Plastics producers are now being squeezed from both ends of the value chain. Upstream, the growing demand for Electric Vehicles is starting to lead to refinery closures, reducing feedstock availability. Downstream, brand owners are stepping up the pressure for increased use of recycled plastic, as the new Global Commitment report from the Ellen Macarthur Foundation […]
Chemicals and the Economy
‘Watch out below!’ as supply chain chaos comes to an end
“What goes up, comes down” is usually a good motto when prices start to reach for the skies. As the great investor Bob Farrell noted in his 10 Rules, they usually go further than you think. But they don’t then correct by going sideways. The charts showing US lumber prices, China coal prices and the […]
Xi aims to “bring order out of chaos” by bursting China’s property bubble
China is at the start of its biggest economic shake-up since 1978, when Deng Xiaoping launched his post-Mao reform programme. President Xi Jinping’s ‘Common Prosperity’ policy aims to retain his focus on increasing living standards. But it wants to spread the wealth far more widely. The electricity rationing now underway across China highlights the need […]
Businesses set for transformation as supply chain chaos combines with Net Zero targets
‘Business as usual’ seems a most unlikely outcome as we look forward over the next 6 months. The pandemic may well bring further trials for us to endure. We also have to set budgets for the next few years, and so we will need new strategies and business models to respond to the Net Zero […]
“When all the experts and forecasts agree — something else is going to happen”, Bob Farrell
In January, “everyone knew” that inflation was about to take off, and that the US$ was going to collapse. Last week, the great Bob Farrell’s Rule No 9 proved its worth, yet again. US interest rates fell sharply and the US$ bottomed for this cycle. The two charts above tell the story – because they […]
Chart of the Year – CAPE Index signals negative S&P 500 returns to 2030
Each year, it seems there is only one candidate for Chart of the Year. And 2020 is no exception. It has to be the CAPE Index developed by Nobel Prize winner, Prof Robert Shiller. As the chart shows, it is nearly at an all-time high with Tesla’s addition to the S&P 500. Only the peak […]
Perennials set to defeat Fed’s attempt to maintain the stock market rally as deflation looms
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, […]
Chart of the Year – China’s shadow banking collapse means deflation may be round the corner
Last year it was Bitcoin, in 2016 it was the near-doubling in US 10-year interest rates, and in 2015 was the oil price fall. This year, once again, there is really only one candidate for ‘Chart of the Year’ – it has to be the collapse of China’s shadow banking bubble: It averaged around $20bn/month […]
Economy faces slowdown as oil/commodity prices slide
Oil and commodity markets long ago lost contact with the real world of supply and demand. Instead, they have been dominated by financial speculation, fuelled by the vast amounts of liquidity pumped out by the central banks. The chart above from John Kemp at Reuters gives the speculative positioning in the oil complex as published […]
The global economy and the US$ – an alternative view
Every New Year starts with optimism about the global economy. But as Stanley Fischer, then vice chair of the US Federal Reserve, noted back in August 2014: “Year after year we have had to explain from mid-year on why the global growth rate has been lower than predicted as little as two quarters back.” Will […]
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