The chemicals industry is a bellwether for the global economy and its message couldn’t be any clearer:
A severe global recession is imminent.
The chemicals industry is a bellwether for the global economy and its message couldn’t be any clearer:
A severe global recession is imminent.
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.
There are positives in all this, as the Green agenda will create new opportunities to replace those that are now disappearing. But for the moment, at least, the risks associated with a likely lengthy and deep recession are likely to dominate. Please be careful out there.
Europe’s plastic industry is at a critical turning point. Profitability is falling as the recession bites. But it cannot just cut back and hunker down. Instead, it has to take a lead in building major new recycling capacity as today’s markets and feedstocks start to disappear.
“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 […]
China’s economy has been ‘subprime on steroids’ since the financial crisis in 2008. And essentially, this has morphed into a giant Ponzi scheme, where some property developers used deposits paid by new buyers to finance the construction of apartments they’d already sold. Now the world’s most indebted property developer, Evergrande, has warned it may default […]
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 […]
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 […]
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 […]
Next week, I will publish my annual Budget Outlook, covering the 2021-2023 period. It will highlight how the pandemic is accelerating major paradigm shifts in society, politics and the global economy. I have been publishing these Outlooks since 2007, and they disprove the idea that forecasting is a waste of time. They highlight instead that […]