uncharted waters. And President Trump’s plan to provide naval escorts to reopen it, creates a new element of risk. What would happen if an Iranian drone hit a US warship?
Middle East turmoil highlights risks to energy and food supply – and Saudi’s water Read More
As German Chancellor Merz emphasized, “Two or three years ago we would probably not have had a discussion similar to the one we have had today.. We are confronted by a completely new geopolitical situation and we are willing to stand up to this geopolitical reality. But Europe will be able to hold its own only if we are competitive.”
European leaders rally to support crisis-hit chemicals industry Read More
Stimulus debt has created a K-shaped economy. The top 10% of US earners account for nearly half of all consumer spending, as the chart shows from JP Morgan.
Reckoning looms for central bank stimulus as demographic crisis builds Read More
2008 saw the US subprime crisis become the Great Financial Crisis. Now 2026 seems set to be the year when China hopes to solve its ‘subprime on steroids’ crisis. But its fundamental problem – the lack of babies – seems as far from solution as ever.
US automakers have been around a long time. It is too early to write them off. But Trump’s EV restrictions and their lack of robotaxi options suggests they risk running out of road sooner rather than later.
US automakers running out of road due to lack of EV and robotaxi options Read More
Yesterday’s world is fast disappearing. Future Winners will be those who develop the new business models needed today.
One door opens as another closes for the chemical industry Read More
Please join us for the next ACS Chemicals & Economy webinar next Thursday – Responding to Uncertainty
ACS Chemistry & the Economy webinar next Thursday – Responding to Uncertainty Read More
Tariffs, like interest rate changes, will take 12-18 months to work through the global economy. As always, the chemicals industry is providing early warning of what is around the corner in 2026.
President Trump’s tariffs change chemical industry business models Read More
The chemical industry is critical for the entire European economy. As the European Commission itself has acknowledged, “the sector is vital to Europe’s economy, underpinning the manufacture of almost all goods”
Companies have to focus on managing the things they can control. Essentially, this involves a return to the national/regional business model that operated until 1989
Survival is the first priority for European chemicals Read More
As the EU Commission President warned earlier this month, “Battlelines for a new world order based on power are being drawn right now. Yes, Europe must fight.”
The chemicals industry is key to winning this fight. It is now time for governments to step up and support it.
Petrochemicals has become a major battlefield for producers in China, the USA and the Middle East. They are the ‘elephants in the market’. And so it makes sense for Europe to focus instead on ‘local-for-local’ opportunities.
The end of globalisation creates new opportunities for European companies Read More
The good news is that we do know what needs to be done. But so far, the necessary sense of urgency is missing at government level. The industry can’t afford another 2 years of talking. It needs action and support now, if it is to survive.
European chemical companies face critical decisions about their future Read More
We are living through a 3rd paradigm shift since the end of World War 2. Today’s risks have been building for some time. But like the story of the frog in the saucepan, the world has been slow to notice that the water is starting to boil.
Dow Chemical’s Q2 results highlight the risks. It lost $801m and halved the dividend. And its CEO called for action to “restore competitive dynamics”
Europe’s salt-based chemical industry confirms major downturn Read More
Europe cannot allow its chemical industry to close. That would risk the collapse of its economy as the European Commission confirms. So we are likely heading back to the Trade Wars of the 1930s, with protectionism the probable outcome.
House market crashes usually start slowly, as sellers hold out for a price recovery that never comes. But then, the risk is that prices begin to slide as the 3Ds – Divorce, Debt and Death – create forced sellers.
Transport is responsible for millions of jobs and 60% of oil demand. China’s auto market matters more than anywhere else. Unfortunately, it’s outlook seems very uncertain. It has the best Electric Vehicle technology in the world. But now, companies are in a major fight for survival
China’s auto industry seems set to be the next bubble Read More
It would seem prudent to plan for further escalation of the military and trade wars in H2. Countries will likely continue to join trading blocs to counter Trump’s tariff war. And defence spend will further increase as the Middle East/Ukraine wars escalate
Middle East and Ukraine wars add to trade war risks for the global economy Read More
Geopolitics have now replaced economics as the key driver for decisions. We are going back to the world of the Cold War before the fall of the Berlin Wall in 1989. It seems likely to be a very bumpy ride.
Chemicals hit as Trump’s Tariff War becomes a Trade War Read More
The key issue for your Action Plan is to focus on demand. 3 key questions dominate. Will your customers survive the Tariff War? Will your suppliers survive the Tariff War? What can you do to help them survive?
Companies have less than 90 days to plan for the Trump 2.0 Tariff War Read More
The US economy is most at risk from the new policy. But President Reagan’s warning applies to every country trading with the US: “Then the worst happens: Markets shrink and collapse; businesses and industries shut down; and millions of people lose their jobs.”
President Trump’s trade war risks crashing the global economy Read More
History shows that moves towards European integration have often been turbo-charged by the need to respond to crisis. Or as German philosopher, Friedrich Nietzsche, once noted: “What doesn’t kill me, makes me stronger”.
Europe’s new defence and infrastructure spend will be a game-changer for its economy Read More
The Rules for doing business have to change. As NATO’s leader, Mark Rutte, has warned, Europe needs to “Raise defense spending or start learning Russian”
6 ‘Rules for Success’ as tariff wars and Europe’s Clean Industrial Deal begin Read More
Living longer should be a great opportunity for all of us. Today’s problem is that policymakers around the world have refused to accept that demographics are destiny. All of us now have to face the challenge of unwinding the mess they have made.
China’s property crash has already destroyed $18tn of household wealth – where next? Read More
“The Dumbest Trade War in History. Trump will impose 25% tariffs on Canada and Mexico for no good reason.” Wall Street Journal editorial
Time is not on Europe’s side. Hopefully, this crisis will lead policymakers to take the urgent actions that are now essential.
Europe’s chemical industry, and its economy, faces existential challenge Read More
Europe has been built through crisis since the end of World War 2. Today’s economic and political crises require a similar focus on reinvention.
Europe’s economy loses its “engine”, as France follows Germany into political turmoil Read More
Please join me for the next ACS Chemicals & Economy webinar on Wednesday, at 2pm Eastern Standard Time, USA
Today’s population growth is mainly due to increasing life expectancy, not babies being born. And these Perennials 55+ are the most under-served generation in history. Companies who pivot to meet their needs are likely to be very successful
Companies need to refocus to avoid over-capacity problems ahead Read More
Demographic changes are transforming the nature of demand in all major industries. The highly-profitable middle market is disappearing. Companies and investors need to abandon ‘business as usual’ strategies and refocus on these major changes.
The key is to rethink the business and become demand-led. And the good news is that companies are now starting to explore this option.
Chemicals industry starts to focus on Reinvention options at Berlin conference Read More
The real “October surprise” for markets might be to find out that central banks are powerless against today’s major geopolitical risks.
Oil market developments need very careful attention. If prices do now fall below $50/bbl, then central banks will likely rush to make major cuts in interest rates. And that will make deflation even more likely.
Deflation risks rise as OPEC aims to regain market share and cut oil prices Read More
China’s problems are spreading to the rest of the world. Not only is it exporting deflation, as its Producer Prices fall. But also, and understandably, consumer countries are introducing trade barriers to protect their own industries
China’s economy risks heading into recession as its Producer Prices enter deflation Read More
The two super-critical ‘dividends’ of the past 30 years are now reversing. The ‘demographic dividend’ of constant growth and low inflation created by the BabyBoom generation has ended, along with the ‘peace dividend’ created by the end of the Cold War in 1989
It’s our 17th birthday – and the world is looking very different from when we started Read More
Please join me for the next ACS Chemicals & Economy webinar on Thursday, at 2pm Eastern Standard Time, USA
Geopolitics are starting to fragment the global economy again. Economics are no longer the key driver for decisions. And so we need to refocus on the geopolitical risks ahead.
Chemical prices start to slide in Asia and Europe, as summer slowdown starts early Read More
China’s housing inventory is now at a record 25 months. Prices/demand continue to fall. And local government land sale income has already fallen 1/3rd since 2021 to $800bn, with a further 10% fall to expected this year. And Daiwa suggest total local government debt has already reached $14tn.
As Hemingway noted, everyone is your friend when things are going well. But as countries and individuals are now starting to discover, the hangover when the party ends can be a painful experience.
Resilience requires companies to refocus downstream and diversify their portfolio. They also need to be clear about the value proposition for their target market – are they providing Value, or Luxury? Rethinking, repositioning and restructuring are now all key to survival and future profit.
Rethinking, repositioning and restructuring are now essential for industry survival Read More
We are living in very uncertain times. Major wars are underway in Ukraine and Middle East. And the concept of ‘Business as Usual’ is returning to the 1970s model – of disruption and military conflicts.
Demand patterns are changing rapidly. We now have a demographic deficit, rather than a dividend. And the peace dividend has also disappeared.
The demographic and peace dividends created by the Boomer SuperCycle are disappearing Read More
The growing disruption in the Suez and Panama Canals is set to encourage more companies to move to ‘local for local’ supply chains. These are not only more resilient, but also make firms more agile – and reduce their carbon emissions.
Demographics are taking demand patterns in completely new directions. Sustaining future growth now depends on successfully developing and implementing new policies, focused on the opportunities offered by the emergence of the Perennials 55+ cohort.
China and most Middle Income countries seem destined to grow old before they become rich. As Pew Foundation data shows, China has just 23m people who earn >$50/day in $2011. India has only 2m.
Middle Income countries face a real risk of “growing old before they become rich” Read More
Join Paul Hodges of New Normal Consulting and Mark Jones of MJPhD, LLC as they share data and their observations on what is affecting the chemical economy, what tough decisions lie ahead, and predict the factors that will shape industry in the near future.
Chemistry and the Economy: Looking forward to 2024? Read More
We don’t often use the word “impossible” in the newsletter. But in this case, it is clearly impossible for GDP to continue to grow in the major Western economies.
Demographics are destiny for the global economy, as central banks start to realise Read More
“Every year of the baby steps we’ve been taking up to this point means that we need to be taking bigger leaps with each following year, if we are to stay in this race. The science is absolutely clear.”
COP 28 needs to see words translated into action, as carbon emissions have to peak in 2025 Read More
“Chemicals are present in 95% of manufactured goods. The chemical industry is Europe’s hungriest industrial energy consumer and the 3rd biggest emitter of CO2 emissions. It now stands on the verge of one of the greatest tipping points and challenges in its history: the transition to carbon neutrality.”
The paradigm shifts are already starting to impact most businesses. China is also changing, and will no longer power global growth. So there are no ‘Business as Usual’ options for the future. Instead, companies have to develop new business models for today’s New Normal world.
Companies must be bold and transform, as paradigm shifts reshape the business world Read More
Economists might like to believe that inflation is somehow a monetary phenomenon. But as we are all likely to learn to our cost over the winter, food and energy prices are critical for most people. Oil prices are already rising. And food prices are joining them.
Food prices set for further rise as energy and fertilizer costs increase Read More
Most Americans can’t qualify for a mortgage today with prices and interest rates at generation-highs. Yet housing starts average a post-2007 record of 1.5m/month. Logic therefore suggests the US housing market is heading for a repeat of the 2008 crisis
US interest rate rises start to threaten the housing market bubble Read More
The losses sitting on central bank balance sheets are starting to soar to eye-watering levels. The US Federal Reserve is sitting on a “mark-to-market” loss of $911bn. The UK taxpayer has already handed over £150bn ($192bn) to cover the Bank of England’s losses.
Central banks leak $bns as losses from their stimulus policies start to soar Read More
The chemical industry is now starting to warn us of a new risk. Europe is already suffering from a cost of living crisis. And people simply can’t afford to pay even higher prices for energy. At a certain point, therefore, demand may simply collapse, and usher in deflation
Europe’s chemicals market highlights move into recession, and risk of future deflation Read More
Taylor Swift’s concerts are creating massive short-term demand as people reconnect after lockdowns. But the chemical industry is warning that deflation could be round the corner, due to the over-capacity created by 20 years of stimulus
Chemicals confirm deflationary pressures are building around the world Read More
The chemical industry is the best leading indicator for the global economy. What is it telling us about the outlook for the rest of 2023, and 2024?
Either chemical markets are wrong or the financial markets are wrong, and obviously we think it’s the latter. People thought China was going to bounce back rapidly after Covid but China’s growth since 2008 was the product of massive stimulus and property speculation which couldn’t go on forever.
Chemicals, financial markets reach a fork in the road Read More
The Ukraine war highlights how the real world can often be a very messy place. Issues such as geopolitics and demographics aren’t easy to understand. It can be hard to understand the detail of how key industries and markets are operating.
So it’s no surprise that most policymakers have preferred to stay in the world of theory.
Essentially, China’s move to self-sufficiency, and the need to deal with the issue of plastic waste, means there is no ‘business as usual’ option. Winners and Losers are already starting to emerge, as companies react to the challenges of today’s New Normal world.
Chemicals are telling us that all the world’s major economies are in a major downturn. And the downturn is starting to accelerate as companies cut back spending and fire people. Real estate, autos and other key areas are already suffering along with the banking system.
Chemical industry results confirm major recession is underway Read More
The problem is that most economic models were originally built in the 1960s/70s, when people still died around pension age, and are out-of-date
Stimulus programmes have created a major debt crisis, as the money cannot be repaid Read More
Everyone will now lose out as China’s real estate bubble continues to burst. The speculators who bought apartments they couldn’t afford will go bust. The new capacity built to supply the bubble will have to close down. And the millions of people who invested in China’s “growth miracle” will lose their shirts.
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.
‘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.
Please join me for my free ACS webinar on Thursday, December 15, 2022 @ 2-3pm ET.
Break glass in case of emergency – the 2023 outlook for the economy Read More
The World Cup runs till December 18. That’s a long time for Chinese viewers to ask themselves “Why am I still locked down, when the rest of the world is living a normal life again”? And in the background, the real estate bubble continues to burst.
Underlying growth has been slowing since 2000 as more people joined the Perennials generation. Now, the bursting of the central bank stimulus bubbles – combined with the impact of Russia’s invasion – will likely cause the global economy to go ex-growth.
Global economy set to go ex-growth as world population hits 8bn Read More
The chemicals industry is a bellwether for the global economy and its message couldn’t be any clearer:
A severe global recession is imminent.
Russia’s invasion is a major wake-up call about the danger of assuming business will always be “as usual”. The window for investing in future growth is starting to close. As Hemingway warned in “Fiesta”, major changes (such as Net Zero) occur “gradually, then suddenly”.
Truss will be the first UK premier since Churchill to operate without the Queen in support. And as Robert Shrimsley had already noted in the Financial Times: “Few would envy Truss this moment. She is going to have to be one of the great premiers just to be a merely good one.”
Queen Elizabeth’s death marks the end of an era for the UK Read More
It’s going to be a very difficult winter. Most of the world will be impacted as Europe bids up energy/food prices to keep its people warm and fed. And it would never have happened if policymakers had recognised the importance of geopolitics, energy markets and demographics.
As the head of Germany’s Employers’ Associations warned last month: “We are facing the biggest crisis the post-war Federal Republic has ever had. We have to be honest and say: First of all, we will lose the prosperity that we have had for years”.
Millions of people around the world are already having to cutback on buying food for their families due to today’s high prices. By wintertime, the risk is that they will have to choose between buying food or heating their homes.
IMF warns the risks “for the economy are overwhelmingly tilted to the downside” Read More
The US is moving into recession as the Atlanta Fed chart confirms. Chemicals have been warning of this for some time. But policymakers and commentators remain in Denial about the economy. They prefer to focus on their computer models, and ignore the real world outside their window.
But now, the bubble is starting to deflate, as the zero-Covid policy cripples the economy. GDP grew just 0.4% in Q2. Beijing is issuing record amount of debt, but confidence has gone. Prices for unsold apartments are being discounted. And developers’ cashflow is being hit by mortgage strikes for unfinished apartments.
We are facing a perfect storm of global food, energy and financial crises set off by the war in Ukraine. Analysts need to stop focusing on monetary policy and the inversion of the yield curve. They need to look out of the window and start dealing with the geopolitical reality of Putinflation.
Please join me for the next ACS Chemicals & Economy webinar on Wednesday, at 2pm Eastern Standard Time, USA,
The market downturn couldn’t have come at a worse time for Apple. It was already facing major supply chain chaos in Q2. And now it has to face a major decline in the smartphone market itself. Inevitably this will lead to a brutal battle for market share as companies struggle to survive.
Smartphone sales set to tumble as China’s lockdowns continue Read More
Central banks and investors believed stimulus programs had created a “New Paradigm” where asset prices would always increase. Now they are starting to realise that stimulus is irrelevant against the 3 Horsemen of the Apocalypse – China’s continuing battle with the pandemic, Russia’s invasion of Ukraine, and potential famine as rising gas/fertilizer prices mean farmers can’t afford to grow their crops or feed their animals.
The chemicals industry continues to be the best leading indicator for the global economy Read More
Energy and financial markets are exacerbating the risks ahead. Oil prices at current levels – as the chart confirms, they now account for more than 3% of global GDP – have historically led to recession as the chart shows. The reason is that consumers have to cut back on their discretionary spending, which drives economic growth, in order to heat their homes and travel to work and school. Today’s high levels of natural gas prices add to this risk.
We are facing a K-shaped recession. Companies and investors have a difficult time ahead. They not only have to navigate a potentially major downturn. But they also have to completely reposition their portfolios for the New Normal world that will follow.
Prepare for a K-shaped recession with Winners & Losers Read More
These are difficult times, and there is no guarantee that they may not get worse. But they also remind us of the critical need to move beyond the Age of Oil, and develop more sustainable energy resources for the future.
The issue is simply that investors are in a state of Denial. And so there is a growing risk of a financial crisis as reality finally dawns on them.
Putin’s war in Ukraine set to impact the real economy and financial markets Read More
Recession may also burst today’s asset price bubbles in stock markets and housing prices – and even in more obscure assets such as art markets.
‘Watch out below!’ as supply chain chaos comes to an end Read More
The transformation period is a wonderful opportunity to reset the clock and start a new race.
Industry now needs to step up, if Net Zero is to be achieved Read More
The Federal Reserve can’t control the fallout from the bursting of China’s ‘subprime on steroids’ real estate bubble
The Fed’s stock market bubble is at risk as China bursts its real estate bubble Read More
Companies moved away from simply providing products – valuable though these were – to instead provide solutions to the pressing problems created by the need to move to Net Zero
Central banks thought they could overcome demographic pressures from ageing populations by printing bucket-loads of money at zero interest rates to support housing and stock markets. Now they are finally realising this was wishful thinking.
Housing markets face long-term downturn as central banks abandon stimulus Read More
Autos are going through a genuine transformation, just as a caterpillar transforms via the chrysalis stage into a butterfly
Businesses set for transformation as supply chain chaos combines with Net Zero targets Read More
The argument over the N Ireland Protocol creates the risk of a trade war developing between the UK and EU
Businesses face difficult 2 months for Great Britain – N Ireland trade Read More
Flooding in China and Europe, record temperatures in the USA, wild fires – all these are signs that climate change is accelerating. After all, the world has gone from 2.5bn people in 1950 to 7.9bn today. That must have an
Auto industry provides a model for the transition to Net Zero Read More
The floods raging in Germany and Benelux highlight the scale of the Climate Change challenge ahead. Last week, Europe announced its roadmap towards a Net Zero economy. It emphasised that achieving Net Zero, even by 2050, will be impossible if we don’t start now. As the Commission noted in presenting the strategy: “Climate change is
The post Europe’s Green Deal will transform its economy, as floods confirm urgency of tackling climate change appeared first on Chemicals and the Economy.
Governments have failed to properly protect their populations from the pandemic. Some have actively encouraged it, the rest have simply been incompetent. Today, their failure to vaccinate the world means poorer countries are now acting as a petri-dish – enabling
The blog has now been running for 14 years since the first post was written from Thailand at the end of June 2007. And quite a lot has happened since then: There was the 2008 financial crisis, one of the
The blog’s 14th birthday – and the New Normal world it predicted has arrived Read More
Please join me for the next ACS Chemicals & Economy webinar on Thursday, at 2pm Eastern Standard Time, USA, when we will discuss: How businesses can be more successful by taking a more holistic view of the environment in which they operate How companies are refocusing due to the shifts in consumer demand and the
The post ACS Chemistry & the Economy webinar on Thursday appeared first on Chemicals and the Economy.
OPEC under pressure, China worries about off-balance sheet debt Read More
US inflation “surprise” puts Federal Reserve under pressure Read More
The pandemic has reminded us of the critical role played by vaccination in our lives. Its impact began 225 years ago today with Dr Edward Jenner’s discovery of smallpox vaccination. It literally changed the world. And today, we have a new opportunity to reshape our world. Please click here to download a more detailed PDF
The post 225 years ago today. The first ever vaccination – against smallpox, the great killer of the time appeared first on Chemicals and the Economy.
US jobs report punctures dream of quick return to “normal” Read More
Major new opportunities are starting to appear in today’s New Normal world, as I describe in a new analysis for the Institution of Chemical Engineers. Please click here to read the full article. We are set to enter a “New Normal” world as economies slowly reopen again with the arrival of Covid-19 vaccines. This will
The post Supply chains set to transform as companies start to reshore appeared first on Chemicals and the Economy.
Supply chains set to transform as companies start to reshore Read More
Biden calls time on Reagan’s “trickle-down economics” Read More
Prepare to say goodbye to the great central bank-led rally Read More
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.
Pandemic leads to ‘baby bust’ as births decline in most countries Read More
A last hurrah for Dr Pangloss as investors ignore growing market risks Read More
The pandemic has reminded us of the critical role played by vaccination in our lives. But few realise the enormous impact made just 200 years ago by Dr Jenner’s discovery of smallpox vaccination. It literally changed the world. And today, we have a new opportunity to reshape our world. Please click here to download a PDF
The post Smallpox was the first vaccination to change the world – now we have a new opportunity to improve our lives appeared first on Chemicals and the Economy.
One of the good things to happen in the pandemic over the past year is that ‘cooking has become the new commute’ for many people. Working from home means they have often saved an hour or more a day in commuting time. And instead of sitting in a crowded bus or train, or being stuck
The post COP 26 set to accelerate development of the 15-minute city appeared first on Chemicals and the Economy.
COP 26 set to accelerate development of the 15-minute city Read More
Oil markets, NASDAQ, highlight underlying weakness in financial markets Read More
The rising dollar means all bets are off for Emerging Markets Read More
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.
China’s dual circulation policy aims to reduce debt reliance Read More
Interest rates jump as Fed focuses on need for higher inflation Read More
“Investing illusions can continue for a surprisingly long time”, Warren Buffett Read More
Investor mania is a classic sign of a late-stage bubble Read More
The Brexit debate has always been about politics, not economics. So it was no surprise that December’s UK-EU Trade & Cooperation Agreement (TCA) was the first trade deal in history to actually increase barriers rather than reduce them. The reason is that Brexiters are focused on a very narrow concept of “sovereignty”. And last week’s
The post UK set to take hard line on EU trade under David Frost appeared first on Chemicals and the Economy.
UK set to take hard line on EU trade under David Frost Read More
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Rising uncertainty hits market sentiment and prices Read More
“The challenges posed by plastics are to a large extent due to the fact that our production and consumption systems are not sustainable. “The COVID-19 pandemic and climate change have amplified public attention for the plastic waste crisis we face. “It is clear that the best way is to shift to a fundamentally sustainable and
The post EU focuses on a sustainable and circular plastics system appeared first on Chemicals and the Economy.
EU focuses on a sustainable and circular plastics system Read More
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Biden’s plain-speaking will return markets to reality Read More
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2021 unlikely to see a quick return to ‘business as usual’ Read More
Most companies had closed when the new EU-UK Trade and Cooperation Agreement (TCA) was finally announced on Christmas Eve. And they are only now starting to get their heads around what it all means. Essentially, it creates the biggest shake-up to the UK’s trading relationships since 1973. As the BBC’s Economics Editor reported: “It is
Businesses face “biggest imposition of red tape in 50 years” as Brexit begins Read More
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OPEC and the Federal Reserve hold off reality for a (little) longer Read More
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“Everything is for the best, in this best of all possible worlds” Read More
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Yellen’s nomination for Treasury Secretary takes markets into peak “greed trade” mode Read More
(Picture credit Shutterstock) A. Article 50 of the Lisbon Treaty set out the rules for leaving the European Union. As with most negotiations, it assumed the leaving country would present its proposals for the post-withdrawal period – which would then be finalised with the other members. But the UK government has little experience of trade negotiations, as these
Your A to Z Guide to the reality of Brexit after 31 December Read More
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Please join me for the next ACS Chemicals & Economy webinar on Thursday, at 2pm Eastern Standard Time, USA, when we will discuss: How US trade and other key policies will likely change when President-elect Biden takes office? What is happening with international debt, and how will this impact financial markets? What is the new
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What would 4 years of President Biden mean for financial markets? Read More
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What would another 4 years of President Trump’s policies mean? Read More
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Central banks try to ‘print babies’ to boost consumption Read More
Volatility has begun to rise in oil and bond markets, as we expected. China’s upcoming ‘Vision 2035’ seems likely to prove a major game-changer for its economic model over time.
Companies have entered a new landscape where the coronavirus has accelerated major paradigm shifts, as I discuss in my latest analysis for ICIS Chemical Business. 2020 is proving to be one of those years when time seems to speed up. The pandemic has been the catalyst for a range of paradigm shifts, which are
I spent from September 2015 onwards, during the last US Presidential election, trying to explain why Donald Trump was likely to win. As I noted after the event in November 2016: “It really wasn’t very difficult to see that Donald Trump could win the White House, and that the Republicans could control Congress, for the
What will happen if President Trump loses the election? Read More
Governments spent most of February/March ignoring my warnings here on the dangers posed by the Covid pandemic. Now many are moving in the opposite direction. Unintentionally, they are helping to create fear and panic, which could well lead to another Great Depression and major social unrest. HOW DID WE GET HERE? I began warning of
Covid fears risk a Great Depression and major social unrest Read More
Last Wednesday, I gave the opening presentation for the ICIS PET Conference and looked at whether the global economy is seeing a Rebound or a full Recovery after the lockdowns? It covered a wide range of topics: Chemicals’ Capacity Utilisation is the best leading indicator for the global economy, and it continues to weaken Central
I warned before the June 2016 Brexit referendum that Brexit was all about politics, and Boris Johnson’s bid to become prime minister: “All the evidence suggests that his real motive for deciding to lead the Leave campaign was that – win or lose – this would make him the likely successor to David Cameron as
Reality dawns for business as No Deal Brexit approaches Read More
The chemical industry is the best leading indicator for the global economy. On Friday, I had the privilege of discussing a wide range of key issues with Ajaya Sharma in a lunchtime interview for India’s main business station, ET Now. Our interview focused on a number of critical areas and why the future is going
Global chemical industry – key trends for success in today’s New Normal Read More
Oil prices have moved into another ‘flag shape’ – which previously provided critical warning of the March collapse, and of those in 2014 and 2008. The shape is important as it means the bulls and bears have been battling each other to exhaustion, making it likely one or the other will give up. This time,
Oil prices signal potential end to the V-shaped recovery myth Read More
Governments, financial markets and central banks all originally assumed the Covid-19 pandemic would be over in a few days or weeks. But it is now clear they were wrong. And unfortunately, there is little sign of a Plan B emerging. The idea was that consumers would have plenty of money in their pockets after the
Bankruptcies now the key risk as hopes for V-shaped recovery disappear Read More
Most people missed the fact that last Tuesday was the last possible date to delay the UK’s exit from the EU at the end of the year. Yet as Germany’s leader, Angela Merkel warned on Wednesday: “To put it mildly, progress in the negotiations has been very limited. I will continue to press for a good
Merkel warns of need to prepare for No Deal Brexit Read More
I have been warning about the Covid-19 risk since early February, and in April suggested here that: “None of us have ever seen a health crisis on the scale of Covid-19 . Nor have we seen an economic crisis on this scale before. The best guide to what may happen is therefore likely to be
World moves from Denial to Anger, as the Paradigm of Loss moves forward Read More
The global chemical industry is the third largest sector in the world behind agriculture and energy, and its outputs find their way into everything we consume. Paul Hodges, chairman of the pH Report, analyzes the chemical industry to give a unique perspective on the global economy to investors and corporations. In this timely discussion, he
London property websites haven’t used the word “reduced” for many years. But it’s starting to appear again on homes for sale and rent, even in core city postcodes. And in another sign of the downturn, homes can now be on offer for months without moving. The problem is that prices were already ready to tumble
Debt, deflation, demographics and Brexit set to challenge London house prices Read More
The Financial Times kindly made my letter on the risks now associated with central bank stimulus their Lead Letter One has to agree with your editorial that deflation is now probably inevitable (“Deflation is a bigger fear than hyperinflation”, FT View, April 28). But it is still disappointing to see that the role of central
The bill for two decades of doomed stimulus measures is due Read More
Something quite dramatic is happening in the global economy. Of course, Wall Street analysts still maintain that the impact of the Covid-19 pandemic will be over by the summer. What else can they say, given their income mostly depends on persuading the public to buy shares? But anyone on Main Street knows that it will
Local supply chains replace global trade as world starts to “do more with less” Read More
Many companies and investors are still comparing today’s downturn to the 9-month hiccups seen after the 1990/91 Gulf War and the 2000/1 dotcom crash. In reality, however, this is wishful thinking, as the IMF highlighted last week in its World Economic Outlook: “The Great Lockdown: Worst Economic Downturn Since the Great Depression” One key question,
The head of the IMF has warned again on the likely scale of the economic depression ahead: “Global growth will turn sharply negative in 2020. In fact, we anticipate the worst economic fallout since the Great Depression.” None of us have ever seen a health crisis on the scale of Covid-19 . Nor have we
World risks moving from Denial into Anger as the Paradigm of Loss moves forward Read More
It is now 3 months since China’s state television broadcast the first news of the Wuhan virus, now known as Covid-19. And it is almost 3 months since China released the first genetic sequence for the virus on 9 January. But with certain notable exceptions, governments since then have mostly failed to properly activate their
Contingency planning has become mission-critical. The longer the coronavirus pandemic continues, the more it will expose the underlying fragility of today’s debt-laden global economy. Companies therefore have to move into crisis management mode, with a number of key areas requiring immediate attention: • Employee health and safety is the top priority. Governments are slowly waking
China is the world’s largest market for smartphones and autos – responsible for c30% of global sales for both. Yet as Reuters notes: “Most western policymakers and journalists view the world economy through a framework that is 10-15 years out of date, failing to account fully for the enormous shift in activity towards China and
Chain’s smartphone and auto sales tumble as coronavirus hits demand Read More
Beijing has a population of 21.5 million, but you wouldn’t know it from this BBC video from last Thursday. Normally busy streets and transport systems are eerily empty, with food deliveries often the main traffic on the roads. It’s the same picture in industry, with the Baidu Migration Index reporting only 26% of migrant workers
China’s lockdown makes global debt crisis now almost certain Read More
China’s industrial heartland of Hubei (pop 59m) and its capital Wuhan (pop 11m) have now been locked down for nearly a month as a result of the coronavirus COVID-2019 epidemic. In total, more than half of the population (760m) are
Financial markets head for (another) train crash as coronavirus starts to impact Read More
Last month, our Hong Kong-based pH Report colleague, Daniël de Blocq van Scheltinga, warned of the “Possible development (epidemic?) of the Wuhan SARS like illness, and economic impact?” His current view of developments, and their likely impact, is as follows: Hubei,
Coronavirus disruptions make global recession almost certain Read More
A. Article 50 of the Lisbon Treaty set out the rules for leaving the European Union. As with most negotiations, it assumed the leaving country would present its proposals for the post-withdrawal period – which would then be finalised with the other members. The UK government, however, has still not yet set out its post-Brexit
Your A to Z Guide to the Brexit trade negotiations Read More
The IMF has now confirmed that the world economy has moved into the synchronised slowdown that I forecast here a year ago. Its analysis also confirms the importance of the issues highlighted then, including “rising trade barriers and increasing geopolitical tensions”, a sharp decline in manufacturing, contraction in the auto industry and structural forces such
Contingency planning is essential in 2020 as “synchronised slowdown” continues Read More
Finally, after three and a half years, the UK has reached “the end of the beginning” with Brexit, in Winston Churchill’s famous phrase. Since the referendum, its leaders have consistently refused to confront the real choices that have to be made over what type of Brexit it wants to have: In June 2016, then premier
Boris Johnson will have to disappoint someone in 2020 as the UK finally leaves the EU Read More
Please join me for the next ACS Chemicals & Economy webinar on Thursday, at 2pm Eastern Standard Time, USA, when we will discuss: The contrast between the downbeat outlook for the chemical market and the upbeat stock market The challenges facing US shale gas polyethylene exports due to the US-China trade war and concerns over
The UK is about to go to the polls again to try and decide the Brexit issue. Chemicals will be one of the industries most affected by the decision, as it depends on cross-border supply chains. As the UK Chemical Industries Association has warned: “The chemical industry in the UK and in Europe needs a
Whisper it not to your friends in financial markets, but the global economy is moving into recession. The US stock markets keep making new highs, thanks to the support from the major western central banks. But in the real world, where the rest of us live, the best leading indicator for the global economy is
Global economy hits stall speed, whilst US S&P 500 sets new records Read More
It is now 8 years since John Richardson and I published our 10-year forecast for 2021 in Boom, Gloom and the New Normal: How the Western BabyBoomers are Changing Demand Patterns, Again’. Remarkably, its core conclusions are very relevant today, as the summary confirms. Unfortunately, as we feared, policymakers refused to junk their out-of-date models,
MY ANNUAL BUDGET OUTLOOK WILL BE PUBLISHED NEXT WEEK Next week, I will publish my annual Budget Outlook, covering the 2020-2022 period. The aim, as always, will be to challenge conventional wisdom when this seems to be heading in the wrong direction. Before publishing the new Outlook each year, I always like to review my
Major paradigm shifts are occurring in the global economy, as I describe in a new analysis for ICIS Chemical Business Over the past 25 years, the budget process has tended to assume that the external environment will be relatively stable. 2008 was a shock at the time, of course, but many have now forgotten the
Markets face major paradigm shifts as recession approaches Read More
Canada’s normally pro-UK ‘Globe and Mail’ summed up the prevailing external view of Brexit last week: “We begin this editorial with an apology to you, our faithful readers. In March, we described the Brexit situation, then careening through its third year and nowhere close to resolution, as an “omnishambles. “An omnishambles is a state of
New UK premier, Boris Johnson, said last week that the UK must leave the EU by 31 October, “do or die, come what may”. This means UK, EU27 and EEA companies now have less than 100 days to prepare for a UK No Deal Brexit. That’s less than 70 working days – and even less
UK, EU27 and EEA businesses need to start planning for a No Deal Brexit on 31 October Read More
After the excitement of Wimbledon tennis and a cricket World Cup final, Londoners were back to their favourite conversation topic last week – house prices. But now the news has become bittersweet as the price decline starts to accelerate. As the London Evening Standard headline confirms: “The London property slump has dramatically accelerated with prices
If a country doesn’t have any babies, then in time it won’t have an economy. But that’s not how the central banks see it. For the past 20 years, through subprime and now their stimulus policies, they have believed they could effectively “print babies”. Even today, they are still lining up to take global interest
G7 births hit new record low, below Depression level in 1933 Read More
The blog has now been running for 12 years since the first post was written from Thailand at the end of June 2007. And quite a lot has happened since then: There was the 2008 financial crisis, one of the blog’s early forecasting successes This led to the publication of ‘Boom, Gloom and the New
Resilience is set to become the key issue as we look forward to H2, as I note in a new analysis for ICIS Chemical Business. None of us have ever seen the combinations of events that are potentially ahead of us. And none of us can be sure which way they will develop. So it
Never let reality get in the way of a good theory. That’s been the policy of western central banks since the end of the BabyBoomer-led SuperCycle in 2000, when the oldest Boomer moved out of the Wealth Creator 25-54 age group and into the Perennial 55+ cohort. Inevitably this led to a slowdown in growth,
Trade wars, Dieselgate and recession risk are having a major impact on the European auto industry, as I describe in my new video interview with ICIS Chemical Business deputy editor, Will Beacham. One key pressure point is created by the downturn in China’s auto industry. As the chart shows, it has been a fabulous growth
Europe’s auto sector suffers as Dieselgate and China’s downturn hit sales Read More
There will be no shortage of important topics to discuss on Thursday, at my regular Chemistry and the Economy: 2019 Mid-Year Update webinar for the American Chemical Society. Please join me on Thursday @ 2pm – 3pm Eastern US Time for the webinar, which will be moderated as usual by Bill Carroll, former ACS Chair. Free
2019 Global Outlook – a mid-year update: ACS webinar on Thursday Read More
There are few real surprises in life, and President Trump’s decision to launch a full-scale trade war with China wasn’t one of them. He had virtually promised to do this in his election campaign, as I noted here back in September 2015: “The economic success of the BabyBoomer-led SuperCycle meant that politics as such took a back
Uber’s IPO next month is set to effectively “ring the bell” at the top of the post-2008 equity bull market on Wall Street. True, it is now expecting to be valued at a “bargain” $91bn, rather than the $120bn originally forecast. But as the Financial Times has noted: “Founded in 2009, it has never made
Uber’s $91bn IPO marks the top for today’s debt-fuelled stock markets Read More
In my interview for Real Vision earlier this month, (where the world’s most successful investors share their thoughts on the markets and the biggest investment themes), I look at what data from the global chemical industry is telling us about the outlook for the global economy and suggest it could be set for a downturn. “We look at
Thank goodness for backbench MPs and the European Union. Without their efforts, the UK would by now have left the EU without any trade deals, or ongoing relationship with it’s biggest export market. And as the Duke of Wellington said in another context, “It was a damn close-run thing”: In a historic vote, MPs decided
Residential construction work in Qingdao, China. Government stimulus is unlikely to deliver the economic boost of previous years © Bloomberg China’s falling producer price index suggests it could soon be exporting deflation, as I describe in my latest post for the Financial Times, published on the BeyondBrics blog On the surface, this year’s jump in China’s total
With the European Commission saying that a No Deal is now “likely“, small businesses across the UK and EU27 have begun to look forward to the opportunities that it will create, as this 1 April report from Ready for Brexit suggests. Businesses across Europe are thrilled by the uncertainty of Brexit. “We’re absolutely loving it”
Businesses thrilled by Brexit uncertainty: “It’s exhilarating” says small business owner Read More
The world’s best leading indicator for the global economy is still firmly signalling recession. That’s the key conclusion from the chart above, showing latest data on global chemical industry Capacity Utilisation (CU%) from the American Chemistry Council. The logic behind the indicator is compelling: Chemicals are one of the world’s largest industries, and also one
Ageing Perennials set to negate central bank stimulus as recession approaches Read More
BASF has been working with Ready for Brexit (the online platform I co-founded last year) as part of its programme to prepare its UK supply chain for Brexit. Here, Ready for Brexit’s editor, Anna Tobin, reports on the workshops that BASF has been running this month for SMEs. The world’s largest chemical business, BASF, has
Companies across the UK and EU27 are realising there are now just 30 working days until the UK leaves the EU on 29 March, and starts to trade on WTO terms. If this happens, every supply chain involving a movement between the UK and EU27 will change. And many supply chains involving movements outside the
Companies and investors have just 30 working days left to prepare for a No Deal Brexit Read More
The Financial Times has kindly printed my letter below, arguing that it seems the default answer to almost any economic question has now become “more stimulus” from the central bank. After 15 years of subprime lending and then quantitative easing, last week’s warning from the Bank of England suggests there are fewer and fewer economic