housing

Supply chains set to transform as companies start to reshore

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

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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

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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

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Rising US interest rates, US$ and oil prices set to pressure financial markets

Everyone who has ever played the Beer Distribution Game on a training course knows what is happening in supply chains today. A small increase in underlying demand is rapidly leading to a massive increase in ‘apparent demand’. As the New York Times reports, “the pandemic has disrupted every stage of the (supply chain) journey.”  And

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The New Normal for global industry

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

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The End of “Business as Usual”

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

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London house prices slip as supply/demand balances change

London house prices are “falling at the fastest rate in almost a decade” according to major property lender, Nationwide.  And almost 40% of new-build sales were to bulk buyers at discounts of up to 30%, according of researchers, Molior.  As the CEO of builders Crest Nicholson told the Financial Times:  “We did this sale because we […]

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Hurricane Harvey: lack of insurance will hit Houston’s recovery

“By Monday, the third straight day of flooding, the aftermath of Hurricane Harvey had left much of the region underwater, and the city of Houston looked like a sea dotted by small islands.  ’This event is unprecedented,’ the National Weather Service tweeted. ‘All impacts are unknown and beyond anything experienced.’” This summary from the New […]

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US housing markets weaken as home ownership levels fade

Data over the past month continues to confirm my fears that the US housing recovery is going into reverse.  The argument was summed up yesterday by S&P’s chairman, when reporting Case/Shiller housing price data for December: “The housing recovery is faltering. While prices and sales of existing homes are close to normal, construction and new home […]

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US home ownership back at 1995 level as decline continues

  Conventional wisdom seemed to think the US housing report was positive this week.  But analysis of the data makes it hard to see why. One confusion comes from media use of the ‘seasonally adjusted’ number.  But why do we need an adjustment, when we have data going back to 1959?  It simply creates more potential for error.  […]

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US housing fraud rises as first-time buyers priced out of market

Signs of stress seem to be appearing in the US housing market once more.  Thus the Wall Street Journal reports: “An estimated one in seven appraisals conducted from 2011 through early 2014 inflated home values by 20% or more..Bankers, appraisers and federal officials in interviews said inflated appraisals are becoming more widespread as the recovery […]

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China becomes major PVC, PTA exporter for first time in history

Be very careful what you wish for.  That is the key message coming out of close analysis of China’s latest trade data. Recent media reports were upbeat at news that China’s exports had increased, as it appeared to suggest Western demand was returning.  But it seems nothing could be further from the truth. One major concern is that part […]

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Qingdao probe the ‘straw on the camel’s back’ for world markets

The blog’s new Research Note in the ‘Your Compass on China’ series highlights the way that China’s commodity imports have been used to finance its housing bubble.  This is clearly a shock for investors, who have till now believed the imports were a sign of its superior economic policies and long-term growth prospects. The Qingdao probe could […]

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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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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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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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“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 […]

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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 […]

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U is for Uncertainty

The blog’s series on the emerging ‘VUCA world’ today looks at how companies have to manage increased levels of Uncertainty. This can be seen in key areas of demand, such as housing.

The above chart shows how US housing starts (blue line) have fallen …

U is for Uncertainty Read More