subprime on steroids

Demographics are destiny – and today’s ageing populations are creating a “replacement economy”

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.

Demographics are destiny – and today’s ageing populations are creating a “replacement economy” Read More

Asia’s debt crisis edges nearer, as Japan’s interest rates rise and China’s property bubble bursts

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

Asia’s debt crisis edges nearer, as Japan’s interest rates rise and China’s property bubble bursts Read More

“Houston, we have a problem” – China’s move to self-sufficiency a game-changer for the plastics industry

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.

“Houston, we have a problem” – China’s move to self-sufficiency a game-changer for the plastics industry Read More

China’s One Child Policy meant it “lost” 73 million brides – adding to its real estate and economic risks today

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.

China’s One Child Policy meant it “lost” 73 million brides – adding to its real estate and economic risks today Read More

“FANGs” lose their teeth as stock markets relearn their key role of price discovery

Now, we are all starting to suffer for the central banks mistake in adopting Bernanke Theory. The bubbles they created are finally starting to burst as interest rates return to more normal levels. This will be very painful for all those who trusted them to manage the economy.

“FANGs” lose their teeth as stock markets relearn their key role of price discovery Read More

China has locked down again. Yet World Cup TV shows that normal life has resumed outside China. And the real estate bubble (29% of GDP) continues to burst

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.

China has locked down again. Yet World Cup TV shows that normal life has resumed outside China. And the real estate bubble (29% of GDP) continues to burst Read More

FT Letters - Jackson Hole comment by Paul Hodges

Jackson Hole is a chance to prepare for a financial shock

The problems began with the supply chain crisis caused by the pandemic. Russia’s war in Ukraine then created a further challenge. And now we face the risk of famine as fertiliser costs become unaffordable. Central bankers at their annual Jackson Hole get-together should therefore focus on preparing for the arrival of a potential Fourth Horseman of the Apocalypse, in the shape of a major financial crisis.

Jackson Hole is a chance to prepare for a financial shock Read More

Time to focus on the danger of corporate and household leverage as “subprime on steroids” comes to an end

The seeming genius of many private equity funds in recent years has been based on this ability to borrow at cheap rates during the ‘up’ part of the business cycle. Now we are heading into the ‘down’ cycle. And the central banks have abandoned Bernanke Theory and are back to worrying about inflation. So today’s excess leverage means many over-leveraged companies will go bust.

Time to focus on the danger of corporate and household leverage as “subprime on steroids” comes to an end Read More

The world’s real estate bubbles start to burst, as central banks pivot to focus on inflation

Problems in the housing market aren’t just confined to the US, UK, Germany and China. The average house price/income ratio is now back to the highest level since records began. And the problem for homeowners is that potential buyers are already starting to disappear as mortgage rates rise – and affordability reduces.

The world’s real estate bubbles start to burst, as central banks pivot to focus on inflation Read More