Helping you navigate the new normal since 2001
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
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 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.
Europeans are the only ones still operating on the basis of a rules-based international order. As France’s President Macron warned last week, we have to be much more realistic. We need “to protect our chemical industry, our industries – because they are being literally killed.”
INEOS bond price slide confirms chemicals are in Crisis Read More
A second Asian Financial Crisis would be a much bigger issue than in 1997. It would quickly impact 3 of the world’s Top 5 economies. And it would quickly panic investors in N America and Europe. Unfortunately, there are still no signs that policymakers realise the risks they are running.
An Asian Financial Crisis 2.0? More warning signs appear Read More
Today’s key issue is that we are seeing the end of the ‘middle market’. We are now returning to a world where companies compete on Value or Luxury. The highly profitable middle market of ‘affordable luxury’ is disappearing.
iPhone captures Luxury market whilst Samsung’s Galaxy competes with low-cost Value players Read More
The smartphone market highlights how consumers are refocusing on ‘value for money’. Sales are falling as people hold onto their phones for longer. And more people are now happy to buy a cheaper used model.
Smartphone sales confirm that ‘value for money’ is starting to drive consumer demand Read More
Smartphones highlight major shifts underway in consumer markets. The cost of living crisis means people are only buying what they “need”, and cutting back on what they only “want”. And today’s ageing populations mean there are fewer young people to make their “first purchase”.
Apple loses its Top 5 position in China as price competition intensifies Read More
This is the 3rd time we have forewarned of an approaching crisis. Both previous times, ahead of the Great Financial Crisis and the Covid pandemic, we were told we “didn’t know what we were talking about”. And nobody did anything to avoid the looming disaster Let’s hope its “3rd time lucky” and that “this time is different”.
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 $2011. India has only 2m.
Middle Income countries face a real risk of “growing old before they become rich” Read More
We don’t often use the word “impossible” in the newsletter. But in this case, it is clearly impossible for GDP to continue to grow in the major Western economies.
Demographics are destiny for the global economy, as central banks start to realise Read More
Last week, the Japanese yen fell through the US$ : ¥150 level for the first time since 1990. It has now fallen by nearly 50% against the US$ in the past two years. The currency is behaving as if Japan were a 3rd world country – whereas it is actually the 3rd largest economy in the world. Clearly, something is very wrong.
Asia’s debt crisis starts to approach its endgame as the yen continues to tumble Read More
Bubbles are great fun while they last. But they are much less fun when they burst. For the past 20 years, central bank stimulus has created some of the largest bubbles ever seen. But now, led by developments in Japan and China, they are bursting
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
Food prices have stayed high due to the disruption caused by the war. They are unlikely to fall back quickly as the war continues and economic volatility intensifies.
Food prices set to remain volatile as the war continues and fertilizer costs remain high Read More
The Presidential Cycle is now over. Instead, worries about the recession and the US debt ceiling talks are moving centre-stage. But Asian currency markets are sending a warning signal. A rising US dollar and US interest rates, and a falling yen and yuan, could soon raise the risks of a major Asian debt crisis.
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
It seems highly likely that the Rebound rally is ending, and the market Downtrend is about to resume. Time spent on researching the paradigm shifts that will take us into the New Normal will likely prove very profitable for the future
Stock markets on the brink as the end of ‘Presidential Cycle’ support looms Read More
“You can’t run the most reckless monetary and fiscal experiment in history without the bill eventually coming due. The first invoice arrived as inflation. The second has come as a financial panic, with economic damage that may not end with Silicon Valley Bank.”
Its ‘Minsky Moment’ time again as investors start to worry about return of capital Read More
Companies and investors need to invest time now on having a genuine debate about the risks ahead. The regulatory failures of the past few days highlight what can quickly go wrong, if one hasn’t war-gamed out potential risks. As the saying goes, “Failing to plan, equals planning to fail”.
Today’s financial crisis confirms that “failing to plan, equals planning to fail” Read More
The ‘digitalization of everything’ has transformed the global economy over the past 30 years. The rise of the internet is just one example. Now electrification is set to have a similar impact, starting with the world’s largest manufacturing industry. Fasten your seatbelts for the ride!
Global auto fleet goes electric as “the electrification of everything” begins Read More
‘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.
Nobody knows how markets will develop. But past performance is the best guide that we have. This is why our Sentiment Index is my Chart of the year for 2022.
Chart of the Year – Our Sentiment Index proved a great guide to the S&P 500 in 2022 Read More
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”.
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.
The history of the 1929 and 2000 downturns suggests the real pain is yet to come. Housing markets look terribly over-valued around the world, as I noted last month. And US consumer sentiment is at all-time lows. So most company earnings seem set to fall, with more than 60% of US CEOs now expecting to see a recession.
It is time for the central banks to give up their outdated economic models, and focus instead on the science of demographics. Their efforts to create economic growth by ‘printing babies’ have simply created a debt bubble. This will likely now burst as Evergrande goes bankrupt.
The new business models, based on using locally-produced recycled plastic feedstocks, are a ‘once=-in-a-lifetime’ opportunity to create growth for decades to come.
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
Much of the way the world currently works depends on uninterrupted and elevated Chinese growth.
The end of China’s real estate bubble will impact global supply chains, exports and growth Read More
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
OPEC under pressure, China worries about off-balance sheet debt Read More
US inflation “surprise” puts Federal Reserve under pressure Read More
US jobs report punctures dream of quick return to “normal” 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 last hurrah for Dr Pangloss as investors ignore growing market risks 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